HDB resale prices up 2.1% in Q2, marking fastest quarterly rise since 2022

The spike in resale prices and volume are driven by strong demand coupled with tightness in market supply as fewer flats met the minimum occupation period in 2024 compared to the year prior

Michelle Zhu
Published Mon, Jul 1, 2024 · 09:20 AM — Updated Mon, Jul 1, 2024 · 03:00 PM
    • HDB expects domestic mortgage rates to remain elevated relative to the low level seen over past decades.
    • HDB expects domestic mortgage rates to remain elevated relative to the low level seen over past decades. PHOTO: BT FILE

    HOUSING and Development Board (HDB) resale prices booked their fastest quarterly rise since 2022 amid a rise in demand and tighter supply. 

    Flash data released by the housing board on Monday (Jul 1) showed that HDB’s Resale Price Index (RPI) for the second quarter of 2024 stood at 187.6, up 2.1 per cent from Q1.

    This nearly met the pace of growth last registered in 2022, when the index climbed 2.3 per cent to 171.9 in Q4 from the quarter prior.

    Resale volumes for Q2 2024 up to Jun 27 stood at 7,208, representing a 14.5 per cent year-on-year increase.

    HDB said the spike in both resale prices and volume were driven by a strong broad-based demand, coupled with some supply tightness in the market as fewer flats met the minimum occupation period (MOP) in 2024 as compared to the year before.

    Huttons Asia’s senior director for data analytics Lee Sze Teck noted more interest in resale flats within mature estates, especially those located close to, or next to, a Prime Location Housing (PLH) Build-To-Order (BTO) project.

    A NEWSLETTER FOR YOU

    Tuesday, 12 pm

    Property Insights

    Get an exclusive analysis of real estate and property news in Singapore and beyond.

    “This is probably because such resale flats do not have the PLH restrictions,” said Lee.

    In view of the increased volume of resale transactions in H1, Huttons estimates volumes for the full year to come in between 26,000 and 28,000. The agency now expects resale prices to increase by up to 8 per cent for 2024, compared to the earlier 3 to 5 per cent forecast.

    Separately, PropNex said it expects around 27,000 to 28,000 resale flats to be be sold in 2024, with prices rising around 6 to 7 per cent for the year.

    Its head of research and content, Wong Siew Ying, pointed out that the average resale prices of two- to five-room flats in Q2 2024, along with that of executive flats, were at their highest since 1990.

    She also noted a higher number of resale flats sold for at least S$1 million in the latest quarter.

    “The number of resale flats sold for at least S$1 million hit a new quarterly high in Q32 2024 at 236 units – up by 29 per cent from 183 of such flats sold in the previous quarter. This takes the number of such flats transacted to 419 units in the first six months of the year – and it looks likely to breach the record of 469 units resold in 2023, possibly as early as July,” said Wong.

    Christine Sun, chief researcher and strategist at OrangeTee Group, observed a more pronounced acceleration in price growth for five-room and three-room resale flats.

    In her view, increased housing grants for eligible homebuyers has made resale flats more accessible and affordable for many homebuyers, particularly young couples.

    “We have also noticed a growing number of private property homeowners returning to the resale market after completing the mandatory 15-month wait-out period, which was implemented in September 2022 for those who want to downgrade to a resale flat. This may have contributed to an increase in demand for flats, especially larger units,” said Sun.

    While HDB noted “sound” overall economic conditions, it said the global economic outlook remains subject to uncertainties, especially from ongoing geopolitical instabilities that could precipitate global supply and demand shocks.

    It also expects domestic mortgage rates to remain elevated relative to the low level seen over past decades.

    “Households should exercise prudence in their property purchases and ensure that they can service their mortgages over the long term. The government will continue to monitor the property market closely and adjust its policies as necessary to promote a stable and sustainable property market,” said HDB.

    The board said it remains on track to launch a total of 100,000 flats from 2021 to 2025. 

    It intends to offer about 8,500 flats across 15 BTO projects in its upcoming October 2024 BTO exercise.

    Depending on their specific locational attributes, these projects will be offered across the new Standard, Plus or Prime categories.

    Nicholas Mak, chief research officer of Mogul.sg, said October’s BTO launches could potentially draw homebuyers away from the HDB resale market and in turn, lead to a slowdown in both volume and price growth in the second half of this year.

    He further highlighted that the majority of HDB projects to be launched in October were located near to transportation nodes such as MRT stations or LRT stations.

    “The release of such a large number of well-located BTO flats would pose significant competition to the HDB resale market,” added Mak.

    Sun of OrangeTee said resale flats in the vicinity of these projects may, however, still benefit from the upcoming BTO sales launch due to the heightened awareness of the area, along with the prospect of better amenities when these new flats are completed.

    “Moreover, buyers purchasing resale flats in the same locations continue to enjoy a shorter five-year MOP (than BTO flats in PLH locations, which come with a 10-year MOP),” she said.

    Copyright SPH Media. All rights reserved.