Reasons for the Surge in HDB Resale Prices in 2024: Market Overview

By Wally Wong Reasons for the Surge in HDB Resale Prices in 2024: Market Overview | Updated 22 May 2024 4 minutes


At a glance

In 2023, Singapore’s resale HDB flat experienced a notable price surge. Key drivers include the dynamics of the private property market, with increased prices prompting buyers to turn to HDB resale flats. Additionally, government policies such as changes in the CPF Housing grants and the introduction of the Voluntary Early Redevelopment Scheme (VERS) have influenced resale prices. Prime locations of flats and the country’s stable economy further buoy the HDB market. Despite the rapid growth, recent data suggest a possible moderation in HDB resale price growth. Various factors intricately influence the market, and despite potential economic challenges, HDB resale remains a preferred choice for many in the foreseeable future.


Singapore’s HDB flats have experienced an unprecedented price rise in 2023, affecting most of the nation’s residents who reside in these homes. Through examining all the factors, homeowners and aspiring buyers can be better informed. Let’s look closer at why HDB prices have skyrocketed this year.

Why the Hike in HDB Prices?

Unfortunately, by the end of Q1 2023, HDB’s resale price index (RPI) saw a record increase. Despite the rise in interest rates, the HDB resale market has been robust, marking its 12th consecutive quarterly growth since 2020.

Critical Drivers for HDB Prices

Here are the main drivers for why HDB resale flat prices are increasing:

1. Private property market dynamics

Increased prices on private properties and disruptions in Order (BTO) projects due to the COVID-19 pandemic have shifted buyers’ focus to HDB resale flats.

Due to Singapore’s reputation as a secure investment destination, domestic and international investors are attracted to the potential of private residential properties. In Q1 2023, the private residential property index rose to 194.8 from 188.6 in Q4 2022, marking a 3.2% uptick. This sharp increase contrasts with the modest 0.4% growth in the prior quarter.

Additionally, the transaction volume of private properties reached its highest in nearly a decade. This trend has driven many potential buyers towards the HDB resale market, resulting in an uptick in resale prices.

resdiential property price index

Singapore Private Residential Property Price Index

In recent developments, the government’s decision to hike the Additional Buyer’s Stamp Duty (ABSD) in April might have indirectly influenced HDB resale prices. This move raised the transaction cost for those eyeing private properties, making HDB options more appealing. This could have redirected demand towards HDB resale apartments.

A crucial factor is also the impact between supply and demand. In recent years, there has been a lack of HDB resale flats to meet the surging demand, which causes prices to increase. With the COVID-19 pandemic, new Build to Order (BTO) projects have repeatedly been postponed due to logical hurdles and construction delays. Therefore, many potential homeowners, impatient with BTO project uncertainties, are looking towards resale flats instead. First-time home buyers who need a house urgently are also unwilling to wait, increasing the demand for HDB resale units.

2. Rise in HDB Resale Demand from Upgraders and Downgraders

Another reason for HDB resale prices is heightened demand from two groups – the ‘upgraders’ and ‘downgraders’.

‘Upgraders’ are looking for larger flats, usually because of family expansion or the current work-from-home trends. Many of these are newlyweds who do not want to wait for a BTO flat. Some may even hurry to secure bigger units, fearing future price hikes.

Conversely, ‘downgraders’, often older residents, might transition from spacious private homes to more compact HDB flats. This could be due to economic uncertainties and inflation. The high costs of private properties might push more of these ‘downgraders’ to the HDB resale market, especially to less central but more budget-friendly neighbourhoods.

3. More HDB flats completing their MOP

A surge in HDB resale prices is linked to a rise in flats completing their Minimum Occupation Period (MOP). After the 5-year MOP, these flats become eligible for resale, adding to the supply of HDB apartments. Increased supply means more options for buyers, which can influence demand and HDB prices.

Sellers often believe that selling right after MOP fetches the best prices because the flat is newer and has a longer lease duration. Buyers looking for a quality long-term investment are also willing to pay more for these flats, which will increase the price of resale flats.

The HDB’s strict regulations also maintain market stability, preventing prices from fluctuating too much or any speculative sale practices. This control increases buyer confidence, indirectly contributing to the increase in prices.

4. Rising interest in million-dollar transactions

The continuous interest in million-dollar HDB deals coupled with demand is another crucial factor pushing HDB resale prices upward. In Quarter 1 of 2023, 21 four-room HDB flats were sold for over $1 million, almost triple compared to houses sold in 2022 Q1.

One reason is due to the restrictions introduced in September 2022. The 15-month wait-out period limited private homeowners from buying five-rooms or larger apartments, which may have shifted demand from some to buy pricier four-room resale flats. Moreover, demand for larger homes near the city center has also led to more transactions over $1 million, primarily for larger-sized flats in mature estates with limited supply. Many experts predict this trend of million-dollar HDB flats will continue in upcoming years.

