HDB resale prices expected to keep rising in 2025

Prospective home buyers can expect the prices of Housing Board resale flats to keep inching upwards in 2025, as fewer flats will reach their minimum occupation period (MOP) this year than in each year of the past decade.

A report released by property firm OrangeTee Group on Feb 11 predicted that resale flat prices will have risen for 23 consecutive quarters by the end of 2025, barring any additional property cooling measures or major changes to the economy.

This will surpass the previous record growth streak of 20 consecutive quarters from the fourth quarter of 1991 to the fourth quarter of 1996.

Analysts estimate that resale prices will rise between 4 per cent and 6 per cent in 2025, lower than the 9.7 per cent price growth in 2024.

In its report, OrangeTee noted that 6,974 flats are slated to reach their MOP in 2025, which allows them to be sold on the resale market.

"This is the lowest MOP number in 11 years, with the previous low occurring in 2014 with 5,301 units," said the property firm.

OrangeTee's analysts added that 2025 will be the third consecutive year in which the number of flats reaching the five-year MOP will fall, after 30,920 units reached their MOP in 2022.

Noting that the fall in number of available resale units will most likely create scarcity in the housing market, the report said: "In this environment, demand may continue to outstrip supply, particularly in the context of forecast steady GDP growth and employment outlook, both of which are likely to drive more individuals and families to seek new housing."

Without any market intervention, resale prices "are projected to rise further this year by 4 per cent to 6 per cent, averaging around 1 per cent to 1.5 per cent growth per quarter", said OrangeTee.

The projected 23-quarter growth streak translates to a projected cumulative increase of around 58 per cent from resale prices in the first quarter of 2020, said the report.

It added that this translates to an average increase of 2.5 per cent per quarter, which is "still smaller than what we have seen in the 1990s".

Back then, resale prices had risen 294.4 per cent over 20 quarters, translating to an average price growth per quarter of about 14.7 per cent.

As at the fourth quarter of 2024, resale prices have risen for 19 consecutive quarters since the first quarter of 2020, with a cumulative price growth of 50.5 per cent, averaging a growth rate of 2.7 per cent per quarter.

During this period, prices grew by 12.7 per cent in 2021, 10.4 per cent in 2022, 4.9 per cent in 2023 and 9.7 per cent in 2024.

On its relatively slower predicted growth rate of 4 per cent to 6 per cent in 2025, OrangeTee said plans for more Build-To-Order (BTO) flats to be launched will help to absorb resale demand.

Some 50,000 BTO flats are slated to be launched between 2025 and 2027, with the first 5,032 launched in Feb 10, and a further estimated 5,400 expected to be launched in July.

In addition, 5,590 flats were launched on Feb 10 in the largest Sale of Balance Flats exercise to date.