HDB resale market faces pressure as new BTO flats lure buyers: analysts

The large number of new flats were seen as factors that could divert buyers from the resale market.

The HDB resale market may experience slower demand following the February 2025 BTO exercise, according to real estate experts from OrangeTee, PropNex, and Huttons.

OrangeTee, PropNex, and Huttons all pointed to the large number of new flats, including those with shorter waiting times and the Sale of Balance Flats (SBF) exerciseas,  factors that could divert buyers from the resale market.

“This BTO launch provides a variety of flats with short waiting times as well as completed SBF units. Some individuals may choose BTO flats with shorter waiting periods or SBF flats, even if they are located further from the city center,” OrangeTee said.

"This is primarily because the affordability of BTO flats compared to resale options remains a significant deciding factor. As a result, some demand may shift away from the resale market. This decrease in demand could potentially slow the rate of price growth in the long run,” it added.

PropNex echoed this, adding that the scale of this launch—5,032 BTO flats and 5,590 SBF units—could lead to a lower application rate compared to previous exercises.

“As for the BTO offerings in February, we estimate that the application rate could be around 3 times—lower than the application rate of 4.2 times for the October 2024 BTO exercise—given that the large supply of SBF units may draw some applicants’ attention,” PropNex added.

Huttons noted that the launch of completed SBF flats and shorter-waiting-time (SWT) BTO flats may help stabilise resale prices in light of the limited new supply from MOP flats.

“These SWT flats and completed SBF flats are very attractive to buyers and may pull demand away from the resale market. This may address the supply drought in the resale market. In 2025, there are around 6,974 flats that will meet the 5-year MOP,” Huttons said.

“This is the lowest supply of MOP flats in 10 years. With the launch of SWT and SBF flats, it may stabilise prices in the resale market,” it added.

The upcoming July 2025 BTO exercise is also expected to be a key factor in the market, as it will feature projects in Bukit Merah, Toa Payoh, and Clementi—locations that could further influence demand in the resale market in the months ahead.