HDB resale prices increase 2.3% in Q2 of 2024, transactions up 4%

SINGAPORE: Housing and Development Board (HDB) flats prices rose 2.3 percent in the second quarter of 2024, an increase from the 1.8 per cent rise seen in the previous quarter. 

The Resale Price Index (RPI) for the second quarter of 2024 is 187.9, up from 183.7 in the previous quarter, according to data released by HDB on Friday (Jul 26).

The RPI reflects general price movements in the resale market. 

Resale transactions also increased for the second quarter of 2024, rising by 4 per cent, from 7,068 cases in Q1 to 7,352 cases in Q2.

Resale transactions in the second quarter of 2024 were 12.9 per cent higher compared to the same period in 2023.

The increase in the resale prices and volume this quarter was driven by a "strong broad-based demand, as well as some supply tightness in the market with fewer new flats meeting the Minimum Occupation Period in 2024 as compared to 2023", said HDB.

HDB noted that resale transactions for the quarter that have surpassed the million-dollar mark continued to make up a small proportion of total resale transactions.

Christine Sun, chief researcher and strategist at OrangeTee, noted that the number of million-dollar transactions set a new record in the second quarter of this year with 236 units.

This surpassed the previous high of 183 units in the first quarter of 2024.

A total of 419 million-dollar transactions were recorded in the first half of this year, and is on track to double the total number of 469 million-dollar flats transacted in the whole of 2023, said Ms Sun.

Despite the high visibility of million-dollar transactions, they comprised only 3 per cent of the 14,420 HDB resale flats sold in the first half of 2024, SRI's head of research and data analytics Mohan Sandrasegeran said.

"This highlights that while these transactions garner significant media and public attention, they form a minor segment of the overall resale market.

"The majority of transactions took place at more affordable levels, showcasing the diverse price range within the HDB resale market," he said.

HDB also noted that "the vast majority of resale flats were transacted at a much lower price and remained affordable".

FLAT SUPPLY

HDB said it will offer about 8,500 flats across 15 Build-To-Order (BTO) projects in the October 2024 BTO exercise.

The new BTO projects will be offered as Standard, Plus or Prime flats based on their specific locational attributes, with more details shared during the launch.

For those interested in participating in the October 2024 exercise, HDB said they are encouraged to apply for a valid HDB Flat Eligibility (HFE) letter early and submit all required documents by Sep 15.

The housing board added that it is on track to launch a total of 100,000 flats from 2021 to 2025.

"HDB is committed to providing affordable and accessible housing options to Singaporeans. 

"We will continue to monitor the housing demand closely, making adjustments where necessary," it said.

RENTAL MARKET

Approved rental applications of HDB flats rose by 1.7 per cent from 9,398 cases in the first quarter of 2024 to 9,554 cases in the second quarter.

However, the number of approved applications was down 2.9 per cent compared to the same period in 2023.

There were 58,596 HDB flats rented out at the end of the second quarter of 2024, HDB said, adding that this was an increase of 0.4 per cent over the previous quarter.

Ms Sun anticipates that overall leasing volume will continue to fall in the second half of the year due to the reduction in rental inventory and the year-end lull.

"The number of flats reaching their minimum occupation period has decreased over the last two years, leading to a decline in available rentals.

"Demand may also decrease as more tenants shift back to the private market, attracted by the competitive rental rates offered by landlords," she said.

MARKET OUTLOOK

HDB said that while "overall economic conditions are sound, the global economic outlook is subject to uncertainties, particularly stemming from ongoing geopolitical instabilities that could precipitate global supply and demand shocks".

Domestic mortgage rates are expected to remain elevated relative to the low level seen over the last decade.

It also advised that households should exercise prudence in their property purchases and ensure that they can service their mortgages over the long term. 

"The government will continue to monitor the property market closely and adjust its policies as necessary to promote a stable and sustainable property market," HDB said.

Resale flats in the second half of 2024 are likely to see robust demand from ex-private property owners and buyers who hastened their purchase out of fear of being priced out of the market, said Huttons' senior director of data analytics Lee Sze Teck.

"The faster pace of price growth in earlier quarters is likely to increase anxiety and spur quicker buying decisions," he added.

Mr Lee expects prices of resale flats to grow up to 10 per cent in 2024, up from an earlier estimate of 3-5 per cent.

Mr Sandrasegeran, meanwhile, expects HDB resale prices to increase by 5 to 7 per cent.

He mentioned that the extended gap between BTO and Sale of Balance Flats (SBF) exercises is likely to influence some prospective homeowners, especially those in urgent need of housing, to explore alternatives such as the resale market.

"The delay in available options may prompt these potential home seekers to seek more immediate solutions, further boosting demand in the resale segment.

"The potential growth in demand, coupled with the limited supply of newer flats, is expected to maintain competitive prices in the resale market," he said.