Softer price increases in new private homes, resale HDB flats seen next year

HDB resale price growth will likely slow to 4-5% in 2024.

Prices of new homes across the city-state are projected to continue to rise in 2024, albeit at a slower pace of around 3% to 4% as cooling measures bite and new supply swells, PropNex Realty said in a report. 

PropNex said private home prices might be nearing its peak, estimating growth to slow down next year from the projected 4% to 5% increase for full-year 2023, and much lower than the 8.6% surge seen in 2022.

Home prices have already risen by 3.9% in the first nine months of this year, with 6,290 units transacted as of 26 November.

Private residential sales are projected to fall to around 6,500 to 7,000 this year from last year's 7,099 tally, before inching back up to 7,000 to 7,500 range next year.

“Three rounds of property cooling measures from December 2021 have helped to slow the momentum of price growth in both the private and public housing segments,” it said.

In the public housing segment, PropNex estimated resale prices of HDB flats to grow by 5% for the entire year of 2023, before moderating to a growth between 4% to 5% in 2024. 

The projected growth rate for next year could be the slowing price increase in four years or since the height of the pandemic in 2020, when costs of resale homes rose by 5%.

READ MORE: Residential property prices fluctuate in 2023

The property agency said HDB resale volume will remain steady at 26,000 to 27,000 next year, around the same level as this year and slightly lower than last year’s 27,896 total.

HDB resale prices have already risen by 3.8% in the first nine months of the year.

“With the significant increase in BTO flat supply, elevated resale prices, and effects of the September 2021 cooling measures, it could be sometime before the market repeats the feat of the robust sales seen in 2021, where more than 31,000 flats were resold,” PropNex said.