HDB resale prices up 1.7%; million-dollar flats surge 32.8% q-o-q in 1Q2024

Toa Payoh is the HDB town with the most million-dollar flats in 1Q2024 (Photo: Samuel Isaac Chua/EdgeProp Singapore)

According to HDB flash estimates released on April 1, the HDB resale price index rose 1.7% in 1Q2024, up from 1.1% growth in 4Q2023. It is the highest quarterly gain since 4Q2022 (up 2.3%q-o-q), says Wong Siew Ying, head of research and content, PropNex Realty.

Wong sees the price growth supported by several factors, including healthy resale flat demand, a higher number of flats resold for at least $1 million, a slightly larger proportion of flats sold at a higher price range, as well as a steady proportion of relatively newer resale flats sold in the quarter which supported prices.

HDB resale transaction volume rose to 6,928 in the three months from January to March 2024, up 5.5% y-o-y compared to the 6,567 cases seen in 1Q2023.

Christine Sun, chief researcher and strategist at OrangeTee Group says it's "uncommon" for sales in the first quarter of the year to exceed the previous quarter's, based on historical transactions comparing 1Q and 4Q of the preceding year from 2010 to 2022.

Sun attributes traditionally slower sales in the first quarter of most years to the Chinese New Year festivities and the March school holidays. She reckons the increase in sales in 1Q2024 is believed to be driven by more first-time buyers shifting to the HDB resale market.

The surge is also driven by homeowners downsizing from private property to HDB resale flats last quarter. Sun notes that January 2024 marks the 16th month since the September 2022 property cooling measures, when a mandatory 15-month waiting period was implemented for private homeowners who want to downgrade to an HDB resale flat.

Source: PropNex Research

Lee Sze Teck, senior director of data analytics at Huttons Asia, says the trend of private homeowners buying resale HDB flats may account for the disproportionately higher demand for larger units relative to other unit types.

This is reflected in the transaction volume for five-room and executive/multi-generation flats, which rose by 9.6% and 10.6%, respectively, compared to four-room units, which saw a 0.9% drop, and three-room units, which saw a 1.5% drop. "The stronger demand for five-room and larger flats and the record number of million-dollar flats in 1Q2024 pushed up the overall prices of resale flats," says Hutton's Lee.

According to data.gov.sg, 185 flats sold for at least $1 million in 1Q2024, rising for the fifth straight quarter. It marks a 32.8% increase q-o-q and a 72.8% increase y-o-y.

Five-room flats made up 41.1% of the 185 million-dollar deals, notes Mohan Sandrasegeran, head of research and data analytics at SRI.

Five-room flats made up 41.1% of the 185 million-dollar deals, says SRI (Photo: Samuel Isaac Chua/EdgeProp Singapore)

The four HDB towns with the most million-dollar flats in 1Q2024 were Toa Payoh (26 transactions), Kallang/Whampoa (22 transactions), and a tie between Bukit Merah and Queenstown with 20 resales each.

SRI’s Sandrasegeran is of the view that Sengkang could be the next town to break the million-dollar mark. He points to a recent transaction of a five-room flat at Blk 216A Compassvale Drive for $968,000 in March as an indication of the potential rise in property value in Sengkang.

OrangeTee's Sun says the reduction in the number of built-to-order (BTO) flats and the sale of balance flats (SBF) could be another factor driving up resale demand.

HDB reduced the number of BTO sales exercises to three from four in the previous years. The sale of balance flats (SBF) exercises saw a similar reduction to just one - from twice yearly.

The next BTO launch in June is expected to release 6,800 new flats in mature estates such as Jurong East (pictured), Kallang/Whampoa, Queenstown and Tampines (Photo: Samuel Isaac Chua/EdgeProp Singapore)

The next BTO exercise is in June. HDB is expected to release 6,800 new flats in Jurong East, Kallang/Whampoa, Queenstown, Tampines, Woodlands, and Yishun.

Eugene Lim, ERA's key executive officer, anticipates that the June BTO exercise could draw demand away from the resale market. He attributes the increase in demand to the emphasis on mature estates in the June BTO launch, which is also the final launch before the reclassification of flats to Prime, Plus, and Standard takes effect.

Huttons' Lee expects HDB resale prices to rise by a modest 3% to 5% in 2024 and transaction volume to be in the range of 25,000 to 27,000 flats.

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