SINGAPORE: Housing and Development Board (HDB) resale prices are expected to grow slower in 2025, analysts said on Friday (Jan 24).
More Build-to-Order (BTO) flats with shorter waiting times will be launched for sale, while lower loan interest rates may attract more people to the private property market, they added.
Three analysts forecast an increase of between 3.5 per cent and 8 per cent this year – lower than the 9.7 per cent growth in resale prices last year.
OrangeTee Group’s chief researcher Christine Sun expects HDB resale prices to increase by 4 to 6 per cent.
Despite the number of flats reaching their five-year minimum occupation period (MOP) falling to the lowest in 11 years – 6,974 units – efforts to reduce the waiting times of BTO flats to under three years may encourage buyers to purchase those instead.
This will “divert more demand away from the resale market”, said Ms Sun.
HDB will launch about 19,600 BTO flats in 2025, of which 3,800 units will have a waiting time of under three years, National Development Minister Desmond Lee said earlier this month.
Mr Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc, noted the upcoming Sale of Balance Flats (SBF) exercise in February.
HDB said this would be its largest SBF exercise with more than 5,500 flats, of which about 40 per cent have already been completed.
These flats are “particularly appealing to home seekers who value the option of acquiring a brand-new, ready-to-move-in flat with a shorter waiting time compared to the typical BTO process”.
“A portion of these flats are already completed, providing an attractive alternative for those with immediate housing needs,” he added.
He expects HDB resale prices to increase “modestly” by 3.5 to 5.5 per cent.
“This reflects the interplay of robust demand, limited resale supply, and the tempering effects of policy measures, ensuring a sustainable and stable market environment,” added Mr Sandrasegeran.
Huttons’ senior director of data analytics Lee Sze Teck said HDB resale prices are likely to grow at a slower pace of 5 to 8 per cent this year.
He noted that interest rates for HDB loans are at its lowest point in a year and may not go lower over the next few months. With a bigger loan quantum, some buyers may buy either an executive condominium or a resale condominium, he said.
LONG GROWTH STREAK
HDB resale prices rose by 9.7 per cent in 2024 – slightly higher than flash estimates released early this month. Prices in the fourth quarter increased by 2.6 per cent from the previous quarter.
This marks the 19th consecutive quarterly rise, noted Ms Sun.
It is currently the second-longest growth streak, just behind the 20 consecutive quarters of growth seen from the fourth quarter of 1991 to the fourth quarter of 1996.
HDB said the resale prices in the fourth quarter were driven by a “strong broad-based demand, as well as some supply tightness in the market”.
The government had lowered the loan-to-value limit for HDB housing loans in August 2024 to cool the market.
Resale transactions for the last quarter of 2024 fell by 21.1 per cent, from 8,142 in the third quarter to 6,424 in the fourth. The total resale volume for the whole of 2024 increased by 8.4 per cent to 28,986.
