SINGAPORE: Singapore’s HDB resale market is expected to see moderate price growth in 2025, with prices likely to rise by 4 to 6 per cent, down from the projected 7.5 to 8.5 per cent increase in 2024, as supply falls to an anticipated 11-year low this year, according to OrangeTee’s HDB Resale Market Outlook for 2025.
Interest rates are also expected to drop, encouraging more purchases. This comes after a year of sharp price increases in 2024, driven by fewer resale flats reaching their five-year Minimum Occupation Period (MOP).
High replacement costs and property cooling measures also made upgrading private properties more expensive, causing many flat owners to stay in their current homes and reducing the resale supply.
What can Singaporeans expect in 2025
This year, the number of flats reaching their MOP is projected to fall to just 6,974 units, the lowest in 11 years. This is a sharp drop from 30,920 units in 2022 and marks the third consecutive year of declining supply. The previous low was in 2014, with 5,301 MOP flats.
The proportion of MOP flats in mature estates is also expected to rise, which could drive up overall prices. The share of MOP flats in mature estates is expected to increase from 39.3 per cent in 2024 to 54.3 per cent, while non-mature estates are expected to see a decrease from 60.7 per cent to 45.7 per cent.
Factors driving demand for resale flats
Despite the government being on track to launch 100,000 new BTO flats between 2021 and 2025, demand for resale flats remains high. In 2024, around 28,500 to 30,000 resale flats were sold, up from 26,735 in 2023 and exceeding the 10-year average of 24,866 from 2015 to 2024.
This is partly driven by limited options for second-time buyers, as priority is given to first-timers, as well as the 10-year MOP on Prime and Plus BTO flats, with many opting for flats with a five-year MOP and fewer resale restrictions.
According to the Department of Statistics Singapore, the number of Singapore citizens grew by 3.9 per cent to 3.636 million in 2024, while permanent residents rose by 11.5 per cent to 544,931.
This growing housing demand, combined with the supply shortage and challenging upgrading conditions, will keep the HDB resale market competitive for potential buyers, said OrangeTee.
Meanwhile, home financing is expected to improve in 2025 as mortgage rates will likely decline, boosting consumer confidence and encouraging more buyers to enter the housing market.
However, the supply shortage is expected to improve in 2026, with the number of available units nearly double to 13,480.
According to OrangeTee, from 2024 to 2026, the estates expected to have the most MOP flats are Punggol (5,016 units), Tampines (4,590 units), Toa Payoh (3,733 units), Queenstown (3,704 units), and Sembawang (3,089 units).
“We expect more resale flats to achieve prices exceeding one million dollars, as more flats in sought-after locations such as Toa Payoh and Queenstown will obtain MOP,” OrangeTee stated. /TISG
Read also: Why 1-room HDB prices are reaching record highs
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