HDB resale prices increase by 9.7% in 2024, which is twice as much as in 2023
HDB resale prices increase by 9.7% in 2024, which is twice as much as in 2023
Strong demand and supply constraints drive index gains, even though the price increase is less than the 10.4% in 2022.
24 January 2025
CONDOsingapore.com
Because of tighter supply and demand, public housing flat resale prices increased 2.6% in the fourth quarter of 2024, for a 9.7% year-over-year increase.
According to data from the Housing and Development Board (HDB), the increase, which was made public on Friday, January 24, was slightly higher than the 2.5% estimate that was first made public on January 2. It slightly decreased from the third-quarter hike of 2.7%.
The year-over-year increase in resale prices was 9.7%, which was less than the 10.4% price gain in 2022 but much higher than the 4.9% increase in 2023.
Private residential home prices, on the other hand, increased 3.9% in 2024. Wong Siew Ying, the head of research at PropNex, noted that this makes the HDB resale segment the "best performer" from the previous year.
Christine Sun, chief researcher and strategist at OrangeTee Group, stated that prices increased by 50.3% cumulatively between Q1 2020 and Q4 2024, with an average increase of 2.6% per quarter.
However, Sun claimed that the price growth that is currently occurring "pales in comparison to the more dramatic spikes" that were observed in the 1990s. Between Q4 1991 and Q4 1996, prices increased by 294.4 percent, with an average quarterly increase of 14.7%.
She went on to say that a number of cooling measures implemented in recent years to slow down sharp price increases are largely responsible for the lower cumulative price growth observed in 2020.
Squeezed supply
Eugene Lim, the key executive officer of ERA, attributed the 9.7% price increase in 2024 to strong demand and limited supply, since fewer new apartments last year met the minimum occupation period (MOP).
Sellers could demand higher prices if there were fewer of these apartments available, he said.
According to Lim, the new Build-To-Order (BTO) classification system, which divides apartments into Standard, Plus, and Prime categories with tiered buying, selling, and subsidy levels, may have encouraged more buyers to enter the resale market.
A record 1,035 million-dollar apartment transactions occurred in 2024, according to Lee Sze Teck, senior director of data analytics at Huttons Asia. The districts with the largest percentage of these apartments are Toa Payoh, Queenstown, Kallang/Whampoa, Bishan, Bukit Merah, and Bukit Timah, as well as the central area.
Although the majority were priced between S$1 million and S$1.1 million, Lee observed that more apartments sold for over S$1.1 million in the fourth quarter, which he described as "an indication of owners trying to push the value of their flats higher."
However, according to Lee, this number lessened in the fourth quarter, dropping 13.9% from the previous quarter to 285 units. It contributed 3.6% of the year's market volume.
According to Mohan Sandrasegeran, head of research and data analytics at SRI, prices decreased marginally in Q4—to 2.6% from 2.7% in Q3—due to the annual year-end holiday slowdown.
Huttons Asia's Lee added that the new home market might have displaced some of the demand for resale apartments. According to him, the biggest BTO launch took place in October 2024, drawing over 35,000 applications for 8,573 new apartments, the most since August 2022.
Others might be anticipating the next Sale of Balance Flats exercise in February, which will feature more than 5,500 units available, according to Lee. Alternatively, they might have seized the opportunity to buy a private residence by taking advantage of reduced interest rates.
This resulted in a 21.1% decrease in resale apartment transaction volumes in Q4 to 6,424 units from 8,142 units in Q1. This represented a decline of 1.9% year over year (yoy).
The total number of resale transactions for 2024 was 28,986, an increase of 8.4% over the 26,735 transactions for the previous year.
At the end of Q4, 59,043 HDB apartments were rented out, which represents a slight drop of 0.2% from Q3.
8,603 applications to rent out the apartments were approved by HDB, representing a 5.6% decrease from quarter to quarter and a 12.1% decrease from year to year. Overall, 36,673 cases were approved in 2024, which is 6.3% fewer than the year before.
Five-room apartments in Queenstown had the highest median rental price, at S$4,500, according to HDB's most recent data. Sembawang's two-room apartments had the lowest price, at S$2,270.
Continuous rise in prices
Although at a slower rate, analysts predict that resale prices will continue to rise in the upcoming year.
Because public housing is less expensive than private residential properties, homebuyers may choose to use it in light of the current geopolitical unrest and economic uncertainty, according to Nicholas Mak, chief research officer at Mogul.sg.
According to OrangeTee's Sun, the supply of newly MOP apartments will likely stay low at about 6,974 units, or just 22.5% of the 30,920 units in 2022. This is the lowest number since 2014, when 5,301 units reached their MOP.
Sandrasegeran of SRI said that the primary cause of this is the pandemic-related delays and disruptions in construction, which led to fewer apartments being delivered and, consequently, fewer newly MOP units.
To partially offset this, HDB plans to raise the BTO supply to roughly 19,600 units in 2025, according to Lee of Huttons Asia.
About 3,800 of the 19,600 units will have a waiting period of less than three years, according to HDB. Approximately 102,300 BTO apartments will be introduced between 2021 and 2025, exceeding the agency's goal of launching 100,000 units during that time frame, it continued.
In August 2024, Wong of PropNex noted that cooling measures had been put in place, including lowering the loan-to-value limit for HDB housing loans from 80% to 75%. She stated, "We observe that the rate of price growth did slow down a little in the first few quarters after their introduction, and it is likely that these measures are still working through the market."
Analysts predicted that in 2025, the market might see up to 28,000 resale transactions and a 4–8% price increase.
