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RESALE prices of public housing flats rose 2.6 per cent in the fourth quarter of 2024, bringing the full-year increase to 9.7 per cent, on the back of stronger demand and supply constraints.

Data from the Housing and Development Board (HDB) showed that the rise, announced on Friday (Jan 24), was a notch higher than the earlier estimated 2.5 per cent released on Jan 2. It eased marginally from a 2.7 per cent hike during the third quarter.

For the year, resale prices rose 9.7 per cent, significantly more than the 4.9 per cent increase in 2023, but less than the 10.4 per cent price gain in 2022. 

In comparison, prices of private residential homes grew 3.9 per cent in 2024. This makes the HDB resale segment the “best performer” last year, highlighted Wong Siew Ying, PropNex’s research head. 

Cumulatively, prices were up 50.3 per cent between Q1 2020 and Q4 2024, with an average increment of 2.6 per cent each quarter, said Christine Sun, chief researcher and strategist at OrangeTee Group. 

Still, Sun said, the current price growth “pales in comparison to the more dramatic spikes” witnessed in the 1990s. From Q4 1991 to Q4 1996, prices surged by 294.4 per cent, averaging at an increase of 14.7 per cent per quarter. 

“The smaller cumulated price growth seen in 2020 can be largely attributed to various cooling measures that have been introduced in recent years to curb rapid price increases,” she added.

Supply squeeze

ERA key executive officer Eugene Lim chalked 2024’s 9.7 per cent price growth to robust demand and tighter supply, given that fewer new flats met the minimum occupation period (MOP) last year. 

With a lower number of such flats available, sellers could demand for higher prices, he said. 

The new Build-To-Order (BTO) classification system – where flats are categorised as Standard, Plus and Prime, with tiered buying, selling restrictions and varying subsidies – could have driven more homebuyers to the resale market, Lim added. 

Lee Sze Teck, Huttons Asia’s senior director of data analytics, noted that the number of million-dollar flat transactions hit a record high of 1,035 units in 2024. Districts with the highest proportion of such flats include Bishan, Bukit Merah, Bukit Timah, the central area, Kallang/Whampoa, Queenstown and Toa Payoh. 

Most were priced between S$1 million and S$1.1 million, although Lee noted a rising number of flats sold for more than S$1.1 million in the fourth quarter – “an indication of owners trying to push the value of their flats higher”. 

Nonetheless, Lee said, this figure moderated in the fourth quarter, falling 13.9 per cent over the previous quarter to 285 units. It accounted for 3.6 per cent of market volume in the year.

Prices dipped slightly in Q4 – to 2.6 per cent from 2.7 per cent in Q3 –  amid the seasonal year-end holiday lull, said Mohan Sandrasegeran, SRI’s head of research and data analytics. 

Lee of Huttons Asia added that some demand for resale flats may have been diverted to the new home market. The largest BTO launch was in October 2024, which drew more than 35,000 applicants for 8,573 new flats – the highest number since August 2022, he said. 

Others may be waiting for the next Sale of Balance Flats exercise in February – which will be the largest ever with over 5,500 units on offer, said Lee – or they could have taken advantage of lower interest rates to purchase a private home instead. 

Transaction volumes of resale flats consequently fell 21.1 per cent in Q4 to 6,424 units, from 8,142 in the previous quarter. Year on year (yoy), this was a 1.9 per cent decrease.

For the whole of 2024, 28,986 resale transactions were recorded, up 8.4 per cent from the prior year’s 26,735.

On the rental market front, 59,043 HDB flats were rented out as at the end of Q4, a minute decrease of 0.2 per cent from Q3.

HDB approved 8,603 cases to rent out the flats, a 5.6 per cent drop quarter on quarter and 12.1 per cent rise decrease yoy. In total, some 36,673 cases were approved for the entire 2024, down 6.3 per cent from the previous year.

Based on HDB’s latest data, the highest median rental price was for five-room flats in Queenstown at S$4,500. The lowest was for two-room flats in Sembawang at S$2,270.

Persistent upturn

In the coming year, analysts expect resale prices to continue climbing, albeit at a slower pace. 

For one thing, homebuyers may turn to public housing – which is more affordable than private residential properties – amid current economic uncertainties and geopolitical tension, said Nicholas Mak, chief research officer at Mogul.sg. 

OrangeTee’s Sun expects the supply of newly MOP flats to remain low at around 6,974 units – just 22.5 per cent of 2022’s 30,920 units, and the lowest level since 2014, when 5,301 units met their MOP. 

This is mainly due to construction delays and disruptions during the pandemic, resulting in fewer flats being delivered and therefore fewer newly MOP units, said Sandrasegeran of SRI. 

HDB will increase the BTO supply in 2025 to about 19,600 units to partly mitigate this, said Huttons Asia’s Lee.

Of the 19,600 units, around 3,800 will have a shorter waiting time of less than three years, said HDB. It added that overall, some 102,300 BTO flats will be launched from 2021 to 2025, surpassing the agency’s commitment to launch 100,000 units over the five-year period.

Wong of PropNex pointed out that cooling measures have been implemented, such as the reduction of the loan-to-value limit for HDB housing loans, from 80 per cent to 75 per cent, in August 2024. “It is likely that these measures are still working through the market, and we note that the pace of price growth did slow slightly in the immediate quarters following their introduction,” she said. 

The market may see up to 28,000 resale transactions and a price increase of 4 to 8 per cent in 2025, said analysts.