HDB resale flat prices are expected to continue their upward trend in 2025, driven by a reduced supply of flats reaching their minimum occupation period (MOP), according to a report released by property consultancy OrangeTee Group on 11 February.
The report forecasts a 4% to 6% increase in resale prices this year, potentially extending the growth streak to a record-breaking 23 consecutive quarters unless major economic shifts or cooling measures intervene.
OrangeTee’s findings indicate that the ongoing price growth streak, which began in the first quarter of 2020, has already lasted 19 consecutive quarters as of the fourth quarter of 2024.
If this continues, it will surpass the previous longest streak of 20 quarters recorded between the fourth quarter of 1991 and the fourth quarter of 1996.
Q4 2024 resale trends and slowing growth
Citing HDB data, OrangeTee’s report notes that resale prices rose by 2.6% in the fourth quarter of 2024, slightly lower than the 2.7% growth recorded in the previous quarter.
For the full year, prices increased by 9.7%, exceeding the 4.9% growth in 2023 but remaining lower than the 10.4% and 12.7% increases seen in 2022 and 2021, respectively.
The report attributes the slowdown in Q4 price growth to a decline in resale demand, as some buyers turned to the primary market following the launch of over 8,500 Build-To-Order (BTO) flats in October 2024.
The newly introduced Prime and Plus flats, located in desirable areas, as well as more affordable Standard flats with shorter waiting times, likely attracted first-time buyers who would have otherwise considered resale flats.
OrangeTee’s analysis found that price growth varied by flat type. Prices of 4-room, 3-room, 2-room, and executive flats grew at a slower pace in Q4 2024, while 5-room and 1-room flats saw faster appreciation.
The report also highlighted that resale prices increased in 20 out of 26 HDB towns, with the largest gains observed in the Central Area (25.6%), Toa Payoh (12.1%), Tampines (6.9%), Bishan (6.7%), and Bedok (6.1%).
Declining sales volume in Q4 2024
OrangeTee’s report also noted a significant drop in transaction volumes in Q4 2024, citing HDB data that showed 6,424 resale flats were sold, representing a 21.1% decline from the 8,142 units in Q3 2024. This was the lowest quarterly transaction volume since Q2 2020.
For the full year, 28,986 resale flats were transacted in 2024, which was higher than the 26,735 units sold in 2023 and the 27,896 units in 2022, but lower than the 31,017 transactions recorded in 2021.
The report attributed the drop in Q4 sales to seasonal factors, as property activity typically slows during the year-end holiday period.
Additionally, the availability of new BTO flats in October 2024 likely diverted some demand from the resale market.
OrangeTee’s analysis also noted a decline in transactions of larger flats in Q4 2024, with 5-room and executive flat sales falling by 22.2% from the previous quarter.
However, demand for larger flats remained strong on an annual basis, with 8,468 such units sold in 2024, an 11.5% increase from 2023.
Record number of million-dollar flat transactions
Despite the overall decline in resale transactions, OrangeTee observed that the number of million-dollar flat sales remained high.
The report noted that 285 HDB flats were sold for at least S$1 million in Q4 2024, a 13.9% drop from 331 in the previous quarter. However, a total of 1,035 million-dollar flats were sold in 2024, more than doubling the 469 transactions recorded in 2023, setting a new annual record.
Limited supply expected to drive further price increases
OrangeTee’s report highlighted that fewer flats will reach their MOP in 2025, leading to a tighter supply of resale units. A total of 6,974 flats will become eligible for resale this year, marking the lowest figure in 11 years. By comparison, 30,920 units reached MOP in 2022.
The firm’s analysts noted that this supply limitation, combined with a stable economic and employment outlook, is likely to drive further price increases.
The report projects that resale prices will rise between 4% and 6% in 2025, with quarterly increases averaging between 1% and 1.5%.
While this projected growth is notable, OrangeTee pointed out that it remains far below the rapid price surges of the 1990s.
During the 20-quarter price increase from 1991 to 1996, resale prices rose by 294.4%, translating to an average quarterly gain of 14.7%. In contrast, from Q1 2020 to Q4 2024, resale prices grew by 50.5%, with an average quarterly increase of 2.7%.
Impact of upcoming BTO launches on the resale market
OrangeTee’s report noted that a key factor that could moderate price increases is the government’s plan to launch 50,000 new BTO flats between 2025 and 2027.
The first batch of 5,032 units was launched on 10 February 2025, with another 5,400 expected in July. Additionally, a record 5,590 flats were made available in the latest Sale of Balance Flats (SBF) exercise.
The government’s continued efforts to reduce BTO waiting times to under three years may also encourage more buyers to opt for new flats rather than purchasing resale units, potentially easing price pressures.
Outlook for 2025
OrangeTee expects that despite supply constraints, a sharp price surge in the resale market is unlikely due to the availability of new flats. The firm forecasts that resale prices will rise between 4% and 6% in 2025, while total transactions are expected to range between 25,000 and 27,000 units.
The report concluded that while the HDB resale market is expected to see continued price growth, external factors such as economic conditions and possible government intervention could influence the market trajectory in the coming quarters.
