Housing market showing early signs of price growth moderation: Desmond Lee

The housing market is showing early signs of price growth moderation amidst the rising economic uncertainty globally, said National Development Minister Desmond Lee.

This is after flash estimates released by of Housing and Development Board (HDB) and Urban Redevelopment Authority (URA) on Tuesday (April 1) showed slower growth in the price of resale flats and private properties.

Resale prices of HDB flats rose by 1.5 per cent in the first quarter of 2025, making it the slowest growth in the last five quarters

According to HDB's flash estimates, resale prices increased 1.5 per cent in the first quarter, down from the 2.6 per cent hike in the previous quarter and the average quarterly growth of 2.3 per cent in 2024.

On the resale volume in the first quarter of 2025, HDB said that in tandem with slower market conditions, the figure of 6,392 is 7.7 per cent lower than in the same period last year.

In a Facebook post on Tuesday (April 1), Lee said that the slow pace of growth can be attributed to the "sustained supply" of Build-To-Order (BTO) flats, as well as the largest-ever Sale of Balance Flats (SBF) exercise in Feb 2025.

The ministry previously announced that more than 50,000 BTO flats will be launched from 2025 to 2027.

Lee said that there is currently "some supply tightness" in the resale market, with fewer flats reaching the minimum occupation period (MOP), partly due to Covid-19 construction delays.

However, the number of new flats reaching MOP will increase significantly, from 8,000 this year to 13,500 next year, before increasing to 19,500 in 2028.

"This means that more resale flats are entering the market soon, and the supply tightness will ease," he added.

Private property prices also saw slower growth in the first quarter of 2025, according to flash estimates from the Urban Redevelopment Authority (URA).

The increase of 0.6 per cent is lower than the 2.3 per cent growth in the previous quarter, due to as price momentum of non-landed properties easing across all market segments.

The total sale transaction volume declined by 15 per cent on a quarter-on-quarter basis, said URA.

Lee said that the Government has been progressively ramping up the overall private housing supply through the Government Land Sales programme.

The first half of 2025 saw a rise to around 8,500 units, with 5,000 to be released under the Confirmed List.

This is almost 60 per cent higher than the Confirmed List supply from 2021 to 2023, the minister said.

The Government will sustain the Confirmed List supply in the second half of 2025, which includes more executive condominium units, he added.

HDB market expected to be 'resilient': Analysts

Property analysts told AsiaOne that the demand for public housing is expected to remain "resilient" amid the growth of prices.

Christine Sun, chief researcher and strategist at property firm OrangeTee Group, said that the price growth of some flat types slowed from January to March, which contributed to the overall slowdown.

While prices for four-room flats increased by 1.9 per cent, she said that it was slower than the 2.2 per cent in the previous quarter. Similar trends were also found in two-room and five-room flat.

But three-room flats posted a faster growth of 2.2 per cent in the first quarter of 2025, added Sun.

Amid the global economic uncertainties, she said the HDB housing market is likely to be more significantly impacted by domestic policies. 

"The market may be driven by a growing number of Singaporeans upgrading within the same HDB sector, as well as private homeowners opting to downsize to resale flats that offer greater affordability compared to private properties," she said. 

"Generous government subsidies and grants available to specific buyer groups will continue to enhance affordability, making it easier for first-time buyers and low-income households to access the resale market." 

ERA Singapore key executive officer Eugene Lim said that he anticipates a rebound in the resale prices of HDB flats in the next quarter.

This is due to unsuccessful BTO flat applicants returning to the resale market, he added.

"At the same time, the shrinking supply of MOP flats will continue to lend support to prices, especially for newer HDB flats in centrally located and mature estates."

chingshijie@asiaone.com

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