Is it a Good Deal?: $828,000 for a five-room HDB flat at Kim Tian Road with lease of 79 yearsHDB flash estimates released on Jan 2 revealed a 2.5% q-o-q growth in resale flat prices in 4Q2024, a slight moderation from the 2.7% q-o-q recorded in 3Q2024. This marks the 19th consecutive quarter of price increases in the HDB resale market.In 2024, the HDB resale segment saw a significant increase in prices, with a growth of 9.6%. This is double the 4.9% recorded in 2023. However, it was slightly slower than the 10.4% recorded in 2022, and the 12.7% growth in 2021, according to Christine Sun, chief researcher and strategist at OrangeTee Group.Source: HDBHDB caveat data from data.gov.sg as of 8.15am on Jan 2 showed a deceleration in price growth for certain flat types, notes OrangeTee. For instance, four-room flats saw a q-o-q price increase of only 2.5% in 4Q2024, compared to 3.4% in 3Q2024.Read also: Record-breaking 1,000 HDB resale flats hit $1 mil in 2024Similarly, two-room flats saw a growth of 2% in 4Q2024, a drop from the 3.9% growth recorded in 3Q2024. As for executive flats, the price increase slowed to 1.2% q-o-q in 4Q2024, from 1.7% in the previous quarter.Conversely, five-room flats saw a surge of 3.2% in 4Q2024, exceeding the 1.2% increase reported in 3Q2024.Resale volume declines by 3.6% y-o-y in 4Q2024Resale volume dropped by 3.6% y-o-y to 6,314 units in 4Q2024, from 6,547 transactions in 4Q2023. It also fell 22.5% q-o-q from 8,142 units in 3Q2024.The decline in HDB resale transactions can be attributed to the launch of over 8,500 new flats by HDB during the October Build-to-Order (BTO) exercise, says Sun. These flats are located in prime and desirable areas, making them more attractive to home buyers and diverting demand away from the resale market. The features of these flats, such as scenic views and proximity to MRT stations, likely contributed to this diversion, according to Sun.House viewings and sales activities also tend to decrease during the year-end school holidays, when many Singaporeans travel abroad. As a result, there were fewer transactions in the market during this period.However, Wong Siew Ying, head of research and content at PropNex, believes that the slower pace of growth in 4Q2024 could be attributed to government intervention in August 2024, when the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%.Wong says that the effects of this intervention are still evident in the weaker sales and slower growth in the HDB resale price index in 4Q2024. She also believes that the lower resale volume during the quarter kept prices in check.Read also: ANALYSIS: HDB towns with the highest number of million-dollar dealsThe total resale volume in 2024 was 28,876 units, which was 8% higher than the 26,735 units recorded in 2023, and 27,896 units in 2022. However, it was still lower than the peak of 31,017 units recorded in 2021.Source: PropNex Research, data.gov.sg (*data up to 31 Dec, retrieved on 2 Jan 2025)Fewer million-dollar transactions in 4Q2024As a result of the decrease in resale transactions in 4Q2024, the number of million-dollar flat transactions also declined to 283 units from 331 in 3Q2024. This brought the total number of million-dollar transactions in 2024 to a record high of 1,033 units, according to OrangeTee’s Sun. She points out that this is more than double the 469 transactions recorded in the previous year.Toa Payoh town led the way in million-dollar resale flat deals in 4Q2024, with 58 transactions. Twenty of these were for four- and five-room units at Alkaff Vista in Bidadari Park Drive, which had recently crossed the five-year minimum occupation period (MOP).* Based on caveats and may differ from actual numbers. Source: HDB, Huttons Data Analytics as of 31 Dec 2024″The new classifications of Plus and Prime BTO flats may have led more buyers to seek out HDB resale homes in central locations,” says Eugene Lim, key executive officer of ERA Singapore. “These buyers are unwilling to accept the restrictions that come with resale flats, such as a 10-year MOP, rental restrictions, the potential for subsidy clawback upon resale, and an income cap for future buyers.”HDB resale prices are expected to continue rising in 2025, but at a slower pace than in previous years, says OrangeTee. “Prices in many areas have already reached new highs, causing concerns over affordability among potential buyers,” adds Sun.She also believes that the ongoing supply of BTO flats will help moderate price growth in the secondary market. However, the extent of this stabilisation will depend on the number of BTO flats that the government plans to release in the coming years.Read also: ANALYSIS: BTO or Resale?AdvertisementIn February 2025, HDB will launch the largest Sale of Balance Flats (SBF) exercise, with over 5,500 flats available in different towns, says Lee Sze Teck, senior director of data analytics at Huttons Asia. “Some prospective resale flat buyers have decided to wait and try their luck,” he adds.Price growth and transaction volume expected to moderateERA expects resale prices to grow at a more measured pace in 2025, due to a reduced supply of flats reaching MOP, which has been a key driver of price growth in recent years, notes ERA’s Lim. As such, he expects growth of 3% to 6% in HDB resale prices, with 26,000 to 27,000 resale units changing hands by the end of 2025.PropNex forecasts a positive performance for the HDB resale market in 2025, supported by robust demand for housing and fewer MOP flats entering the market. Hence, Wong believes that prices will remain stable. “Resale flats will continue to attract a strong level of interest from buyers who have more pressing housing needs, as well as those who are unable to secure a BTO flat, or families with a tighter housing budget.”She projects that HDB resale flat prices will rise by 5% to 7% in 2025, driven by a resale volume forecast of 29,000 to 30,000 units.The supply of BTO flats in 2025 is expected to fall to 17,290 units, a 12% decrease from the supply in 2024, says Huttons’ Lee. “Since we do not have advance information about BTO projects with shorter waiting times, buyers will likely turn to the resale market,” he adds.Furthermore, lower interest rates in 2025 could enable buyers to take on larger loan amounts to purchase new homes, says Lee. “Some buyers may set their sights on either an Executive Condominium (EC) or a resale condo.” He also adds that the number of million-dollar flat transactions could stabilise in the range of 900 to 1,200 units in 2025.Huttons estimates that HDB resale flat transactions will reach 26,000 to 28,000 in 2025, and resale flat prices are expected to grow at a slower pace of 5% to 8%.