Introduction
Based on the latest public housing statistics released by the HDB, the prices of
resale HDB flats increased by 1.8% quarter-on-quarter (qoq) in the first three months
of 2024, slightly faster than the 1.1% qoq price rise in the fourth quarter of 2023.
HDB resale volume
There is also an increase in the HDB resale transaction volume in the first quarter of
this year. The 7,068 resale HDB flats transacted in 1Q 2024 is 8.0% more than the
number of resale flats transacted in last quarter of 2023 and an increase of 1.3%
year-on-year (yoy).
In the first three months of this year, the biggest rise in HDB resale volume in terms
of quarterly rate of growth, was for the bigger flats, especially for Executive flats (E-
flats). The number of resale Executive flats sold in 1Q 2024 increased 15.3% qoq.
This was followed by a 14.2% rise in the number of 5-room flats transacted in the
January to March period this year. Please see Table 1.
Table 1: Number of HDB resale flats transacted
Source: Mogul.sg Research, HDB
The number of 3-room and 4-room flats transacted in 1Q 2024 increased by 5.3% for
both types of flats.
The figures shows that homebuyers prefer the bigger flats and are voting with their
cheque books.
The government has stopped selling and building new 5-room flats in mature estates
through the BTO exercises. Furthermore, in the past few years, new 5-room flats
could not be found in every BTO projects in the non-mature estates. As a result, the
only way that homebuyers can acquire the bigger flats, especially in the mature
estates, is in the resale market.
In addition, the rising price of private housing is pushing some cost-conscious buyers
seeking more spacious homes to the bigger HDB flats as these buyers may view that
such flat offer value for money.
HDB rental market
The rental demand for HDB flats has contracted for two consecutive quarters in 1Q
2024 and the pace of decline is gathering pace. In 4Q 2023, the number of HDB flats
rented out slipped by 0.7% qoq. In the following three months, the HDB resale
transaction volume fell by 4.0% to 9,398 flats. The number of flats rented out in 1Q
2024 is also 2.7% lower year-on-year.
The decrease in rental demand is partly due to the weaker job market leading to
fewer new arrivals of foreign talents. At the same time, the steady completion of new
HDB flats has also reduced the leasing demand from young families waiting for the
keys to their new flats. Fewer BTO flat buyers need to rent temporarily while waiting
for the completion of their new flats.
Outlook
The HDB resale demand and price growth has been largely tamed by the cooling
measures and large supply of BTO flats. Although the HDB resale price index is still
expected to rise by 4% to 6% this year, and between 24,000 and 26,000 HDB resale
flats could exchange hands in 2024, this rate of price growth and resale volume are
unlikely to trigger another round of government intervention because the current
market indicators point to a stabilized public housing resale market.
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