Resale Flat Prices Rise 25 3Q2024 Hdb Flash Estimates

The Housing Development Board (HDB) has announced that resale flat prices have increased for the 18th consecutive quarter. According to flash estimates released on Oct 1, resale prices have risen by 2.5% quarter-on-quarter (q-o-q) in the third quarter of 2024. This is an acceleration from the 2.3% q-o-q growth in the previous quarter. In fact, this is the fastest quarterly growth since the third quarter of 2022, when prices rose 2.6% q-o-q. Since the beginning of this year, resale prices have climbed by 6.8%, which is faster than the 3.8% increase seen in the same period last year. However, the current price growth is still slower than the 8% surge recorded in the first three quarters of 2022.

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The continuous increase in HDB resale prices is attributed to strong demand and tight supply. HDB has mentioned that there are fewer new flats that have reached their minimum occupancy period (MOP) this year compared to last year, leading to a shortage in supply. As of September 29, there were 8,035 resale flat transactions, which is a 20% increase from the same period last year when there were 6,695 transactions.
According to Christine Sun, chief researcher and strategist at OrangeTee Group, four-room flats saw the biggest price growth of 3.4% q-o-q, followed by two-room flats (2.9% growth), three-room flats (2.8% growth), and executive flats (2.4% growth). On the other hand, five-room flats saw the slowest q-o-q price growth of only 1.5%, based on data from data.gov.sg as of October 1.
One of the reasons for the increase in demand for four-room flats could be due to HDB upgraders opting to purchase larger flats as private property prices remain high. The affordability of HDB resale flats may also have led to more private home downgraders choosing to buy these flats.
The number of HDB resale flats sold for over a million dollars has also increased significantly. In the third quarter of 2024, 328 resale flats were sold for a million dollars or more, a 39% q-o-q increase from the previous quarter and over 250% higher than the same period last year. These million-dollar flats made up over 4% of the HDB resale market. According to Lee Sze Teck, senior director of data analytics at Huttons, around 90% of these transactions took place in mature estates, with Kallang-Whampoa, Bukit Merah, and Queenstown seeing the most deals.
Based on non-landed private home caveats, buyers with HDB addresses made up 28.8% of all transactions, which is lower than the 37.2% and 33.8% recorded in the first and second quarters of this year, respectively. Eugene Lim, key executive officer at ERA, believes that the lower number of condo upgraders may have led to more of these buyers opting for HDB resale flats, driving up both transactions and prices.
In total, there have been 747 million-dollar flat transactions so far this year, surpassing the 469 transactions recorded in the whole of 2023. Therefore, OrangeTee’s Sun believes that million-dollar flats are on track to double last year’s figure.
Despite the cooling measures implemented by HDB since 2021, demand for HDB resale flats is expected to remain strong for the rest of the year. This is due to lower interest rates and the recent reduction of Loan-to-Value (LTV) limits on HDB loans from 80% to 75%, which aligns them with loans offered by financial institutions. Huttons has revised its estimated total HDB resale transaction volume to between 29,000 and 30,000 for this year, which is higher than the previous estimate of between 26,000 and 28,000. The consultancy also predicts a price growth of 8% to 10% for the year.
The October Build-To-Order (BTO) exercise will offer about 8,500 flats across 15 projects, which is equivalent to 40% of all BTO units launched this year. This exercise will also introduce a new classification of HDB flats into Standard, Plus, or Prime based on their location attributes. The resale restrictions for Plus and Prime flats are more stringent, such as a longer MOP period, resale income ceiling, and subsidy clawback upon resale. ERA’s Lim expects this exercise to attract some buyers away from the resale market, but this may be offset by buyers seeking resale units in prime locations to avoid the tighter resale restrictions. It is important for homebuyers to exercise caution and avoid overpaying, as many buyers are already paying a premium for lower floor units, smaller units, or those located farther from the city centre.