The resale volume of HDB resale flats declined in November 2024, possibly affected by the August 2024 cooling measures and the large supply of build-to-order (BTO) flats launched for sale by the HDB in October. More than 8,500 BTO flats were launched in the sales exercise, and they drew over 35,600 flat applicants - the strongest turnout since August 2022.

Cooling measures and large BTO supply puts drag on resale market

In August 2024, the government implemented another round of cooling measures, namely the reduction in loan-to-value (LTV) limit from 80% to 75% for housing loans granted by the HDB. This policy revision is mainly aimed at cooling the HDB resale segment, particularly at the top end of the market where the number of million-dollar flats has risen sharply.

The LTV cut and BTO launch, as well as the slower market activity due to the year-end seasonal lull have likely combined to put a drag on the resale volume in November. Notably, the HDB had launched over 8,500 new flats in its biggest BTO exercise since November 2022. Applicants were likely attracted to the BTO projects as many of them are conveniently located near an MRT station. In addition, first-timer singles are also able to apply for a 2-room Flexi flat in any location, while some projects with shorter waiting times of around two years also caught the eye of flat applicants. Given the strong interest garnered by the BTO launch in October, it may be fair to say that the sales exercise could have siphoned some demand from the resale market.

According to transaction data, 1,945 flats were resold in November, down by 9.5% from the 2,149 resale flats that changed hands in October. Of note, this is the slowest monthly HDB resale volume since 1,974 units were transacted in September 2023, and the first time since then that monthly sales dipped below the 2,000-unit mark. On a year-on-year basis, the resale flat volume was down by 8.6% from 2,129 units in November 2023 (see Chart 1).

Chart 1: HDB resale flat transaction volume and average resale price by month

Resale prices stable

Despite the weaker sales volume, the average resale price of HDB flats held up - inching up in November from October by 0.9% to around $634,500. Meanwhile, the average resale price rose by 9.2% YOY from around $581,300 in November 2023 (see Chart 1).

By flat types, the average price of 3-room and 5-room resale flats posted a 3% and 1.5% MOM increase from October to November respectively (see Table 1), while that of 4-room and executive resale flats fell by 1.9% and 3.7% MOM over the same period. The price decline in those two flat types, could potentially be contributed by the fewer million-dollar flats transacted in November, as well as lower sales volume of such flats sold. In November, there were 121 executive flats resold - the lowest monthly sales of such flats in 2024.

To this end, the average resale prices of executive flats in both mature and non-mature towns fell in November, moderating by 4.3% MOM and 2.7% MOM respectively, based on the sales data (see Table 2). Meanwhile, 4-room resale flats in non-mature towns also posted a decline in the average transacted price in November, reflecting a 1.8% MOM dip.

The segment that saw a sharper price growth in November was 3-room flats in mature towns where the average price jumped by 4.8% MOM. This could be supported by a slightly larger proportion of transactions for 3-room resale flats in mature estates being sold for $500,000 or more in November (26%) compared with October (18%). This is followed by 4-room resale flats in mature estates which booked a 1.8% MOM increase in the average price - propped up partly by the million-dollar flat transactions.

Table 1: Average transacted HDB resale flat prices by Flat Type in last six months

Table 2: Average transacted HDB resale flat prices in Mature and Non-mature towns

Chart 2: Proportion of HDB resale transactions by price range

The priciest flat resold in mature estates in November was a 5-room flat at Dover Gardens in Dover Crescent (Queenstown) which fetched $1.55 million, while the most expensive flat resold in non-mature towns during the month was for a 5-room flat in Compassvale Drive in Sengkang which went for $1.05 million.

Based on transaction data, the proportion of flats resold for less than $500,000 fell to about 23.4% from the 26.8% in the previous month (see Chart 2), while the portion of flats transacted at a higher price range of $500,000 to just below $1 million accounted for 72.1% of November's sales - up from 68.4% in October. Meanwhile, million-dollar resale flats made up 4.5% of the transactions in November, marginally down from the 4.8% proportion in October.

Easing number of million-dollar flats

The number of million-dollar resale flats sold in November slipped to 87 units from 103 units in October (see Chart 3), marking the lowest such sales in six months since 73 such units were transacted in May 2024. In the first 11 months of 2024, there were 940 flats that have been resold for at least $1 million - already doubling the record 469 such units resold in the whole of 2023.

The pullback in million-dollar resale flat volume in November could indicate that the August-2024 cut in LTV for HDB home loans is effective in taking some heat from the top-end of the resale market.

Of the 87 units of million-dollar resale flats transacted in November, six are located in non-mature towns, namely in Bukit Panjang, Hougang, Woodlands, and Sengkang. The rest of the units are in mature estates, led by Toa Payoh with 20 such deals, followed by 10 units each in Kallang Whampoa and Bukit Merah, and eight units in Queenstown.

In Toa Payoh, nine of the 20 units of million-dollar flats resold are located at the Alkaff Vista project in Bidadari Park Drive, which recently met their 5-year minimum occupation period (MOP). Since August 2024, there have been 21 resale flats that were sold at Alkaff Vista, with 19 of them fetching at least $1 million each. The transacted prices of 4-room resale flats at Alkaff Vista ranged from $937,500 to $1.17 million, while the 5-room flats at the project were resold for $1.19 million to $1.31 million.

Overall, the 87 units of million-dollar flats sold in November comprised 38 units of 5-room flats - buoyed by transactions at Toa Payoh and Bishan - 35 units of 4-room flats, and 13 executive flats. The 13 units of million-dollar executive flats sold in November was substantially lower than the 29 units sold in October, and it is also among the lowest monthly tally of such flats resold this year - matching the 13 executive flats transacted in February.

Chart 3: Number of resale flats sold for at least $1 million

The top resale transaction in November was a 5-room flat at Dover Gardens which was resold for $1.55 million. The 124-sq m unit is located on a high floor ranging between the 37th and 39th storey (see Table 3). This is a new record high resale price for a 5-room flat transacted in the project - besting the previous record of $1.25 million garnered by another 5-room unit within the same block in April this year.

Although the number of million-dollar resale flats has climbed steadily, they still accounted for a small proportion of the total resale flat volume. In the first 11 months of 2024, the 940 units sold represent about 3.7% of the total resale flat transactions, based on sales data. PropNex expects the number of million-dollar resale flats sold in 2024 may hit 1,000 units.

Table 3: Top 10 HDB resale flats sold in November 2024 by Transacted Price