HDB Resale Prices Surge 2.5% in Q3 2024, A Booming Market?

SINGAPORE – The resale market for Housing Development Board (HDB) flats has experienced a notable uptick, with prices climbing by 2.5% from July to September 2024. This growth outpaces the previous quarter's increase of 2.3%, solidifying a trend of rising prices that has persisted since the second quarter of 2020.

According to preliminary data released by HDB on October 1, a total of 8,035 resale flats were transacted in Q3 2024, an increase from 7,352 in the preceding quarter. The sales volume also reflects a remarkable 20% rise compared to the same period last year, when only 6,695 flats were sold.

This increase in resale prices and sales activity is attributed to robust demand in the market coupled with tighter supply. Fewer new flats reached the minimum occupation period (MOP) in 2024 than in 2023, constraining options for potential buyers. Notably, the third quarter of 2024 set a record with 328 resale flats sold for over a million dollars, bringing the total for the first three quarters of the year to 747 transactions—well above the 469 recorded for all of 2023.

"This quarter saw the most significant growth since the third quarter of 2022, which recorded a 2.6% increase in prices," stated Ms. Christine Sun, chief researcher at property firm OrangeTee Group. Despite the rising prices, million-dollar transactions still represent only about 2% of all HDB resale activity over the past 18 months.

The demand surge may be influenced by homeowners upgrading from smaller flats to larger ones amid high private property prices, and an increasing number of private homeowners seeking more affordable options in the resale market.

As we approach the end of the year, it's anticipated that resale volumes might taper off slightly during the holiday season. However, potential buyers could be lured by the upcoming October Build-To-Order (BTO) sales exercise, where approximately 8,500 new flats are set to launch, representing more than 40% of the total new flat supply for 2024.

This October BTO will be distinctive due to the introduction of a new classification model—Prime, Plus, and Standard—moving away from the previous categories of mature versus non-mature estates. Under the new model, Prime and Plus flats will impose stricter resale restrictions, including a lengthened MOP of 10 years, potentially steering more buyers toward the resale market.

HDB has indicated that they are currently processing applications for HDB Flat Eligibility from buyers interested in taking part in the upcoming BTO exercise. With the rising resale volume, analysts predict that the total number of flats sold by year's end could surpass figures from 2022 and 2023, with projections estimating between 28,500 and 29,500 units changing hands by December 2024—a significant increase from the 26,735 flats sold in 2023.

As the HDB resale market continues to thrive, many are left questioning—could this be the peak, or is there more growth ahead? Stay tuned for updates as the year progresses!