Why these HDB flats are worth millions
HDB flash estimates released on Jan 2, 2025 indicate a 2.5% quarter-on-quarter increase in resale flat prices in the fourth quarter of 2024, slightly slower than the 2.7% growth in the previous quarter. This marks the 19th straight quarter of price increases in the HDB resale market.
The flash estimates also show a 9.6% increase in HDB resale prices in 2024, twice the 4.9% growth recorded in 2023. However, this is still lower than the 10.4% price increase in 2022 and the 12.7% growth in 2021, according to Christine Sun, chief researcher and strategist at OrangeTee Group.
The HDB caveat data from data.gov.sg, retrieved on Jan 2, 2025 at 8:15am, has shown a slower growth rate in prices for some types of flats, as noted by OrangeTee. For instance, the median price of four-room flats increased by 2.5% compared to the 3.4% growth in the third quarter of 2024.
Similarly, two-room flats saw a 2% increase in the fourth quarter, which is slower than the 3.9% growth in the previous quarter. On the other hand, executive flats recorded a 1.2% quarter-on-quarter price increase in the fourth quarter, as compared to 1.7% in the third quarter of 2024.
In contrast, five-room flats saw a faster growth rate of 3.2% in the fourth quarter of 2024, compared to the 1.2% growth in the third quarter.
Resale Volume Down 3.6% Year-on-Year in Fourth Quarter of 2024
The resale volume in the fourth quarter of 2024 was 6,314 units, a 3.6% decrease from the 6,547 transactions in the same period of 2023. It also saw a 22.5% quarter-on-quarter decrease from the 8,142 transactions in the third quarter of 2024.
Sun attributes the decline in HDB resale transactions to the October Build-to-Order (BTO) exercise, which saw the launch of over 8,500 new flats, many of which were located in prime and desirable locations. “The attractive features of these flats, including scenic views and proximity to MRT stations, diverted demand away from the resale market towards the BTO market,” she explains.
Sales also slowed down during the year-end school holidays, when many Singaporeans tend to travel abroad. This typically leads to a decrease in house viewings and sales activities.
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However, Wong Siew Ying, head of research and content at PropNex, attributes the slower growth rate in the fourth quarter of 2024 to government intervention in August of that year. This included a reduction of five percentage points in the loan-to-value (LTV) limit for HDB loans to 75%. “Based on the weaker sales and slower growth in the HDB resale price index in the fourth quarter of 2024, the August 2024 measures are likely to be impacting the market,” says Wong. She adds that the lower resale volume during the quarter could have also contributed to slower price growth.
Total Resale Volume in 2024 Rises 8% from Previous Year
The total resale volume in 2024 reached 28,876 units, an 8% increase from the 26,735 units in 2023 and the 27,896 units in 2022. However, this is still lower than the peak of 31,017 units in 2021.
The data, retrieved from PropNex Research and data.gov.sg on Dec 31, 2024, shows a decrease in the number of million-dollar flat transactions in the fourth quarter of 2024. There were only 283 transactions, compared to 331 in the third quarter of that year. Despite this decline, the total number of million-dollar transactions in 2024 reached a record high of 1,033 units, more than double the 469 transactions in the previous year.
Toa Payoh Town Leads Million-Dollar Resale Flat Deals in Fourth Quarter of 2024
Toa Payoh town saw the highest number of million-dollar resale flat transactions in the fourth quarter of 2024, with 58 transactions. 20 of these transactions were for four- and five-room flats at Alkaff Vista in Bidadari Park Drive, which had recently crossed the five-year minimum occupation period (MOP).
The new classification of Plus and Prime classification BTO flats may have played a role in driving more homebuyers towards HDB resale flats in central locations, says Eugene Lim, key executive officer of ERA Singapore. “These buyers may not be willing to accept the resale restrictions such as a 10-year MOP, rental restrictions after MOP, subsidy clawback upon resale, and resale income cap for future buyers.”
HDB Resale Prices Expected to Continue Rising, but at a Slower Rate in 2025
OrangeTee expects HDB resale prices to continue growing in 2025, but at a slower pace than in previous years. Prices have already reached new highs in many areas, which could pose affordability concerns for potential buyers. Sun also notes that the ongoing supply of BTO flats could help moderate price growth in the resale market. However, the extent of price stabilisation will depend on the number of BTO flats released by the government in the upcoming years.
HDB To Launch Largest Sale of Balance Flats Exercise in February 2025
In February 2025, HDB will launch its largest sale of balance flats (SBF) exercise, offering more than 5,500 flats across various towns, says Lee Sze Teck, senior director of data analytics at Huttons Asia. “Some prospective resale flat buyers may decide to wait and try their luck,” he adds.
Interest Rates Could Go Lower in 2025, Allowing Buyers to Take On Larger Loans
Interest rates could decrease in 2025, which would allow buyers to take on larger loans to purchase a new home. “Some buyers may also consider an executive condo (EC) or a resale condo,” says Lee. He projects that the million-dollar flat market may stabilise between 900 to 1,200 units in 2025.
Huttons expects HDB resale flat transactions to reach between 26,000 to 28,000 in 2025, with prices expected to increase at a slower pace of 5% to 8%.