The Government introduced a set of cooling measures on the HDB market in Aug 2024 to further stabilise the market and to encourage financial prudence.
The Loan-to-Value (LTV) ratio for HDB housing loans will be reduced by 5 percentage points to 75%. To minimise the impact on lower-income buyers, HDB will increase the Enhanced CPF Housing Grant for first-timers buying new and resale flats.
Resale demand may slow temporarily from Oct as buyers take stock of the new measures. But over time, demand will return and prices will continue to rise.
The faster pace of increase in HDB resale prices in the first six months of 2024 created a Fear Of Missing Out (FOMO) among some buyers in 3Q 2024. As there were fewer listings in some HDB towns due to a lower number of newly MOP flats, some buyers felt the pressure to quickly buy a resale flat.
Transaction volume of HDB resale flats was up by 20% quarter-on-quarter to 8,035 units in 3Q 2024. In 9M 2024, the estimated transaction volume of HDB flats was 22,455 units, 11.2% higher than the volume of 20,188 flats in the same period in 2023.
Despite the higher price tag, the proportion of resale flats sold in mature estates remained at 40%, similar to the previous quarter. Buyers were prepared to pay more for a better located resale flat.
Table 1: Transaction Volume of HDB Resale Flats in 3Q 2024
| 4Q 2023 | 1Q 2024 | 2Q 2024 | 3Q 2024* | Change | |
|---|---|---|---|---|---|
| 3-room | 1,633 | 1,719 | 1,854 | 1,884 | 1.6% |
| 4-room | 2,901 | 3,056 | 3,144 | 3,330 | 5.9% |
| 5-room | 1,435 | 1,639 | 1,657 | 1,819 | 9.8% |
| Executive/Multi-Gen | 386 | 445 | 473 | 489 | 3.4% |
| Total | 6,355 | 6,859 | 7,128 | 7,522 | 5.5% |
* Based on caveats and may differ from actual numbers
Source: HDB, Huttons Data Analytics as of 1 Oct 2024
Prices of HDB resale flats quickened their pace in 3Q 2024 to 2.5%, compared to 2.3% in 2Q 2024. In 9M 2024, prices of HDB resale flats jumped by 6.8%, much higher than the gains of 4.9% for the whole of 2023.
Table 2: Change in Average Prices of HDB Resale Flats in 3Q 2024
| 2Q 2024 | Change (2Q 2024) | 3Q 2024* | Change (3Q 2024*) | |
|---|---|---|---|---|
| 3-room | $434,728 | 2.9% | $446,925 | 2.8% |
| 4-room | $616,958 | 2.5% | $638,205 | 3.4% |
| 5-room | $723,794 | 2.8% | $734,488 | 1.5% |
| Executive/Multi-Gen | $867,456 | 1.5% | $888,574 | 2.4% |
| Total | $612,014 | 2.1% | $629,856 | 2.9% |
* Based on caveats and may differ from actual numbers
Source: HDB, Huttons Data Analytics as of 1 Oct 2024
Million-dollar flats
The number of million-dollar flats hit a high of 328 in 3Q 2024. An estimated 747 resale flats were sold for a million and more in 9M 2024, more than double the 336 million-dollar flats in 9M 2023.
Around 90% of the million-dollar flats in 3Q 2024 are in the mature estates. This may be due to buyers looking for flats in better locations. The Kallang/Whampoa estate had the highest number of million-dollar flats at 54, followed by Bukit Merah at 44 and Queenstown at 37.
Million-dollar flats made up more than 4% of islandwide market volume in 3Q 2024. However the proportion of million-dollar flats are high in certain towns like Bishan, Bukit Merah, Bukit Timah, Central Area, Kallang/Whampoa, Queenstown and Toa Payoh.
Figure 1: Proportion of million-dollar flats across HDB towns in 3Q 2024
* Based on caveats and may differ from actual numbers
Source: HDB, Huttons Data Analytics as of 1 Oct 2024
Outlook
In Oct 2024, the HDB will launch 15 BTO projects with an estimated 8,540 units under the new classification – Standard, Plus and Prime. Prime flats will be in the choicest locations and come with the tightest restrictions.
Demand for HDB resale flats is expected to stay strong in 2024 despite the cooling measures.
The cut in interest rates will translate into lower borrowing costs and a higher loan quantum for buyers. This may afford buyers the ability to look at HDB resale flats in better locations. Prices may increase as a result in the coming months.
In 2024, the number of million-dollar flats is likely to exceed 1,000 and reach 3% to 4% of total market volume.
Huttons is revising HDB resale volume up to between 29,000 and 30,000 for 2024 from an earlier estimate of 26,000 to 28,000. Prices of resale flats are forecast to grow between 8% and 10% in 2024.
