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Commentary: As some HDB flat owners test appetite beyond million-dollar price tags, how much higher can the resale market go?

Some HDB owners are testing buyers’ appetite with a S$1.5 million price tag for resale flats. Will anyone bite?

Commentary: As some HDB flat owners test appetite beyond million-dollar price tags, how much higher can the resale market go?
File photo. A 5-room HDB flat at SkyTerrace @ Dawson was sold for S$1.418 million last year, the highest price transacted to date. (Photo: Facebook/HDB)

SINGAPORE: In many countries, public housing is often associated with affordable housing for low-income households who would otherwise have to live in undesirable and often overcrowded conditions. That was the objective of the Housing Development Board (HDB) in the 1960s as Singapore faced a housing crisis with many people living in unhygienic squatter settlements.   

While Singapore has primarily solved the housing crisis with HDB flats now home to 80 per cent of Singapore’s population, affordability and accessibility have come to the forefront of discussion among policymakers and analysts amid a rise in the number of million-dollar resale flats in recent years.  

While it might have seemed unfathomable to most before COVID-19 to pay S$1 million for a flat, more buyers have been willing to shell out for such flats over the past three years.

Pre-pandemic, about 20 million-dollar HDB flats were sold each quarter from 2017 to 2019, with fewer breaching S$1.1 million. Most of these units were five-room HDB flats or Executive units in locations close to the city, such as Bishan, Toa Payoh, Cantonment Road or the Commonwealth area.

The number of million-dollar deals started to increase in the third quarter of 2020, hitting a peak of 111 units in the third quarter of 2022. In the same quarter, an owner sold his five-room HDB flat at SkyTerrace @ Dawson for S$1.418 million, which remains the highest price transacted.

In total last year, 370 resale flats sold for at least S$1 million, up from 259 flats in 2021.

LISTEN: Can Singapore's red-hot property market be cooled?


The surge in sales was due to a confluence of reasons. Due to remote working and the experience of full home-based learning during the pandemic, more people have come to value their privacy and personal space.

In a study by PropertyGuru released in September last year, 36 per cent of Singaporeans said they were looking to purchase a new property in the next two years due to the need for more personal space in the places they were living in then.

While young families sought more space and larger homes, singles shopped for smaller properties, showed PropertyGuru’s Consumer Sentiment Study in the second half of 2022. Correspondingly, the property market saw a rise in resale transactions across the board, both in private and public housing.

As housing demand rose, so did property prices. Pandemic-led construction delays exacerbated the situation, pushing demand and property prices onto an upward trajectory.

With home prices higher amid a rising interest rate environment, the costs of acquisition of homes became more expensive.

In 2022, the average floor area for non-landed homes transacted below S$1.5 million was less than 1,000 sq ft. With the average floor area of five-room flats coming in at about 1,265 sq ft, it is not surprising that such units, especially if they are located in prime districts, are appealing even if they do cost S$1 million.

There is also demand from private home buyers seeking to cash out from their condominiums and move to HDB flats, especially if they are heavily leveraged. The situation is aggravated by the growing unwillingness of HDB flat owners to lower their sale and rental prices as the costs of moving to a new home have also gone up for them.


Recently, flat owners have begun testing the market’s appetite by listing their properties at S$1.5 million or higher. For example, a five-bedroom flat at Boon Tiong Road in Bukit Merah is being listed for S$1.6 million. According to the listing, the owners spent S$150,000 to renovate the “very high floor” unit, which was built in 2014.  

There are also several S$1.5 million listings for units in Bishan and Kim Tian Road. Are such listings an anomaly or a trend to stay?

According to the PropertyGuru Property Market Report in the first quarter of 2023, the asking prices in HDB resale flat listings have increased for 17 consecutive quarters since the fourth quarter of 2018. The median per square foot asking price for HDB flats rose 5.7 per cent year-on-year.

The number of resale HDB listings with S$1.5 million price tags started increasing in 2021, likely encouraged by the sale of S$1.4 million units. However, it is important to keep in mind that while there have been sporadic listings of HDB flats at S$1.5 million, none have been transacted so far.

There appears to be resistance to this price point, and the jury is still out on if and when Singapore will have its first HDB resale deal at S$1.5 million.

The forces supporting the sale of million-dollar flats are also subsiding. HDB is launching 23,000 Build-To-Order (BTO) flats this year, with some in mature estates. This is expected to result in more first-time home buyers diverting their attention to the new BTO flats.

Second, higher interest rates and the uncertain economic outlook may impact buyers’ budgets, and they may seek flats of lower quantum. Additionally, the new 15-month wait-out period for private home owners buying HDB resale flats is likely to also affect demand.

Given the government cooling measures and the new slew of measures introduced during Budget 2023 to help first-timer HDB applicants, it may warrant further monitoring of the market before revising or implementing new policies.

While it is important to maintain housing affordability for future generations, it would be prudent to ensure that HDB flat prices continue to rise sustainably in tandem with economic fundamentals.

Dr Tan Tee Khoon is Country Manager, Singapore at PropertyGuru, and Dr Lee Nai Jia is Head of Real Estate Intelligence, Data and Software Solutions at PropertyGuru Group.

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Source: CNA/aj


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