Compared to December 2023, resale prices of HDB flats in Singapore rose by 1.5% in January 2024. Mature and non-mature estate flats increased by 1.1% and 1.5% respectively. Prices increased across all flat types: 3-room flats rose by 1.7%, 4-room flats by 0.9%, 5-room flats by 2.1%, and executive flats by 0.8%.
The transaction volume surged significantly in January 2024, with 2,629 HDB flats changing hands, marking a 30.8% increase compared to December 2023 and a 2.1% increase year-on-year.
The highest transacted price for resale units in January 2024 was for a 5-room flat at The Peak @ Toa Payoh, fetching SGD 1,568,888, making it the most expensive HDB flat in Singapore currently. In non-mature estates, an executive flat in Punggol transacted at the highest price of SGD 1,100,888.
Internet
Analysts predict that by the end of 2024, Singapore may see 500 HDB flats sold at prices of USD 1 million or higher, with Sengkang and Sembawang potentially witnessing their first million-dollar transactions. This growth trend is attributed to increased owner expectations and policy changes affecting unit classification.
The surge in million-dollar HDB flat sales is driven by various factors that have reshaped the landscape of the Singapore real estate market.
Firstly, the reduction in the frequency of BTO sales exercises has led to a decrease in the supply of new HDB flats available for purchase. With fewer opportunities to acquire new-build properties, buyers are turning to the resale market for viable housing options. Secondly, the reduced supply of BTO units has intensified competition among buyers, prompting some to turn to the resale market where they have more choices.
Furthermore, the continued demand from couples and families for immediate housing solutions has also driven the growth of the resale market. Despite changing market conditions, the need for stable housing for families persists. This sustained demand contributes to the resilience of the resale market, with buyers actively seeking properties that meet their specific needs.
Internet
However, buyers have become more cautious in their purchasing decisions. Despite price increases, buyers are unwilling to pay excessively high prices and Cash-Over-Valuation (COV) unless there are specific premium attributes present. This cautious approach reflects buyers' concerns about investment value, as they seek to ensure that their investments are worthwhile in the current market environment. As a result, the number of buyers opting for COV has decreased significantly, with only 15% of buyers choosing COV, a 30% decrease compared to the previous year.
Future forecasts indicate that price growth in the HDB resale market in 2024 will be more moderate, influenced by various economic factors. Expected interest rate hikes may curb further price increases, and higher borrowing costs may limit buyers' purchasing power. Additionally, the higher costs associated with upgrading homes may also exert pressure on price growth, as sellers may adjust their pricing expectations to reflect increased costs.
In summary, the Singapore real estate market experienced price increases and increased transaction volumes in January 2024. This change is mainly driven by reduced supply and sustained demand. However, buyers are more cautious in their purchasing decisions, sensitive to prices, and keen on ensuring value for their investments. With changes in economic factors, future price growth is expected to be more moderate.
