HDB Market Exhibits Moderate Price Growth Supported by Healthy Demand in 3Q 2024

SINGAPORE, 25 October 2024 

HDB Resale Price Index (RPI) and Transaction Volume

Continuing the trend of moderate price growth for resale flats, we have witnessed an uptick in prices for 3Q 2024, with the Resale Price Index (RPI) rising to 192.9. This represents an increase of 2.7% quarter-on-quarter (q-o-q) and 8.1% year-on-year (y-o-y). Additionally, this marks the highest growth observed since 3Q 2022.

Similarly, the volume of resale HDB flat transactions reached 8,142 units in 3Q 2024. This is 21.6% higher compared to the same period last year, which saw 6,695 transactions.

Chart 1: HDB Resale Index vs Number of Transactions

Source: HDB, ERA Research and Market Intelligence as of 25 October 2024

This increase in transaction volume is due to a confluence of factors including unsuccessful applicants from June Build-To-Order (BTO), homebuyers looking for centrally located flats without new restrictions (such as a longer 10-year MOP, resale income ceiling and subsidy clawbacks), and weaker buyers’ sentiment in the private market.

Speaking of BTO flats – the reclassification of BTO flats introduce resale restrictions might have discouraged and deterred homebuyers from purchasing a BTO flat, instead driving them to the resale market.

Large majority of HDB transactions remained affordable

Despite the robust growth in transaction volume, prices for most resale flats remained affordable, with 77.2% of HDB resale transactions under the $750k mark.

Chart 2: HDB Transactions by Price Ranges (3-room and larger flats)

Source: data.gov.sg as of 24 Oct 2024, ERA Research and Market Intelligence

Some 53% of the HDB resale transactions in 3Q 2024 fell between $500k and $750k, a comfortable price range for most Singapore homebuyers. Another 24% fell between $250k and $500k.

Table 1 : Median Prices of HDB Resale Transactions in 3Q2024

*denotes less than 20 transactions recorded in the quarter. Median prices are not shown as results are not representative
Source: HDB as of 25^th October 2024, ERA Research and Market Intelligence

By analysing the median resale prices of HDB flats transacted in the quarter, only 17 of 23 towns featured median transaction prices for 4-room flats below $750k. In addition to this, 23 of the 26 HDB towns featured median 3-room resale prices under $500k. This shows that the large majority of HDB flats remained affordable and accessible to Singaporeans.

Million Dollar Flats – Who Are Buying Them?

Some 331 million-dollar flats were transacted in 3Q 2024, this makes up merely 4.1% of the 8,142 resale transactions. This brings the million-dollar flats in first nine months of 2024 to 750.

Chart 3: HDB Flat Transactions over $1m

Source: HDB as of 24 Oct 2024, ERA Research and Market Intelligence

HDB upgraders who might have traditionally opted to purchase a private condominium have opened their options to purchasing these larger, newer and centrally located million-dollar flats. With the rising prices of private homes, they see the value proposition and are willing to pay for these cream-of-the-crop resale flats.

In addition to this, there are also private property sellers emerging from the 15-month wait-out period with the capital to fund these million-dollar HDB purchases.

Increased Activity in HDB Market as Buyers are Priced out of Private Homes

Some HDB upgraders are being priced out of private homes in 3Q 2024. Looking at non-landed private home caveats, purchasers with HDB addresses fell to 29.7%. This contrasts with 37.2% and 33.8% recorded in 2Q 2024 and 1Q 2024 respectively.

The lower number of condo upgraders likely means that these homebuyers defaulted to the HDB market instead, driving transactions and therefore prices. This homebuyer group has the capital and are willing to purchase million-dollar flats, leading to the rise in transactions.

Outlook for Final Quarter of 2024

The above statistics on the HDB resale market largely reflect the market conditions prior to the lowering of the Loan-to-Value limit for HDB loans from 80% to 75% on 20 August 2024 to cool the resale market and encourage greater prudence among home buyers.

In the final quarter of the year, there will be a month-long school holiday, which normally sees families travelling and more muted transaction activity.

Together with the BTO launch that happened in October that drew in over 35,000 applicants, we expect to see a more moderate demand for resale HDB flats to close out the year.

We can still expect strong demand and competitive prices for larger flats, such as 5-room and Executive flats, as the upcoming Plus and Prime BTO flats do not include 5-room or larger layouts.

The strong performance of the HDB resale market in 3Q 2024, ERA has revised our forecast for the whole year to an estimated total of 29,000 to 30,000 transactions. HDB price is anticipated to grew by another 3-5% price in 4Q 2024, bringing the total price growth for the whole year of 2024 up to 10%.

HDB Leasing

The number of approved applications to rent out HDB flats moderated further by 4.6% from 9,554 cases in 2Q 2024 to 9,118 cases in 3Q 2024. Compared to 3rd Quarter 2023, the number of approved applications in 3rd Quarter 2024 was 7.5% lower. Fewer HDB units are available for rent due to the dwindling number of MOP units and more HDB upgraders in the market. With that, this could push HDB rental prices further in the coming months.

For media enquiries, please contact:

Eugene Lim, Key Executive Officer, ERA Singapore

Email: [email protected]