As the new year unfolds, Singapore’s Housing and Development Board (HDB) resale prices are showing continued resilience, with the HDB Resale Price Index (RPI) climbing by 1.5% in the first quarter of 2025. This marks a significant achievement, counting the 20th consecutive quarter of positive growth.
Although this quarter’s growth is less robust compared to the 2.6% rise witnessed in the previous quarter, it illustrates persistent demand within the market. However, a decline in transaction volume, with sales dropping by 7.7% year-on-year to 6,392 units, hints at a market that is maneuvering some challenges.
The strength of HDB resale prices can largely be attributed to resilient demand from various demographics, including first-time buyers, second-timers, and permanent residents. Despite facing increased competition from new Build-To-Order (BTO) launches, the limited supply of resale flats is expected to bolster price growth throughout 2025. Forecasted annual growth for HDB resale market is 3% to 6% as the market adjusts to the changing economic landscape. Additionally, a 7.7% YoY drop signifies a notable decrease in transaction volumes, emphasizing the challenges buyers currently face.
Resilient demand from diverse buyers, coupled with limited resale flat supply, supports continued price growth for HDB properties in 2025.
Curiously, a record 348 resale flats sold for at least $1 million in Q1 2025, showcasing a growing appetite for high-value properties. This trend is a clear sign that demand for premium flats remains strong, even amidst a somewhat cooling market.
While the 1.5% price increase underscores buyer interest, it also reflects a tempered momentum, suggesting some resistance towards higher resale prices. This slowdown could be short-lived, as unsuccessful BTO applicants may soon seek refuge in the resale market, potentially reigniting demand in the upcoming quarters.
Despite the seasonal dips typically seen in Q1, analysts remain optimistic, forecasting an annual price growth between 5% to 8% for 2025. Mature towns including Bukit Merah and Toa Payoh continue to lead in high-value transactions, similar to trends observed in previous years.
The underlying tightness of the HDB market, driven by limited supply and sustained buyer interest, paves the way for a bright outlook, where both buyers and sellers can find opportunities, contributing to Singapore’s ever-evolving housing landscape.
