The Housing Development Board (HDB) resale market experienced a notable slowdown in the first quarter of 2025, with transaction volumes falling to their lowest since the second quarter of 2020. According to Huttons, the decline is attributed to a record low number of flats fulfilling the minimum occupation period (MOP) and the largest Sale of Balance Flat (SBF) exercise in February 2025, which offered over 5,500 flats, drawing potential buyers away from the resale market.
Transaction volumes for HDB resale flats dropped by 7.7% year-on-year to 6,392 in Q1 2025. The Executive/Multi-Gen segment saw the most significant decline, followed by the 4-room and 5-room segments. The 4-room flats, being the predominant type built by HDB, faced a substantial drop due to fewer MOP flats available, limiting buyer options.
Despite the slowdown in transactions, prices of HDB resale flats rose by 1.5% in Q1 2025, a smaller increase compared to the 2.6% rise in the previous quarter. This suggests a stabilisation in prices, with 5-room flats seeing a 2.0% increase due to limited supply.
A record number of million-dollar flats were sold in Q1 2025, making up over 5% of the market volume. A total of 339 flats were sold for a million dollars or more, an 18.9% increase from Q4 2024. The average price of these flats rose to $1.13 million, with most located in mature estates like Toa Payoh, Bukit Merah, and Queenstown.
Looking ahead, the HDB resale market is expected to remain tight throughout 2025, with no new Build-To-Order (BTO) or SBF launches in the second quarter. This could lead to increased transaction volumes and potentially higher prices. However, changes in quotas for second-timer families and the Deferred Income Assessment (DIA) may ease some pressure on the market, particularly for 3-room and 4-room flats. Resale transactions are projected to reach between 26,000 and 28,000 for the year, with prices likely to grow at a slower pace of 5% to 8%.
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