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Rising HDB resale prices in Q2 2024: Strong demand and limited supply drive 2.1% increase

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  • HDB resale prices rose by 2.1% in Q2 2024, marking the 17th consecutive quarter of price growth.
  • The increase in prices and transaction volume is driven by robust demand and a tight supply of available flats.
  • HDB plans to launch approximately 19,600 BTO flats in 2024, with significant projects scheduled for June and October.

The Housing Development Board (HDB) resale market in Singapore continues to show resilience and growth, with prices climbing by 2.1% in the second quarter of 2024. This increase, which outpaces the 1.8% growth seen in the previous quarter, underscores the persistent demand for resale flats amid a constrained supply.

According to flash estimates released by HDB on July 1, 2024, this marks the 17th consecutive quarter of rising prices, a trend that began in the second quarter of 2020. The number of HDB resale flats sold in Q2 2024 reached 7,208 units, a significant 14.5% increase from the same period in 2023, when 6,297 units were transacted.

The surge in resale prices and transaction volume is primarily driven by strong, broad-based demand for resale flats. HDB attributes this trend to "some supply tightness" in the market, as fewer flats reached their minimum occupation period (MOP) in 2024 compared to the previous year.

Economic and Market Conditions

Elevated mortgage rates have prompted HDB to advise households to exercise financial prudence when purchasing flats, ensuring they can service their mortgages over the long term. Despite sound overall economic conditions, the global economic outlook remains uncertain due to ongoing geopolitical instabilities, which could lead to supply and demand shocks.

"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 stated.

Future Supply and Market Outlook

In response to the strong demand, HDB plans to launch approximately 19,600 Build-To-Order (BTO) flats in 2024. In June, more than 6,900 flats were offered across eight BTO projects in various locations, including Jurong East, Kallang/Whampoa, Queenstown, Tampines, Woodlands, and Yishun. An additional 8,500 flats will be rolled out in October across 14 BTO projects in areas such as Ang Mo Kio, Bedok, Bukit Batok, and Geylang.

These BTO projects will be classified into Prime, Plus, or Standard categories based on their location, with stricter resale conditions for Prime and Plus flats, such as a 10-year MOP and a subsidy clawback. Standard flats, which will form the bulk of public housing supply, will have a five-year MOP and fewer restrictions on resale.

Considerations for Buyers

Prospective buyers are encouraged to apply for an HDB Flat Eligibility letter by September 15 to participate in the upcoming BTO exercise. HDB remains on track to launch 100,000 BTO flats from 2021 to 2025, with more than 67,000 flats already launched as of February 2024.

Market Dynamics and Trends

The HDB resale market's performance in Q2 2024 is a testament to the robust demand and limited supply dynamics. As noted by property analysts, the demand for larger flats has been particularly strong, driven by first-time buyers and private property owners who have completed the mandatory 15-month wait-out period before purchasing resale flats.

The trend towards larger flats is evident, with a notable increase in transactions for five-room and larger units. This demand has pushed up prices, with some flats selling for over a million dollars, although these high-value transactions remain a minority in the broader market.

The HDB resale market in Singapore continues to thrive, with prices rising steadily amid firm demand and tight supply. As the government monitors the market and adjusts policies to ensure stability, prospective buyers should remain financially prudent and consider the long-term implications of their purchases. With significant BTO launches planned for the year, the market dynamics may shift, but the underlying demand for resale flats is expected to remain strong.

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