SINGAPORE: Singapore Housing and Development Board (HDB) resale flat prices increased by 2.5% from July to September 2024. This growth is slightly faster than the 2.3% rise seen in the previous quarter.
Flash data released by HDB on Oct 1 shows that resale prices have gone up each quarter since the second quarter of 2020.
The latest figures reveal that 8,035 resale flats were sold in the third quarter, up from 7,352 in the second quarter. This number is also 20% higher than the 6,695 flats sold during the same period in 2023.
The increase in both prices and volume is due to strong demand and a tighter supply of available flats, according to HDB. Fewer new flats reached the minimum occupation period (MOP) this year compared to last year, pushing buyers towards resale units.
According to The Straits Times, a record of 328 resale flats were sold for over a million dollars in the third quarter, said Ms Christine Sun, chief researcher and strategist at OrangeTee Group.
She noted that this brings the total number of million-dollar transactions for the first three quarters of 2024 to 747, surpassing the 469 million-dollar sales for all of 2023. This quarter’s price increase is the largest since the third quarter of 2022 when prices rose by 2.6%.
While the number of million-dollar sales has grown, it still represents a small portion of the overall market, accounting for about 2% of all sales in the last 18 months.
Ms Sun suggested that the rising demand for HDB resale flats could be because many homeowners are upgrading from smaller flats to larger ones, especially with private home prices remaining high.
More private homeowners may also be considering resale flats due to their affordability.
However, Ms Sun noted that the volume of resale flats sold may decrease slightly in the year’s final quarter, as sales usually slow down during the holiday season.
Some buyers might also be interested in the upcoming October Build-To-Order (BTO) sales exercise, offering about 8,500 flats in desirable locations.
The October BTO exercise will introduce over 40% of the total new flat supply for 2024 and will be the largest release among the three launches this year.
Flats will be available in nine locations, including Ang Mo Kio, Bedok, Bukit Batok, Geylang, Jurong West, Kallang/Whampoa, Pasir Ris, Sengkang, and Woodlands.
This exercise will also use a new classification model, replacing the current mature and non-mature estate categories with Prime, Plus, and Standard classifications.
ERA key executive officer Eugene Lim noted that the tighter resale restrictions for Prime and Plus flats, including a longer MOP of 10 years and a subsidy clawback upon the first sale, could push more buyers toward the resale market.
HDB is currently processing applications from buyers wishing to participate in the October BTO sales. Experts believe that the number of HDB resale units sold by the end of 2024 could surpass sales from 2022 and 2023.
Wong Siew Ying, head of research and content at PropNex, expects around 28,500 to 29,500 resale units to be sold by the end of the year, compared to 26,735 in 2023.
The rise in HDB resale prices can also be linked to a growing number of transactions involving larger flat types, especially four- and five-room flats in high demand.
Mr Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors, pointed out that newer flats, particularly those with leases starting from 2013, have seen higher price gains.
For instance, the average prices of four-room resale flats with leases beginning in 2013 rose by 3.7% from the second to the third quarter of 2024.
HDB said it is important to note that these latest figures reflect market conditions prior to the cooling measures introduced by HDB in August when the loan-to-value limit for HDB loans was reduced from from 80% to 75%. /TISG
Read also: 236 units resold for over a million as HDB resale prices rise 2.3% in Q2
Featured image by Depositphotos (for illustration purposes only)