THE surge in housing resale prices and transaction volumes for the third quarter of 2024 exceeded earlier estimates, data released by the Housing and Development Board (HDB) on Friday (Oct 25) showed.
HDB’s Resale Price Index for Q3 represented an increase of 2.7 per cent over the prior quarter, or slightly above the 2.5 per cent reflected in flash estimates.
Transactions for the quarter rose by 10.7 per cent to 8,142 cases, from 7,352 in Q2 2024, and stood 21.6 per cent higher year on year.
Christine Sun, chief researcher and strategist at OrangeTee, noted that the latest resale volumes represent the highest quarterly sales since 8,433 resale units were sold in Q3 2021.
She said: “As private property prices remain elevated, the increased demand could be driven by more people upgrading within the same housing segment, from smaller resale flats to larger ones. More private home downgraders may have also opted to buy HDB resale flats for their affordability.”
HDB attributed the quarter’s growth in resale prices and volume to strong broad-based demand, as well as some supply tightness in the market, given that fewer new flats met the Minimum Occupation Period (MOP) in 2024 than a year ago.
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It added that the latest statistics largely reflect market conditions prior to the latest cooling measures, which included a lower loan-to-value limit for HDB loans from 80 to 75 per cent.
The board also highlighted that a vast majority of resale flats transacted during the latest quarter were at a price “much lower” than S$1 million. Resale transactions over the million-dollar mark “continued to make up a small proportion of total resale transactions”, it observed.
Eugene Lim, key executive officer of ERA Singapore, said that prices for most resale flats remained “affordable”, as a majority or 77.2 per cent of transactions were under the S$750,000 mark. More than half the transactions during Q3 were between S$500,000 and $750,000, which he considered “comfortable” for most homebuyers in Singapore.
Noting the median resale prices of HDB flats transacted in the quarter, Lim pointed out that 17 out of 23 towns featured median transaction prices for four-room flats below S$750,000.
Twenty-three of the 26 HDB towns had median three-room resale prices under S$500,000.
“This shows that the large majority of HDB flats remain affordable and accessible to Singaporeans,” he concluded.
Anticipated slowdown in Q4
In Sun’s view, housing demand could drop in the final quarter of 2024 because of the year-end holidays; also, an ample supply of BTO flats were released for sale in October. She nonetheless expects resale flat prices to remain elevated amid a tight supply of MOP flats, and forecasts overall HDB resale prices to grow by 7 to 8 per cent for 2024.
She added that homeowners living near future Prime and Plus flats may raise their asking prices, given that their flats would have a shorter MOP and are bound by fewer resale restrictions than new Plus or Prime flats.
Singapore Realtors Inc’s head of research and data analytics, Mohan Sandrasegeran, also expects the year to end with a “relatively stable market”, as prospective buyers and sellers take a pause amid the upcoming holiday season and the year-end school break.
Still, he anticipates the HDB resale market to remain resilient; he also projects 26,000 to 27,000 flats to be resold in 2024, and that prices would go up by between 7.5 and 8 per cent.
“This positive outlook is supported by robust market fundamentals, though buyers are encouraged to be prudent, balancing the evolving market opportunities with a focus on long-term financial sustainability,” he said.
Fewer approved rentals
The board approved 9,118 applications to rent out flats in Q3 2024, down 4.6 per cent from 9,554 cases in the quarter prior.
There were 59,178 HDB units rented out as at the end of September 2024, representing a 1 per cent increase over 58,596 units in the previous quarter.
ERA’s Lim said the decrease in HDB units available for rent was due to a dwindling number of MOP units and more upgraders in the market. In his view, this could push HDB rental prices up further in the coming months.
Sun of OrangeTee foresees rental demand to “face some pressure” as more tenants move into the condominium market upon private rents “becoming more attractive”. With this in mind, she believes leasing volumes could fall to 36,500 to 38,000 units in 2024, from 39,138 units in 2023.
Largest sale of balance exercise
HDB said it is set to offer 5,000 Build-To-Order (BTO) flats in Kallang/Whampoa, Queenstown, Woodlands and Yishun come February 2025.
That is also when it intends to hold its largest sale-of-balance (SBF) flat exercise to offer more than 5,500 flats across various towns and estates. About four in 10 of the SBF flats will be completed units. The rest will be completed progressively from 2025 to 2028.
This means more than 10,000 new flats will go on offer in February next year, said HDB, adding that it remains on track to launch a total of 100,000 flats from 2021 to 2025.
A total of 21,225 new flats have been launched by HDB to date, comprising 19,637 BTO flats and 1,588 flats offered under the SBF exercise in February 2024.
