The HDB resale market experienced significant growth in 2024, with prices increasing by 9.7%, nearly double the 4.9% rise seen in 2023. This strong performance is attributed to robust demand and limited supply, which have driven up prices. Despite this impressive growth, the increase was slightly lower than the 10.4% rise in 2022, indicating a potential stabilization in the market.
Several factors have contributed to the surge in HDB resale prices. The tight supply of new Build-To-Order (BTO) flats has led many homebuyers to turn to the resale market. With fewer new flats meeting the minimum occupation period (MOP), the demand for resale flats has intensified, allowing sellers to command higher prices. The new BTO classification system, which categorizes flats as Standard, Plus, and Prime, has also influenced homebuyers' decisions, pushing more buyers towards the resale market.
In comparison, private residential homes saw a modest price increase of 3.9% in 2024, making the HDB resale segment the best-performing sector. The overall price growth for HDB resale flats was higher than initially estimated, as the Housing and Development Board (HDB) reported a 2.6% rise in the fourth quarter of 2024, slightly above the earlier estimate of 2.5%.
Analysts believe that the current price growth is modest compared to the dramatic spikes seen in the 1990s, largely due to the various cooling measures implemented in recent years. These measures have helped temper rapid price increases and maintain a more balanced market. For instance, in August 2024, the loan-to-value limit for HDB housing loans was reduced from 80% to 75%, contributing to the slight moderation in price growth.
Despite the impressive performance of the HDB resale market, transaction volumes fell by 21.1% in the fourth quarter, totaling 28,986 transactions for the entire year, an 8.4% increase from 2023. The rental market also saw a slight decrease in rented flats, with 59,043 units rented out by the end of the fourth quarter, down 0.2% from the previous quarter.
Looking ahead, analysts expect resale prices to continue rising in 2025, albeit at a slower pace. Economic uncertainties and geopolitical tensions may drive more homebuyers to the public housing market, which remains more affordable than private properties. The Housing and Development Board (HDB) plans to increase the BTO supply to 19,600 units in 2025, with around 3,800 units having a shorter waiting time of less than three years.
In summary, the HDB resale market has demonstrated remarkable resilience and growth in 2024, driven by strong demand and supply constraints. As the market continues to evolve, it will be essential to monitor the impact of new launches and cooling measures on future price trends.