HDB rental prices to grow moderately in 2024 as demand stabilises

For 2024, OrangeTee expects prices to only rise around 3%-5%.

With fewer flats reaching their Minimum Occupation Period (MOP) in 2024 and an increasing number of Build-To-Order (BTO) flats, OrangeTee expects demand to shift from the HDB resale market, which in turn, will affect price growth. 

“Resale flat prices in Singapore are expected to experience moderate growth in 2024 as demand stabilises,” OrangeTee said.

For 2024, OrangeTee expects prices to increase by around 3%-5%,  lower than the expected 4%-5.5% price growth in 2023.

“Sellers will continue to face stiff competition for buyers. The government has launched over 63,000 BTO flats from 2021 to 2023, which has diverted some demand from the resale market. The government may continue to launch an additional 37,000 flats over the next two years to meet the supply target of up to 100,000 flats from 2021 to 2025,” OrangeTee said.

“In the secondary market, the number of flats reaching their five-year MOP decreased by around half, from 31,325 units in 2022 to 15,748 units in 2023. The supply of MOP flats is expected to decline further in 2024 to 13,093 units, leading to fewer flats available for resale,” OrangeTee added. 

The dwindling supply of MOP flats, however, can still help prop up resale prices in some locations.

“Existing stock may continue to shrink as some flat owners may delay their upgrading plans and stay put in their flats due to the high replacement cost of a new home. Buyers who need immediate housing will continue to buy resale flats, especially given the resale grants and subsidies,” OrangeTee said.

“New flats in Plus and Prime locations will be released for sale under the Build-to-Order (BTO) scheme from the second half of 2024. Given that future Plus and Prime flats entail a 10-year MOP, families unable to commit to the longer MOP requirement may shift to the secondary market, leading to an increase in resale demand in certain locations. The increased demand could drive more million-dollar resale transactions in some of these locations,” OrangeTee added.