SINGAPORE - In a striking turn of events, the prices of resale Housing and Development Board (HDB) flats and private residential properties have shown signs of moderation in the first quarter of 2025, as indicated by preliminary estimates released by the Singapore authorities on April 1. This trend may signify a broader cooling in the property market.

Minister for National Development Desmond Lee suggested that the slowdown in price growth is primarily due to an increase in housing supply and a notable decline in overall private home transaction volumes. The flash estimates reveal that the HDB resale price index grew by a modest 1.5 percent in Q1 2025, down from a sharper 2.6 percent jump in the previous quarter—representing the lowest growth rate the index has seen in the last five quarters.

Over the past 20 quarters, the HDB resale prices have continuously increased, yet analysts are now pointing to a significant 7.7 percent drop in resale volumes compared to the same period last year. The growth rate for HDB resale prices during the first three months of 2025 registered at a lower 1.5 percent, when compared to a 1.8 percent increase seen in the same timeframe of 2024.

Minister Lee also noted that the sustained supply of Build-To-Order (BTO) flats and the unprecedented sale of balance flats (SBF) earlier this year have contributed to this moderation. The private residential price index, in turn, reflected a minor increase of just 0.6 percent during the first quarter, in stark contrast to a 2.3 percent surge observed earlier.

The total sales transactions dropped significantly, declining by 15 percent quarter-on-quarter as the market adjusted to the changing economic landscapes. Lee reaffirmed the government's commitment to maintaining a "strong supply of housing," projecting that over 50,000 BTO flats would be rolled out over the next three years. This plan includes 12,000 units with meaner waiting times of just over two years, alongside approximately 8,500 balance flats expected to be made available for sale this year.

Despite the slowdown, Lee mentioned a persisting tightness in supply owing to fewer resale flats nearing the minimum occupation period (MOP) in recent years—a situation exacerbated by delays attributed to the COVID-19 pandemic. However, the outlook appears promising with the number of new flats reaching MOP anticipated to rise substantially, increasing from 8,000 this year to 19,500 by 2028.

Real estate analysts are interpreting the tempered growth of HDB resale prices as an indication that some resistance to price hikes is forming. Christine Sun, a chief researcher at OrangeTee Group, observed that price growth had slowed across various flat types, with four-room flats witnessing a 1.9 percent increase compared to 2.2 percent previously.

Despite economic uncertainties, the HDB resale market is expected to remain resilient, supported by homeowners looking to upgrade and those downsizing to resale flats. Furthermore, Mohan Sandrasegeran from Singapore Realtors Inc emphasized the importance of launching more BTO flats with shorter waiting times to help ease demand pressures.

On the private housing front, Lee confirmed that supply had been ramped up through the Government Land Sales initiative, with about 8,500 units slated for release in the first half of 2025—an escalation of almost 60 percent higher than average figures from 2021 to 2023. Additional executive condominium (EC) units will be part of the supply as well, with close to 1,000 units planned for launch.

Market experts highlight that while buyers show a cautious approach amidst shifting sentiment, buying demand has seen an uptick since the end of 2024, buoyed by attractive suburban projects at competitive prices. However, they warn that the bulk of upcoming new launches are located in prime districts with higher price tags, which might limit overall sales volumes.

As Singapore navigates this transitional phase in its property market, one thing remains clear: while prices may be cooling, the thirst for housing in the city continues unabated. Investors and homeowners alike will need to keenly watch how upcoming launches and continuing economic developments shape the landscape in the months ahead.