5. HDB’s attractive “fixed” interest rates

Another crucial reason HDB resale flats are becoming more expensive is the unchanged interest rates of HDB home loans. With global interest rates rising, HDB’s unchanged concessionary interest rate of 2.6% since 1999 entices buyers. Especially so when recent floating rates for bank loans have exceeded 4%. The favourable rate difference has directed buyers towards HDB resale flats, leading to an increase in prices. Overall, the steady home loan interest rate from HDB positions public housing as a more attractive option in the current market.

6. Influence of adjusted government policies, e.g. CPF Housing grants

Government policy adjustments play a role in the dynamics of HDB resale prices. For instance, analysts point to the increased CPF housing grant amounts(especially for the Enhanced Housing Grant_ benefiting eligible resale flat buyers as a potential catalyst for heightened demand. Specifically, the boost in housing grants for first-time buyers could energise demand, leading to price appreciations for certain flat categories.


Important info

According to the Budget 2023 announcement, the Enhanced Housing Grant(EHG) has been revised upwards. For first-time families looking at four-room or smaller HDB resale flats, the EHG has increased from $50,000 to $80,000. Meanwhile, the grant amount is increased from $40,000 to $50,000 for those eyeing five or larger resale flats.

Industry experts predict these policy changes will make HDB resale flats more attainable. They can increase transaction volume from 26,000 to 28,000, potentially influencing resale price growth of as much as 10%.

20230214 budget 2023 housing grants for first timer families.avif.avif

Additionally, the government’s introduction of the Voluntary Early Redevelopment Scheme (VERS) in 2018 also spurred speculatively buying older estates. The policy allowed homeowners in these estates to sell their flats back to the government, indirectly influencing HDB resale prices.

  1. The allure of prime locations

The location also significantly impacted HDB resale flat prices. Flats in established estates like Ang Mo Kio, Bedok and Queenstown usually fetch higher prices due to their amenities. Flats near MRT stations, schools, and shopping centres are especially sought after, as they offer convenience and are in high demand. The presence of parks, recreation areas and green spaces in a vicinity further enhances a flat’s appeal, influencing its resale price.

  1. Economic confidence fuels the market 

Singapore’s resilient economy is fundamental to the robust HDB resale market. With a stable economy and high job security, residents also feel more confident to invest in properties. This confidence and economic strength underpins the continued rise in HDB resale flat prices. 

Will HDB Prices Decrease in 2023?

The HDB resale price index for Q1 2023 recorded its smaller quarterly rise in the previous ten quarters, spanning 2.5 years.

HDB resale prices in Singapore increased by 10.4% in 2022, a tad slower than the 12.7% uptick in 2021, based on HDB’s preliminary estimates. This data indicates a beginning of moderation in HDB resale price growth. Market experts forecast a 2% and 8% growth for HDB resale prices in 2023. 

The more measured price rise in the first three months of 2023 implies that the newly implemented property cooling measures are taking effect. As Singaporean households grapple with escalating interest rates and inflation, the growth rate of resale home prices is anticipated to be more modest this year. Plus, given the introduction of 23,000 BTO flats slated for 2023, the prices might stabilise as the supply expands. 

Current HDB Home Loan Rates

A snapshot of the latest HDB home loan and refinancing interest rates from banks is provided below:

Fixed Rates (HDB Properties)
Bank Lock In Period 1st Yr Interest
Promotion 3 years 2.88%
OCBC 3 years 2.88%
Promotion 2 years 2.90%
OCBC 3 years 2.90%
OCBC 2 years 2.90%
DBS 2 years 2.90%
Promotion 2 years 2.95%
Standard Chartered 2 years 3.05%
Standard Chartered 2 years 3.10%

*Today's Mortgage Rates - 22 May 2024

Floating Rates (HDB Properties)
Bank Lock In Period 1st Yr Interest
SBI 2 years 3.95%
Maybank 0 year 4.10%
OCBC 2 years 4.15%
Maybank 1 year 4.20%
DBS 0 year 4.20%
DBS 2 years 4.20%
Promotion 2 years 4.25%
Standard Chartered 2 years 4.25%
Maybank 0 year 4.26%
Maybank 1 year 4.26%

*Today's Mortgage Rates - 22 May 2024

In Conclusion?

Many factors influence HDB resale prices in Singapore. These factors interplay and showcase the complexity of property valuation and the HDB resale scene.

As the country’s landscape changes, so will the determinants of HDB resale prices, so that it will be an ongoing discussion inviting much discussion and analysis. We should expect that even as interest rates increase, home prices will not significantly decline in 2023. With or without the cooling measures, the HDB resale sector will remain a favorable option for potential homebuyers.

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