The resale prices of HDB flats continued to increase in the last quarter of 2024, rising by 2.6% compared to the previous quarter. This marks the 19th consecutive quarter of price growth in the resale market, according to data published by HDB on Jan 24.
The cumulative price increase for the whole of 2024 stands at 9.7%. This is nearly double the 4.9% year-on-year price growth registered in 2023.
While the rise in resale prices last quarter moderated slightly compared to the 2.7% increase in the previous quarter, experts attribute the robust growth throughout 2024 to the limited supply of flats that reached their Minimum Occupation Period (MOP) during the year. According to Mohan Sandrasegeran, head of research & data analytics at SRI, this tight supply has created upward pressure on prices, especially for newer flats and larger flat types, which cater to the needs of growing families.
Five-room flats saw the highest resale price growth in 4Q2024, with an average increase of 2.2% compared to the previous quarter. Lee Sze Teck, senior director of data analytics at Huttons Asia, adds that four-room flats also saw a significant price increase of 2.2% in the same period.
The Central Area saw the highest price growth, rising by 25.6% compared to the previous quarter, while the Central Area registered a 12.1% increase, followed by Tampines (6.9%), Bishan (6.7%), and Bedok (6.1%). Over 90% of million-dollar HDB resale transactions occurred in mature estates, with Kallang/Whampoa recording the highest number of flats sold at $1 million or more (156 units).
Resale transactions in the HDB market decreased by 21.1% quarter-on-quarter from 8,142 units in 3Q2024 to 6,424 units in 4Q2024. According to Lee, this drop is due to seasonal factors such as the year-end holidays and festive season. He adds that the low-interest rate environment may have encouraged some buyers to move to the private residential market or the Executive Condominium (EC) market.
Additionally, some buyers might have opted to ballot for a flat in the latest Build-to-Order (BTO) sales exercise in October 2024, which saw the launch of a record 15 projects comprising 8,573 flats under the new location-based classification framework. For the first time, singles were allowed to purchase two-room flexi BTO flats in all locations.
Despite the decrease in transaction volume in 4Q2024, the overall resale volume in 2024 increased by 8.4% year-on-year from 26,735 units in 2023 to 28,986 units in 2024. This marks the highest yearly resale volume since 2021, when 31,017 flats were sold. The top five most popular HDB towns among buyers in 2024 are Sengkang, Woodlands, Punggol, Tampines, and Yishun.
Looking ahead, approximately 6,976 flats are expected to reach their MOP in 2025, a decrease of 41.6% compared to 2024. This is due to the fewer BTO flats completed in 2020 during the Covid-19 pandemic. HDB is set to launch over 25,000 new flats across three BTO exercises in 2025, with about 3,800 units designated as Shorter Waiting Time (SWT) flats offering wait times of less than 3 years. Experts forecast a price increase of 3.5% to 8% for the HDB resale market in 2025, with transaction volume ranging between 26,000 and 27,000.