HDB to launch largest Sale of Balance Flats exercise in February 2025 with over 5,500 units on offer

SINGAPORE: More than 5,500 Sale of Balance Flats (SBF) units will be offered in February 2025, the Housing and Development Board (HDB) said on Friday (Oct 25).
This represents the largest SBF exercise, according to HDB, with about four in 10 to be completed units, while the remaining units will be completed progressively from 2025 to 2028.
There will be more than 10,000 new flats for sale next February, including about 5,000 Build-to-Order (BTO) flats in Kallang-Whampoa, Queenstown, Woodlands and Yishun.
More details on the SBF and BTO flats on offer will be shared when the sales exercise is launched.
The prices of HDB resale flats rose 2.7 per cent in the third quarter of 2024, an increase from the 2.3 per cent rise seen in the previous quarter. 
The Resale Price Index (RPI), which reflects general price movements in the resale market, was 192.9 for the third quarter, up from 187.9 in the previous quarter, according to data released by HDB.
Resale transactions also rose by 10.7 per cent, from 7,352 cases in Q2 to 8,142 cases in Q3.
The increase in the third-quarter resale prices and volume was “driven by a strong broad-based demand, as well as some supply tightness in the market with fewer new flats meeting the minimum occupation period (MOP) in 2024 as compared to 2023”, said HDB.
The number of resale transactions in the third quarter of 2024 was also 21.6 per cent higher compared to the same period in 2023.
HDB added that Q3 resale transactions that have surpassed the million-dollar mark continued to make up a small proportion of total resale transactions.
Ms Christine Sun, chief researcher and strategist at OrangeTee, noted the 2.7 per cent figure in the third quarter of 2024 represented the fastest growth rate in prices since the second quarter of 2022, when prices rose by 2.8 per cent.
“The recent escalation in housing prices can be attributed to the tight housing supply. The number of flats obtaining the MOP dropped substantially by nearly 50 per cent, from 53,902 units in 2021 and 2022 to 27,501 units from 2023 to 2024,” she said.
SRI’s head of research and data analytics Mohan Sandrasegeran largely attributed the uptick in Q3 resale prices to a growing proportion of transactions involving larger flat types, particularly 4-room and 5-room flats.
Noting a steady rise in demand for such flats, he said: “As buyers increasingly favoured these larger units, their higher resale values likely played a significant role in pushing up overall market prices.”
Growing demand for newer flats has also contributed to the overall price increase, Mr Sandrasegeran said.
“Flats with leases commencing from 2013 onwards have seen higher price gains due to their newer age and better condition, which continue to command a price premium,” he said.
“The combined effect of increased demand for larger homes and the rising value of newer flats boosted resale prices in 3Q 2024.” 
On the 8,142 resale transaction cases recorded in the third quarter of 2024, Ms Sun noted that “this is the highest quarterly sales since 8,433 units were sold in Q3 2021”.
“As private property prices remain elevated, the increased demand could be driven by more people upgrading within the same housing segment, from smaller resale flats to larger ones,” she added.
“More private home downgraders may have also opted to buy HDB resale flats for their affordability.”
Mr Eugene Lim, key executive officer at ERA Singapore, said the increase in transaction volume was “likely driven by some buyers shifting to the resale HDB market”.
These buyers include unsuccessful June BTO applicants, those seeking centrally located flats without new restrictions and some HDB upgraders priced out of the private market, he said.
“In addition, the reclassification of BTO flats has introduced new resale restrictions, which may have discouraged some homebuyers from purchasing a Prime or Plus BTO flat. These buyers may have chosen to enter the resale market instead,” Mr Lim added.
Approved rental applications of HDB flats dropped by 4.6 per cent from 9,554 cases in the second quarter of 2024 to 9,118 cases in the third quarter.
The number of approved applications was also down 7.5 per cent compared to the same period in 2023.
There were 59,178 HDB flats rented out at the end of the third quarter of 2024, HDB said, adding that this was an increase of 1 per cent over the previous quarter.
Ms Sun said that the third-quarter rental drop was “within expectation, similar to the downtrend observed in previous years”.
“Rental activities usually taper off in the second half of the year, especially during the year-end holidays,” she said.
“HDB rental demand may face some pressure as more tenants shift to the condo market, with private rents becoming more attractive.”
HDB noted that the increase in the third-quarter resale prices and volume in 2024 “largely reflects” the market conditions before the lowering of the loan-to-value limit for HDB loans from 80 per cent to 75 per cent in August.
This was the fourth set of property cooling measures since December 2021 when the LTV for HDB loans was lowered from 90 per cent to 85 per cent, reducing the maximum amount that home buyers can borrow from HDB.
“The government will continue to monitor the property market closely and adjust its policies as necessary to promote a stable and sustainable property market,” said HDB.
“Meanwhile, households are strongly advised to exercise prudence in their property purchases as the property market moves in cycles and those who buy high will be hit harder when prices eventually come down.”
While housing demand may drop in the final quarter of 2024 due to the year-end holidays and October’s BTO exercise, Ms Sun said that prices of resale flats might stay elevated as the supply of MOP flats will remain tight.
“Homeowners staying near future Prime and Plus flats may raise their asking prices as their flats entail a shorter MOP and fewer resale restrictions compared to new Plus or Prime flats,” she added.
The year-end holidays could lead to a moderation in resale activity, according to Mr Sandrasegeran, as prospective buyers and sellers take a pause during the festive period.
Mr Lim expressed similar sentiments, adding: “With families typically travelling during the festive season, the resale HDB market is likely to slow in 4Q 2024.
“Coupled with October’s strong BTO launch, which drew over 35,000 applicants, we expect to see the year closing out with moderate demand.”
However, Mr Sandrasegeran anticipates that demand will remain high, with sustained buyer interest, given the limited availability of newer flats in the resale market.
“This positive outlook is supported by robust market fundamentals, though buyers are encouraged to be prudent, balancing the evolving market opportunities with a focus on long-term financial sustainability,” he said.