One must have a clear understanding of the regulations and limitations surrounding property ownership in Singapore before investing as a foreigner. Condominiums have fewer restrictions compared to landed properties, making them a more accessible purchase option. However, foreign buyers are still subjected to the Additional Buyer’s Stamp Duty (ABSD) of 20% on their first property purchase. Despite the added expenses, the consistent stability and potential for growth in the Singapore condo market continue to entice foreign investors.
HDB Million-Dollar Resale Flats Reach 1,000 Units Mark in 2024Whilst the latest HDB flash estimates released on Jan 2 have shown a 2.5% q-o-q increase in resale flat prices in 4Q2024, it is slightly slower compared to the 2.7% q-o-q growth seen in the previous quarter. Despite the slight dip, it marks the 19th consecutive quarter of price increases in the HDB resale segment. Furthermore, the flash estimates have revealed a 9.6% price growth in 2024. Although it has doubled the 4.9% growth in 2023, it is still slower than the 10.4% and 12.7% growth recorded in 2022 and 2021 respectively, according to Christine Sun, chief researcher and strategist at OrangeTee Group.On top of that, data.gov.sg’s HDB caveat data that was downloaded on Jan 2 at 8.15am has disclosed a reduced price growth for some flat types as observed by OrangeTee. While the median price of four-room flats witnessed a 2.5% q-o-q increase in 4Q2024, it was considered to be a slower pace compared to the 3.4% growth noted in 3Q2024.Read also: Record-breaking 1,000 HDB resale flats hit $1 mil in 2024Similarly, two-room flats have gone up by 2% q-o-q in 4Q2024, a slower pace compared to the 3.9% growth seen in 3Q2024. Meanwhile, executive flats increased by 1.2% q-o-q in 4Q2024, a drop from 1.7% in the previous quarter. On the other hand, the resale prices for five-room flats have gone up by 3.2% in 4Q2024, a faster pace compared to the 1.2% growth seen in 3Q2024.As observed by OrangeTee’s Sun, the resale volume has declined by 3.6% year-on-year (y-o-y) in 4Q2024, with 6,314 units sold compared to the 6,547 transactions in 4Q2023. It has also dropped by 22.5% quarter-on-quarter (q-o-q) compared to 8,142 units sold in 3Q2024. Sun has attributed the weakened demand in HDB resale transactions to the launch of more than 8,500 new flats in the October Build-to-Order (BTO) exercise, with many units located in highly sought-after locations. With that in mind, demand has shifted away from the resale market towards the BTO market. She also mentioned that the decline in sales was due to the year-end school holidays, as many Singaporeans tend to go abroad during that period, resulting in a decrease in house viewings and sales activities.According to Wong Siew Ying, head of research and content at PropNex, the weaker pace of growth seen in 4Q2024 was also the result of government intervention in August 2024, where the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%. IN Wong’s opinion, the August 2024 measures are currently taking effect in the market. She also reckons that the lower resale volume during the quarter has also had an impact on prices. Resale volume has increased by 8% year-on-year (y-o-y) to 28,876 units in 2024 from 26,735 units in 2023 and 27,896 units in 2022. Despite the increase, it is lower than the all-time high of 31,017 units sold in 2021.On another note, the fall in resale transactions has resulted in yet another decline in million-dollar flat transactions in 4Q2024. It has dropped to 283 units from 331 units seen in 3Q2024. Despite the decrease, the total number of million-dollar transactions has reached a record high of 1,033 units in 2024, according to Sun. She has mentioned that the figure is more than double compared to the 469 million-dollar transactions recorded in the previous year.For 4Q2024, Toa Payoh town has recorded the highest number of million-dollar resale transactions, with 58 transactions. Among the 58 transactions, 20 of them were for four- and five-room units at Alkaff Vista in Bidadari Park Drive, a property that has recently crossed the five-year minimum occupation period (MOP).Eugene Lim, key executive officer of ERA Singapore has mentioned that the new classification of Plus and Prime BTO flats may have driven more homebuyers to seek resales properties located in the central areas. Lim explained that these buyers are not willing to accept the resale restrictions, such as a 10-year MOP, rental restrictions after MOP, subsidy clawback upon resale, and resale income cap on future buyers. OrangeTee has stated that prices in the HDB resale market are expected to continue rising in 2025, although not as quickly as in previous years. Sun also mentioned that in many areas, property prices have reached new highs, which may cause affordability concerns for potential buyers. She also expressed concerns that the constant supply of BTO flats may help to moderate price growth in the secondary market. However, the degree of price stabilisation will depend on the number of BTO flats released by the government in the upcoming years.Read also: ANALYSIS: HDB towns with the highest number of million-dollar dealsAccording to OrangeTee’s projection, HDB resale prices may increase in 2025 but at a slower pace compared to previous years. Lim has anticipated a growth range between 3% and 6%, with an expected resale volume of 26,000 to 27,000 units sold by the end of 2025. Meanwhile, PropNex has expected the HDB resale market to perform well in 2025, supported by the high demand for housing and fewer MOP flats coming on board, which has helped to keep resale prices firm. He has projected that HDB resale prices may witness a rise of 5% to 7% with a resale volume forecast of 29,000 to 30,000 units.On the other hand, Lee Sze Teck, senior director of data analytics at Huttons Asia has mentioned that the supply of BTO flats in 2025 will be reduced to 17,290 units, which is about 12% less than the supply in 2024. As there is no upfront information on the BTO projects with a shorter waiting time, many buyers are shifting towards the resale market. With the interest rates expected to dip lower in 2025, buyers may opt for either an executive condominium (EC) or a resale condo. Wong has also said that the market for million-dollar flats may stabilise within the range of 900 and 1,200 units in 2025. Huttons has further predicted that the resale volume by the end of 2025 will be between 26,000 and 28,000 units, and resale prices are expected to grow at a slower pace of 5% to 8%.