The HDB resale price market is expected to grow by 3-5% in 2024

It is possible that prospective buyers might be deterred by the stricter restrictions placed on Plus and prime flats located in high-demand locations (such as those near MRT and town centres), and instead decide to purchase nearby resale apartments.

In certain places, the demand for resale items will increase. In some locations, the increased demand could result in more million-dollar resale sales. She said that some singles might be diverted from the market of resales because they can apply for new apartments in all areas.

It was evident that there was more interest for newer flats on mature estates, which did not have restrictions regarding resale. Such flats with no restrictions are considered to have a better future capital appreciation and buyers are willing now to purchase them.

HDB is launching 20,000 to 25,000 BTO flats next year, to stabilise the price of resale properties.

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Due to the increase in BTO supply, the elevated resale price, and the effects of September 2021 cooling, it may be some time before we see the same robust sales as in 2021. More than 31,000 units were resold.

Yet, as long as income growth is positive and job prospects are improving, demand should remain higher than the 10-year-average of 22,809 HDB resale units from 2013-2022. A number of policy modifications were made during the year.

This included the doubling of grants to buyers who bought resale units, the requirement of an HDB Flat Eligibility Letter (HFE) before purchasing a unit, and penalties for those who did not select BTO apartments.

Although the BTO is expected to increase competition in the resale market next year, it is unlikely that a resale pricing correction will occur.

In 2026, 31,000 MOP flats will be available from the secondary marketplace, which is existing resale homes.

Prices for HDB resale homes will moderate as a result of the combined supply from BTO and secondary markets released in 2024-2026. However, from 2026-2028 the supply of resale apartments will start to fall as the total volume of resale sales has decreased in 2022 and ‘2023.

Despite a slowdown in the overall price increase for resale homes, the number million-dollar sales continued to grow. HDB flats that were sold at least S$1mil as of November 30 were 422 units. This was 14 per cent above the previous record of 369 HDB deals in 2022.

In 2023, the resale prices reached a new high with the June sale of a huge 176-square-metre adjacent flat in Bukitmerah. It sold for S$1.5million. Analysts believe that HDB apartments will be sold at S$1 million and above in 2023. That’s 25 per cent higher than the previous year.

The estimate of the supply of HDB flats is based on how many HDB flats are leaving their Minimum Occupation (MOP) period, a period lasting five or ten years when owners can’t sell their units. Even though not every owner will list their property, the number flats leaving their Minimum Occupation period (MOP), a five- or 10-year period when owners are prohibited from selling their units, counts towards the number of available flats.

The number of new flats reaching their five-year MOP will be 15,748 in 2023 – less than half the 31 325 units of 2022. She believes that the MOP supply will decrease further in 2024 and reach 13,093 flats.

The shrinking supply will support prices in some places. “Existing stocks may continue shrinking as some flat-owners delay their upgrade plans and stay in their flats owing to the high cost of replacing a new home. Resale housing is a good option for buyers who are in a hurry to find a home, especially with all the incentives and grants available.

Sembawang is one of those towns, along with Tampines, Sengkang or Toa Payoh. These 13093 HDB units will finish their MOPs in the next year. They represent 61 percent of total units.

HDB Upgraders could also add to this by selling their flats after they receive the keys to a newly constructed home.

The annual supply of newly completed MOP flats from BTO projects is expected to decline after 2023. By 2026, it will be down to 8,000 new flats. This is because BTO flats, which were to be completed by 2020 and 2021 but were delayed due to the Covid-19 epidemic, have a lower supply during the pandemic.

HDB resale property prices are expected remain steady over the next 12 months, with a growth of 3 to 5 percent forecasted for 2024.

The moderate price increase estimates are on par with a 4 to 5.5 percent growth that the HDB Resale Market is expected to see in 2023. This, however, would be much slower than a 10.4 percent rise in the year 2022 and a 12.7% spike in the year 2021. Prices increased by 3.8% in the first 9 months of 2023.

This year the resale marketplace has been impacted due to the increased supply, buyers who are wary of inflation and their resistance to higher price increases.

While HDB’s resale-price index hasn’t seen a decrease in overall prices yet, the volume of transactions decreased over the past year. Analysts estimate the total volume of resale apartment transactions to be 26,500 units in 2023. This is 5 percent lower than 27,896 flats the year prior.

HDB says it will provide 23,000 new Build To Order flats (BTOs) in 2023. It will also provide a further 100,000 flats to meet demand from 2021 to 2030.

The rising prices of resale apartments led the government in 2023 to restructure the framework for the new construction of public housing. BTO apartments will be classified in three levels by the second half 2020. The more prestigious Plus and Prime apartments will have to face tighter restrictions on resale, including a 10-year MOP and the clawback of subsidy.


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