HDB resale price growth slows amidst tight supply

Though prices will continue to grow, a huge surge is unlikely analysts say.

Tight supply and more BTO flat launches are keeping HDB resale prices from surging but its upward momentum remains, analysts said.

According to government data, resale prices increased by 2.6% in Q4, a slight decline from the 2.7% growth recorded in the preceding quarter.

For the whole of 2024, resale prices grew by 9.7%, faster than the 4.9% in 2023 but slower than the increments of 10.4% in 2022 and 12.7% in 2021.

Christine Sun, Chief Research, & Strategist at OrangeTee said last quarter’s price growth may be affected by a decline in resale demand. Meanwhile, some buyers shifted to the primary market as over 8,500 flats were launched for sale under the Build-To-Order (BTO) exercise in October. Many buyers, especially first-time homeowners, were likely attracted to the newly categorised Prime and Plus flats, which are located in desirable areas. Moreover, eligible buyers might be enticed by the affordability and shorter waiting times of some of the new Standard flats. As a result, the demand for resale flats momentarily softened, leading to slower price growth in Q4 2024,” Sun said.

“HDB resale prices may continue to grow this year due to the limited supply of MOP flats. The number of flats obtaining their five-year MOP is projected to fall for a third consecutive year from 30,920 units in 2022 to 6,974 units in 2025. This is the lowest MOP number in 11 years, with the previous low occurring in 2014 with 5,301 units,” Sun said.

Huttons said that interest rates for HDB loans are at its lowest point in a year and may not go lower over the next few months. With a bigger loan quantum, some buyers may buy either an EC or a resale condo. The million-dollar flat market may possibly stabilise in the range of 900 to 1,200 units in 2025.

Both analysts predicted that prices to remain subdued with transactions between a median of 25,000 to 28,000.