More HDB homeowners made the leap to private housing in 2024

More Housing Board flat upgraders made the switch to private housing in 2024 as mortgage rates moderated and resale HDB flat prices grew at a much faster pace than that of private homes.

With buying appetite returning in the fourth quarter of 2024 amid lower interest rates, developers are likely to push ahead with more launches in 2025.

This could have implications for the overall market - in particular the suburban market, which is popular with HDB upgraders - as more than 5,600 new condominiums and executive condominiums (ECs) are expected to be launched in the suburbs in 2025, according to OrangeTee Group.

This would account for around 43 per cent of an estimated 12,973 new units expected to be launched this year, nearly twice the 6,647 units launched in 2024.

The number of HDB upgraders acquiring new and resale private homes and apartments rebounded in 2024, with more preferring to buy resale private properties in the suburbs for space and price, analysts say.

According to PropNex, a total of 5,420 new and resale non-landed private homes were bought by those with HDB addresses in 2024, up 7.1 per cent from 5,060 in 2023. In comparison, the 2023 figure represented a drop of 20.6 per cent from 6,372 transactions in 2022.

Those with private addresses bought a total of 11,043 new and resale non-landed private homes. This was a 5.8 per cent increase from 2023's 10,438, which was down 10.2 per cent from 11,618 in 2022.

Overall transactions were up 12.7 per cent to 18,561 in 2024, from 16,474 in 2023, said PropNex, citing the Urban Redevelopment Authority's (URA) Realis data.

URA Realis data for 2,098 transactions are marked unavailable as at Feb 19. Once this data is updated, PropNex believes that the number of homes bought by those with HDB addresses will increase further.

"Overall, we anticipate that the proportion of homes bought by those with an HDB address in 2024 could be in the region of more than 30 per cent - in line with previous years, PropNex chief executive Ismail Gafoor said.

Trading up may be easier for some HDB upgraders as the growth in resale HDB flat prices has surpassed that of private residential property prices in 2024.

Based on the HDB resale price index, resale flat prices rose by 9.7 per cent cumulatively in 2024, compared with a 4.9 per cent gain in 2023. Private residential property prices grew 3.9 per cent in 2024, compared with a 6.8 per cent jump in 2023.

Based on HDB caveat records, 7,644 resale flats were transacted at or above $700,000 in 2024, up from 5,273 units sold in 2023, and 1,591 transactions recorded in 2019, according to OrangeTee.

Furthermore, the average monthly income of resident-employed HDB households has also increased in recent years - to $13,575 for five-room and executive flats in 2024, up from $11,392 in 2020. Four-room flat resident-employed households earned $10,327 in 2024, up from $8,347 in 2020, according to PropNex.

Significantly, URA data showed that more buyers with HDB addresses bought resale private homes in 2024, noted Ms Christine Sun, OrangeTee's chief researcher and strategist.

Resale private property transactions jumped 19.9 per cent to 4,013 units in 2024, from 3,347 in 2023, while new sale transactions by buyers with HDB addresses fell 16.7 per cent to 1,363 units from 1,636 units over the same period.

Many of these flat owners could have opted for resale condos because these are now cheaper in the light of the widening median price gap between new and resale condos, Ms Sun pointed out.

New sale condos, excluding ECs, were 48.4 per cent pricier than resale condos in 2024, as median new sale prices reached $2,464 per square foot (psf), compared with $1,660 psf for resale condos.

"In January 2025, the price gap widened to 55 per cent, as the median price of new condos hit an all-time high of $2,657 psf, while resale condo prices increased to $1,715 psf," Ms Sun said.

Also fuelling the rise in resale transactions is the increase in the number of condominiums reaching temporary occupation permit in 2023, almost 20,000 units, Ms Sun added.

She noted that in 2024, about 22.8 per cent of private resale homes bought by HDB upgraders were over $2 million each, while 292 units transacted at over $3 million each.

Popular projects among HDB upgraders in 2024 were mainly in the suburbs, including Treasure at Tampines, High Park Residences, Stirling Residences, The Tapestry, Kingsford Waterbay and Parc Botannia.

The rebound will get stronger legs in February as two new suburban launches - the 501-unit Elta in Clementi Avenue 1 and the 1,193-unit Parktown Residence in Tampines - collectively sold 1,367 new units over their Feb 22 launch weekend, surpassing the 1,083 units transacted in January.

Elta, the first new launch in the Clementi area since December 2020, sold around 65 per cent or 326 units, while Parktown surpassed previous take-up rates for integrated projects with 87 per cent or 1,041 new homes sold.