Blog

RESALE prices of Housing and Development Board (HDB) flats may continue rising in 2025, due to a limited supply of flats reaching their minimum occupation period (MOP).

Fewer resale flats are anticipated to reach MOP this year compared to previous years, said an OrangeTee report released on Tuesday (Feb 11).

The number of flats obtaining their five-year MOP is projected to fall for a third consecutive year from 30,920 units in 2022, to 6,974 units in 2025. This represents the lowest MOP number since 2014 when there were 5,301 units, the report noted.

It added: “This decrease in available units could create scarcity in the housing market, potentially exerting upward pressure on resale prices.”

Increase in demand for resale flats may also outstrip supply, thus driving up prices.

This comes as Singapore’s gross domestic product growth and employment data are projected to remain steady, which could spur more individuals and families to seek new housing, said the report.

The resale prices in 20 out of 26 towns rose in the last quarter of 2024, with the central area logging the highest quarter-on-quarter increase at 25.6 per cent.

This was followed by Toa Payoh, where resale prices gained 12.1 per cent on the quarter. Prices at Tampines were up 6.9 per cent on the quarter, while those of Bishan and Bedok increased by 6.7 and 6.1 per cent, respectively.

Impact of BTO launches on resale prices

While prices could continue its upward momentum, a “big surge” is unlikely, said OrangeTee analysts.

This is because more Build-To-Order (BTO) flats will be launched for sale, with more than 50,000 new flats to be released between 2025 and 2027.

Some 6,424 resale units were sold in Q4 2024, down 21.2 per cent from the 8,142 units sold in the preceding quarter. This marked the “lowest quarterly sales” recorded since Q2 2020.

The analysts noted that the October BTO launch exercise, as well as year-end family travels, could have contributed to the decline in resale activity.

“Many buyers, especially first-time homeowners, were likely attracted to the newly categorised Prime and Plus flats, which are located in desirable areas,” they said.

“Moreover, eligible buyers might be enticed by the affordability and shorter waiting times of some of the new Standard flats.”

A total of 28,986 resale flats were sold in 2024. While this was higher than the 26,735 units sold in 2023 and 27,896 units in 2022, it is lower than the 31,017 units sold in 2021.

Efforts to reduce waiting times for BTO flats to under three years may also encourage more potential buyers to purchase such flats, thus diverting more demand away from the resale market, they added.

That said, demand for larger resale flats is still robust, driven by private homeowners who wish to downgrade or HDB owners who choose to upgrade. A total of 8,468 five-room and executive flats were sold in 2024, up 11.5 per cent from 2023.

Price projections

Looking ahead, OrangeTee analysts anticipate HDB resale prices to rise 4 to 6 per cent, assuming there are no additional property cooling measures and unforeseen macro conditions.

They also expect resale prices to average around 1 to 1.5 per cent growth per quarter.

“Prices are expected to reach their most prolonged continuous growth of 23 quarters by the end of this year,” said the analysts.

But they also noted that while the growth streak may be long, they estimate that the cumulated increase in prices would come in at around 58 per cent. This would translate to an average increase of 2.5 per cent per quarter, which is still smaller than what was recorded in the 1990s.

As for sales volume, the analysts expect between 25,000 and 27,000 resale units to be sold this year.