In the first quarter of 2024, the Housing Development Board (HDB) resale market demonstrated a robust performance with a significant uptick in activity. A total of 7,068 HDB resale flats were transacted during this period, marking an 8.0% increase from the previous quarter. This surge is the highest since the third quarter of 2022, driven largely by heightened demand for larger living spaces, particularly executive and 5-room flats, which saw sales increases of 15.3% and 14.2% respectively.

The resale market dynamics were also influenced by the significant portion of transactions involving older flats, with those having lease commencements from 1990 or earlier accounting for 38.8% of total sales. This shift is indicative of a growing buyer preference for more spacious and mature property options.

Notably, the market saw a record number of million-dollar transactions, with 185 flats selling for over a million dollars each—a 39.1% increase from the previous quarter. This rise in high-value sales coincided with the expiration of a 15-month waiting period for private property sellers transitioning to non-subsidized HDB resale flats, introducing a new pool of buyers into the market.

Despite these high-value transactions, the million-dollar transactions still represented a small fraction (2.7%) of the overall market activity, with the majority of transactions occurring in the more modest price range of $400,000 to $600,000, comprising 42.7% of the sales.

In terms of pricing, while there was a notable volume of high-value transactions, the average unit price of these deals saw a decrease, adjusting from $1,409 per square foot in the last quarter of 2023 to $1,320 in this quarter, reflecting a 6.3% quarter-over-quarter moderation. Similarly, the highest unit price also decreased from $913 to $891 per square foot, indicating a downward adjustment in prices despite the growth in transaction volume.

Looking ahead, the market is poised for interesting developments with the June Build-To-Order (BTO) exercise, which will be the last one before a new classification system is implemented in October. This system will categorize flats into Standard, Plus, and Prime, potentially influencing buyer decisions. The introduction of the new Chencharu estate in Yishun during this exercise is expected to attract prospective homeowners, especially those interested in newly developed areas.

However, with the removal of the August BTO exercise, extending the wait until October, and the Sale of Balance Flats (SBF) exercise scheduled only once a year with the next occurrence in February 2025, potential buyers in urgent need of housing might increasingly turn to the resale market. This shift could sustain or increase the demand within the resale sector, particularly among those seeking immediate housing solutions. This period of transition in the public housing landscape offers unique opportunities and challenges, likely influencing the trajectory of the HDB resale market in the upcoming quarters.

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Prepared By:

Mohan Sandrasegeran

Head of Research & Data Analytics