HDB resale prices up 2.3% in Q2, more units sold
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Data released by HDB showed that this was the fastest rate of growth since the fourth quarter of 2022, when prices rose by 2.1 per cent.
PHOTO: ST FILE
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SINGAPORE – Prices of Housing Board resale flats climbed 2.3 per cent from April to June, at a faster pace than the 1.8 per cent growth in the first quarter of 2024.
Data released by HDB on July 26 showed that this was the fastest rate of growth since the fourth quarter of 2022, when prices rose by 2.1 per cent.
A total of 7,352 resale flats were sold in the second quarter of 2024, up from 7,068 in the first quarter.
HDB said the increase in resale prices and volumes was driven by strong demand, and tighter market supply arising from fewer new flats meeting the minimum occupation period (MOP) in 2024 compared with 2023.
It added that million-dollar flat transactions were just a small proportion of total resale transactions in the second quarter of 2024, with the vast majority of resale flats sold at much lower prices.
HDB urged home buyers to exercise prudence in their property purchases, with the uncertain global economic outlook caused by ongoing geopolitical instabilities and elevated domestic mortgage rates.
Its comments come after real estate company ERA announced on July 22 that a five-room flat in Margaret Drive had sold for a record-breaking $1,725,888, and set a new benchmark in the HDB resale market.
Ms Christine Sun, chief researcher and strategist at property firm OrangeTee Group, said the number of resale transactions for the first half of 2024 has hit 14,420, marking the highest half-year sales since the first six months of 2021.
She attributed this to strong buyer demand, particularly for larger resale flats, as more private home owners may have fulfilled the 15-month wait-out period to purchase a resale flat.
Since Sept 30, 2022, private home owners have had to wait 15 months after selling their property before buying an HDB resale flat
Larger flat transactions accounted for a higher proportion of total sales, up from 28.6 per cent in the first half of 2023 to 29.2 per cent in the first half of 2024, noted Ms Sun.
Mr Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc, cited three reasons for the surge in demand for HDB resale flats – the lack of Build-To-Order (BTO) and Sale of Balance Flats (SBF) exercises, a limited number of flats reaching their MOP in 2024 due to lower flat completion numbers in 2019, and greater buyer interest in older flats.
He added that the absence of the BTO and SBF exercises may have redirected prospective buyers – especially those in urgent need of housing – to look for more immediate options in the resale market. This is because they would have to wait until October for the next launch of new BTO flats, and till February 2025 for the next SBF exercise.
The upcoming October BTO exercise will have HDB offering about 8,500 flats across 15 projects. These will include the first HDB flats in Bayshore “white flat” open concept
This will also be the first exercise where the new Prime, Plus and Standard classification model will be used, replacing the current categorisation of estates as either mature or non-mature.
Mr Sandrasegeran noted that 39.3 per cent of HDB resale transactions in the first half of 2024 involved older flats – those with lease commencements dating back to 1990 and earlier.
He said these older flats have become increasingly attractive to home buyers – with prices averaging $512,036 – due to their affordability. Some purchasers might have different investment plans or different life stage considerations – older buyers may prefer a shorter lease that aligns with their retirement plans, for example.
Mr Lee Sze Teck, senior director of data analytics at property firm Huttons Asia, noted that resale flats in mature estates that are near or next to a Prime Location Housing BTO saw increased demand in the second quarter of 2024.
He said that the proportion of transactions in mature estates increased to an estimated 40.2 per cent in the second quarter of 2024, up from 37.6 per cent in the first quarter.
Mr Lee added that 219 of the 238 million-dollar resale flat transactions were in mature estates, such as Kallang/Whampoa, Bukit Merah and Toa Payoh.
Two five-room flats in Boon Tiong Road and Henderson Road changed hands at $1.588 million each, surpassing the previous record of $1,568,888 for a five-room flat in Lorong 1A Toa Payoh, he said.
Attributing these record-breaking prices to policy changes, Mr Lee noted that the Government stopped building five-room flats in some mature estates, particularly those in the Central region, which makes such flats very rare and in turn leads to higher selling prices.
Looking ahead, Ms Sun said that the current market outlook for the public housing sector remains positive, underpinned by Singapore’s strong economic growth and improved hiring landscape.
She added that the new HDB resale portal helps to streamline and expedite the home selection process for prospective buyers, which may attract more buyers to the resale market.
Mr Lee also said that more buyers may experience the fear of missing out due to the fast pace of price growth in the first half of 2024, and may feel anxious to buy resale flats more quickly before prices increase further.
In view of the larger volume of resale flats in the market in the first half of 2024, Mr Lee said the number of resale transactions could go up to between 26,000 and 28,000 for the year, with prices rising by 10 per cent.
