SINGAPORE – Housing Board resale flat prices experienced a slight increase of 1.7% in the first quarter of 2024, surpassing the 1.1% growth seen in the previous quarter. This marks the 16th consecutive quarter of price growth since the second quarter of 2020, according to flash estimates released by HDB on April 1.
HDB has announced that the overall 2.8% price growth for the fourth quarter of 2023 and the first quarter of 2024 matches the total increase recorded in the second and third quarters of 2023. This indicates a stabilizing trend in the HDB resale market, as resale prices rose by 4.9% in 2023, a slower rate than the 10.4% increase in 2022 and the 12.7% climb in 2021.
Given the uncertain economic conditions and elevated mortgage rates, HDB has advised households to exercise financial prudence in their flat purchases. This advice is particularly relevant as the first group of private homeowners, who have completed their 15-month wait-out period after selling their homes, have contributed to stronger demand for larger HDB resale units and led to an increase in flats being sold for over a million dollars.
In the first quarter of 2024, the number of five-room and larger HDB flats sold rose by 10% compared to the previous quarter. Additionally, 185 flats were sold for at least $1 million in Q1, with January recording the highest number of million-dollar resale flat transactions.
However, these million-dollar flats constituted only 2.7% of the total transactions in the first quarter. 6,928 HDB resale flats changed hands in Q1 2024, marking a 5.5% increase from the same period in 2023 when 6,567 units were sold.
Analysts attributed the price increase to more first-time buyers opting for resale flats due to fewer Build-To-Order (BTO) sales exercises. They noted that it is uncommon for sales in the first quarter to exceed those of the previous quarter. The reduced frequency of BTO launches was due to the Chinese New Year festivities and the March school holidays.
Starting from 2024, BTO flats will be offered in three sales exercises held in February, June, and October, down from the previous four launches per year. The Sale of Balance Flats exercise, which allows applicants to apply for balance flats from previous BTO sales exercises, will now occur once a year instead of twice a year.
HDB plans to launch approximately 19,600 BTO flats in 2024. In February, it offered more than 4,100 flats across seven BTO projects. About 6,800 BTO flats will be rolled out in various locations in June. Home seekers are advised to apply for the HDB Flat Eligibility letter by May 15 to participate in the upcoming BTO exercise.
Experts anticipate that the BTO launch in June could significantly impact the resale market, especially for flats in popular locations like Tanjong Rhu and Holland Village. This June launch will also be the final sales release before the reclassification of flats into Prime, Plus, and Standard categories, which come with stricter resale conditions such as a minimum occupation period of 10 years and a subsidy clawback. Potential buyers are advised to consider these factors when making their purchasing decisions.
