Could 2024 HDB resale prices surpass 2023 levels?

In 1Q24, prices rose faster, by 1.8% QoQ.

HDB resale prices in 2024 could outpace 2023 amidst high demand from first-time buyers, downsizing private homeowners, and limited flat availability, real estate expert said.

Taking into account the three factors, OrangeTee said HDB resale prices may rise by up to 5% in 2024, slightly higher than the 4.9% growth in 2023.

Huttons predicts a full-year price growth of 3% to 5%.

"Demand from first-time homebuyers and private homeowners who are downsizing from private properties may continue to prop up prices of HDB resale flats," OrangeTee said, adding that demand for resale flats remains strong.

OrangeTee stated that the limited availability of flats in certain areas is likely to maintain stable prices or cause them to trend higher in the coming years.

"For example, the number of flats that have reached their five-year Minimum Occupation Period (MOP) has decreased from 30,920 units in 2022 to 15,549 units in 2023. It is projected to drop further in 2024 to 11,952 units, which means that there will be fewer flats available for resale," OrangeTee said.

In 1Q24, prices rose at a "faster clip," rising 1.8% QoQ.

PropNex said 1Q24 marked the 16th consecutive quarterly growth in the HDB Resale Price Index and the most robust price increase since the 2.3% QoQ growth in 4Q22.

"In Q1 2024, the average resale price in both mature and non-mature towns rose on higher sales volume. The average price of resale flats in mature estate rose by 3.4% QOQ to about $633,500 while that of resale flats in non-mature towns grew by 1.6% QOQ to almost $565,600, according to transaction data," PropNex.

"By flat types, the increase in average resale price in Q1 2024 was led by executive flats, with a 1.8% QoQ increase to $854,230, followed by 3-room and 2-room resale flats, which posted a 1.7% QoQ and 1.6% QoQ growth, respectively, during the quarter. Meanwhile, 4-room and 5-room resale flats saw their average resale price rise by 1.3% QoQ and 1.5% QoQ, respectively, in 1Q24," PropNex reported.

In addition to rising prices, experts also predict that the HDB resale market will experience an increase in volume over the coming months.

"HDB will launch another BTO exercise with around 6,830 flats in Jun 2024. This will be the last batch of BTO flats under the existing flat classification of mature and non-mature estates. There may be slightly more applicants as it is unclear where the Plus category may be applied to flats in non-mature estates," Huttons said.
 
"Applicants unsuccessful in the sole Sale of Balance (SBF) exercise in 2024 may return to the resale market in the coming months. Existing resale flats in prime locations with longer leases are expected to see continued interest as they do not come with restrictions on subsequent resale," Huttons added.

In 2024, Huttons expects volume to hover around 25,000 to 27,000.