Summary
HDB Resale Market Growing in 2Q 2024
(1) Prices of HDB resale flats grew faster than private housing prices in first half of 2024.
(2) The strong demand for HDB resale flats is partly driven by economic uncertainties and concerns over job security. The new classification of HDB BTO flats also contributes to rise in demand for resale flats.
(3) Short of a severe government intervention, the trajectory of the demand and price trend of HDB resale flats will bring the total number of resale flats sold this year to between 27,000 and 29,000 units. HDB resale prices could edge up about 6% to 8% yoy higher in 2024, higher than the 4.9% yoy price growth in 2023.
Introduction
The growth momentum of resale prices of public housing accelerated in the second quarter of 2024 (2Q 2024). The HDB resale price index increased 2.3% quarter-over-quarter (qoq) in the second quarter, faster than the 1.8% qoq growth in the preceding quarter.
Grew faster than private housing prices
The HDB resale prices expanded by 4.2% in the first six month of this year, which is the fastest rate of price growth over a 6-month period since the second half of 2022.
The HDB resale price growth also outperformed that of the private housing prices. In the first half of this year, the private housing price index increased 2.3%, slower than the 4.2% of HDB resale flat prices. On a year-over-year basis, the price index of HDB resale flats also appreciated faster at 6.6%, than the 6.0% price growth of private residential properties.
Table 1: Price growth of HDB resale flats and private residential properties
| Growth rate of HDB resale price index | Growth rate of private housing price index |
Over past 6 months | 4.2% | 2.3% |
Over past 12 months | 6.6% | 6.0% |
Source: Mogul.sg Research, HDB, URA
Concerns over job security fuel demand for HDB resale flats
The number of HDB resale flats transacted in 2Q 2024 has inched up 4.0% qoq to 7,352 units. Compared to the corresponding period a year ago, the HDB resale volume increased 12.9%.
The rise in the demand for resale public housing is more significant in the first half of this year. In the first six months of 2024, a total of 14,420 HDB resale flats exchanged hands, an increase of 6.9% over the 13,493 resale flats sold in 1H 2023.
The economic uncertainties and concerns over job security contributed to the growth in the demand for HDB flats. Some homebuyers who could previously purchase private residential properties turned more cautious and acquired HDB resale flats instead. This is because the price of a HDB resale flat is typically about half the price of a condominium unit of similar size and in the same location.
New classification of HDB BTO flats contributes to rise in demand for resale flats
Another factor driving the demand for HDB resale flats is the introduction of the new classification of HDB Build-to-order (BTO) flats in 2H 2024.
HDB BTO flats located in the Central Region or near town centres and MRT stations Outside the Central Region could be classified as HDB “Prime” and “Plus” flats from the second half of this year onwards. The buyers of such BTO flats will be subject to a Minimum Occupation Period (MOP) of 10 years, instead of the current 5 years for all HDB resale flats.
Some homebuyers who wants to buy public housing in the locations of future Prime and Plus flats may consider the 10-year MOP to be onerous and prefer the shorter MOP of resale flats.
Therefore, the new HDB classification contributes to the rise in demand for resale flats in popular locations, such as those near MRT stations, town centres and in the Central Region.
Rise in number of million-dollar flats
The rising demand for resale flats also contributed to the growth in the number of million-dollar HDB flats. A total of 540 HDB resale flats were transacted for at least $1 million each in the first seven months of this year, which exceeded the 469 million-dollar flats sold in the whole of 2023, based on available information.
As a result, the number of million-dollar HDB flats transacted in 2024 is going to reach a historical record. The rise in the number of such high-value flats is an illustration of the rising prices of housing in Singapore. From another perspective, it also reflects the success and popularity of Singapore’s public housing.
Market outlook
Short of a severe government intervention, the trajectory of the demand and price trend of HDB resale flats will bring the total number of resale flats sold this year to between 27,000 and 29,000 units, which is close to the resale volume in 2022. At the same time, the HDB resale prices could edge up about 6% to 8% yoy higher in 2024, higher than the 4.9% yoy price growth in 2023.
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