Amid 2025’s fresh uncertainties, opportunities and risks emerge in the HDB resale market
Singapore’s public housing market is well-positioned to achieve a better equilibrium between demand and supply, with price increases expected to moderate
[SINGAPORE] The public housing market experienced a flurry of activity in 2024, with resale volume reaching a three-year high and many transactions eclipsing the one-million-dollar threshold.
With resale prices moderating while still on an upward trajectory in the first quarter of 2025, how might the demand and supply equilibrium shift with the uncertainties arising from the ongoing tariff trade war? What opportunities are available, and what risks could flat owners encounter as they navigate the changing property market landscape?
Resale prices rose 1.5 per cent in Q1, slower than the 2.6 per cent recorded in the fourth quarter of 2024, while resale volume was down 7.7 per cent, flash data showed.
Singapore’s public housing market is well-positioned to achieve a better equilibrium between demand and supply.
The strong demand for resale flats, which resulted in notable price increases over the past few years, is expected to be moderated by the upcoming influx of flats reaching their minimum occupation period (MOP) and coming onto the resale market.
This adjustment will help maintain the affordability of public housing, particularly for first-time purchasers.
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Escalating trade tensions could affect Singapore’s gross domestic product growth trajectory, leading potential homebuyers to adopt a more prudent approach as they weigh the potential risks associated with an uncertain economic environment.
Amid the heightened caution, they may resist overstretching their budgets, potentially slowing the pace of price growth in the coming months.
Meanwhile, the government’s proactive fiscal policies aimed at fostering economic growth would reduce the need for further interest rate increases, thereby keeping mortgage rates manageable for buyers. Targeted housing grants and generous government subsidies for public housing will further enhance housing affordability and accessibility.
Steady demand from certain market segments
The Housing and Development Board’s (HDB) quarterly statistics showed that 28,986 resale flats were transacted in 2024, up from 26,735 units in 2023 and 27,896 units in 2022.
Overall prices for HDB resale flats grew 9.7 per cent in 2024, outperforming the 4.9 per cent growth in 2023. However, it lagged behind the increments of 10.4 per cent in 2022 and 12.7 per cent in 2021.
The price surge can primarily be attributed to a decline in flats reaching their five-year MOP, which resulted in a diminished supply of new flats available for resale.
In the private market, high replacement costs and cooling measures made it increasingly costly for flat owners to upgrade, especially with taxes levied on those who buy private homes while still occupying their current units. Consequently, some prospective HDB upgraders opted to stay put or upgrade to bigger resale flats instead of buying private homes.
Resale flats have become increasingly attractive to first-time buyers. Although resale ones are generally more expensive than Build-To-Order (BTO) flats, many prospective buyers still prefer HDB resale flats because they are available for immediate occupancy.
Several housing grant schemes, such as the CPF Housing Grant, the Enhanced CPF Housing Grant, and the Proximity Housing Grant, significantly ease the financial burden for first-time buyers.
Another growing segment of the market comprises private homeowners right-sizing their homes. Due to rising private home prices, many homeowners have sold their properties and downsized.
An increasing number have opted for resale flats, as they are relatively less expensive compared to private properties, enabling them to retain more savings for retirement. Many elderly homebuyers also receive grants for public housing.
Price support from widening gap
Even if price growth may continue to slow down, a steep price correction may be averted. The price gap between public and private homes remains wide and HDB resale prices in some areas may continue to rise as they play catch up to private home prices this year.
To illustrate, the median price of a four-room resale flat was S$361,000 in 2010. In the same year, the median price of a similar-sized non-landed home or condominiums, excluding executive condominiums, was about S$1.02 million – about 182.5 per cent higher than the price of four-room resale flats.
The price gap between the two property types widened to 304 per cent in the first two months of 2025 as the median price of condos rose at a significantly faster rate of 145.6 per cent, reaching S$2.51 million. The price of four-room resale flats increased at a more modest pace of 71.7 per cent to S$620,000.
Compared with new condos in the suburban Outside Central Region – where many HDB upgraders typically purchase private homes – the price difference between four-room resale flats and suburban condos of a similar size (between 1,000 and 1,200 square feet) was even greater at 190.7 per cent in 2010. It jumped to 309.5 per cent in January-February 2025.
Growing population, rising affluence to sustain long-term demand
Will demand continue to match the rising price levels? The continuous growth of our population will sustain the demand for resale flats.
Data from the Singapore Department of Statistics (DOS) showed that the citizen population rose by 3.9 per cent or 137,746 individuals from about 3.5 million in 2021 to 3.6 million in 2024.
Meanwhile, the permanent resident population increased by 11.5 per cent or 56,280 individuals from 488,651 in 2021 to 544,931 in 2024. The overall increase in the resident population will translate to more potential homebuyers.
Rising affluence and increased subsidies would be additional factors. In 2024, the median monthly household income from work in Singapore rose 1.4 per cent in real terms to S$11,297 after adjusting for inflation, data from DOS indicated. The rise in income levels will allow a greater segment of the population to buy resale flats.
Challenges ahead as supply gradually builds up
A key factor contributing to the rise in resale prices is the limited supply of flats that have reached their five-year MOP over the past few years. With fewer completed flats available for sale, demand has likely outstripped supply in recent years. This situation may change as the number of MOP flats is expected to increase in the upcoming years.
Projections from HDB data showed that the number of flats obtaining their five-year MOP is expected to decline for a third consecutive year, dropping from 30,919 units in 2022 to about 8,000 units in 2025.
This represents the lowest number of MOP flats in 11 years, with the previous low occurring in 2014, when only 5,301 units reached their MOP.
However, we can expect more flats to reach their MOP in the next few years, with about 19,500 slated to do so in 2028
This potential supply in the resale market, coupled with the strong pipeline of more than 50,000 BTO flats to be launched from 2025 to 2027 and the balance flats that HDB will continue to offer, is expected to restore the demand-supply balance.
Buyers can expect more BTO projects to be launched from new growth areas such as Mount Pleasant, Pearl’s Hill, Turf City and Greater Southern Waterfront. Other areas such as Tengah Town, Chencharu, Woodlands North and Bayshore, will also see a progressive rollout of additional BTO flats.
The abundance of BTO and MOP flats will therefore dampen the pace of price growth over the next few years. As more of these flats enter the market, the increased supply could create a more competitive environment, leading to price stabilisation or even declines in certain areas. Consequently, sellers may encounter fewer opportunities for significant price increases in future.
While the government has said it may downgrade growth forecasts and anticipates a slowdown in global trade with steep new tariffs in place, Singapore’s economic growth is projected to remain positive. When consumers are assured of financial stability, they will likely make more substantial purchases, including housing, and demand for public housing will continue to be firm.
Christine Sun is chief researcher & strategist at OrangeTee Group; Yuvanalakshmi Mahendran is research analyst at OrangeTee & Tie
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