HDB resale prices up 2.1% in Q2 amid firm demand, tight supply

SINGAPORE – Prices of Housing Board resale flats climbed 2.1 per cent in the second quarter of 2024, a quicker pace than the 1.8 per cent growth in the previous quarter.

This marks the 17th consecutive quarter where prices have increased, according to flash estimates released by HDB on July 1. The trend started in the second quarter of 2020.

A total of 7,208 HDB resale flats changed hands in the second quarter of 2024, up 14.5 per cent from the same period in 2023, when 6,297 units were sold.

HDB said the increase in resale prices and volume was driven by strong broad-based demand for resale flats.

It also attributed the rise to “some supply tightness” in the market as fewer flats reached their minimum occupation period (MOP) in 2024 than in 2023.

Citing elevated mortgage rates, HDB advised households to be financially prudent when buying flats and ensure that they can service their mortgages over the long term.

It said that while overall economic conditions are sound, the global economic outlook is subject to uncertainties stemming from ongoing geopolitical instabilities, which could result in supply and demand shocks.

“The Government will continue to monitor the property market closely and adjust its policies as necessary to promote a stable and sustainable property market,” HDB added.

Ms Christine Sun, chief researcher and strategist at property firm OrangeTee Group, said less frequent Build-To-Order (BTO) launches and Sale of Balance Flats exercises could have resulted in more home seekers turning to the HDB resale market.

From 2024, BTO sales exercises will take place three times a year – in February, June and October – down from the previous four launches a year.

Sale of Balance Flats exercises, which give applicants a chance to apply for balance flats from earlier BTO sales exercises, will happen once a year, down from twice yearly.

The only BTO launch in 2024 took place in February.

Mr Nicholas Mak, chief research officer at property search portal Mogul.sg, said that while prices increased across all flat types, prices of smaller resale flats rose at a quicker pace – possibly because of firmer demand from singles and retirees.

The median resale price of three-room flats stood at $410,000 in the second quarter of 2024, up 2.5 per cent from the median price of $400,000 in the previous quarter, he noted. In comparison, prices of four-room flats edged up 1.8 per cent, while five-room and executive flats climbed 2.2 per cent.

Mr Lee Sze Teck, senior director of data analytics at property firm Huttons Asia, said a total of 236 flats changed hands for at least $1 million in the second quarter of 2024.

Two five-room flats in Boon Tiong Road and Henderson Road were sold for $1.588 million each, setting a record for the highest transacted price for a resale flat.

The two transactions beat the previous record of $1,568,888 for a five-room flat at The Peak@Toa Payoh, which was sold in January.

Mr Lee added that although million-dollar flats remain in the minority – making up 3.3 per cent of total transactions in the second quarter – they have raised the expectations of flat owners in such estates.

“This is in part caused by buyers chasing after limited supply as HDB has not built five-room flats in the central region since 2017,” he said.

HDB plans to launch about 19,600 BTO flats in 2024. In June, it offered more than 6,900 flats across eight BTO projects in Jurong East, Kallang/Whampoa, Queenstown, Tampines, Woodlands and Yishun.

In October, it will roll out about 8,500 flats across 15 BTO projects in Ang Mo Kio, Bedok, Bukit Batok, Geylang, Jurong West, Kallang/Whampoa, Pasir Ris, Sengkang and Woodlands.

These projects will be offered under the new classification of flats into Prime, Plus or Standard categories based on their location. It will replace the current classification of estates as either mature or non-mature.

BTO units closer to amenities such as MRT stations and town centres will fall under the Prime and Plus categories. These flats will come with stricter resale conditions, such as a 10-year MOP and a subsidy clawback.

Standard flats, which will form the bulk of public housing supply, will come with a five-year MOP and have no significant restrictions on the pool of resale buyers.

HDB advised home seekers to apply for an HDB Flat Eligibility letter by Sept 15 so that they can take part in the upcoming BTO exercise.

It said it remains on track to launch 100,000 BTO flats from 2021 to 2025.