If you haven’t heard by now, there was a record-breaking number of million-dollar HDB transactions in July this year. Here are some key points from a recent report in The Business Times:
Record-breaking million-dollar deals:
120 HDB flats sold for over $1 million in July, a 25% increase from June, with a year-to-date total of 543 million-dollar sales, surpassing 2023’s full-year figure of 470.
Overall market trends:
- HDB resale prices rose 0.6% month-on-month
- Resale volumes surged 39.6% to 3,049 flats
Million-dollar sales breakdown:
- 3.9% of total resale volume
- 47 units from new projects just past their five-year Minimum Occupancy Period (MOP)
- Kallang/Whampoa, Bukit Merah, and Queenstown saw the most million-dollar transactions
Price changes by flat types and locations:
- Mature estates: 0.5% increase
- Non-mature estates: 0.6% increase
- Three-room flats: 0.3% up
- Four-room and executive units: 1.3% up each
- Five-room flats: 0.1% slight decrease
This data indicates a robust HDB resale market with increasing prices and strong demand, particularly in the high-end segment. The trend of million-dollar HDB sales continues to grow, driven partly by newly eligible units from popular projects entering the resale market.
So what does this all mean to the average homeowner? Should we be worried or happy that prices seem to be escalating in such a radical manner?
Home & Decor asked veteran property agent Dan Ho, winner of the Singapore Estate Agents Association’s (SEAA) Real Estate Salesperson GOLD award for five consecutive years since 2020, about the million-dollar wave overtaking Singapore’s public housing.
Q: Let’s talk about the sale of the five-room flat at Skyoasis @ Dawson, which set a new HDB record of $1.7 million. Why was it significant?
A: The flat in question is situated on the 45th floor of Skyoasis @ Dawson, now this sale is significant because it broke the ‘all-time high’ for a HDB flat ever transacted at $1,725,888 (the previous record was held by a five-room flat at City Vue @ Henderson, which fetched $1,588,000 in June 2024 and another five-room flat at 9B Boon Tiong Road at the same price point, both from Bukit Merah.) From this we can tell that the south side of Singapore is a very popular region that buyers are willing to pay top dollar for premium resale flats, this on top of the common knowledge that homes located on higher floors tend to fetch better prices.
This Sky Oasis cluster was a development that was made up by a mix of BTO and SERS replacement flats, and the particular unit sold was the latter. This unique status might had spawned many green-eyed monsters, and there are coffeeshop talk that infers to the sellers ‘striking lottery’ on the significant profits from the sale.
Q: Who are the buyers of such million dollar flats?
A: The identity of these buyers are not public data and agents have the duty of care to clients to not reveal such sensitive information. However, the press release from the transacting agency reported the buyers to be a Singaporean family with young children. We can make some inference as the current MSR (mortgage servicing ratio) is kept at 30% for HDB flats, so we can assume there would be a significant COV (cash over valuation) for such transaction. Thus, we can assume such buyers would have to be cash rich as the purchase will be relying on a low financing ratio.
In September 2022 HDB introduced a 15-month wait out period for private homeowners to purchase a resale flat in the open market after they have sold their property. According the HDB this move is to stabilise the rising HDB prices and moderate demand for HDB resale flats. The countdown for the 15 months wait out ended on January 1, 2024 and we are beginning to see these buyers entering the market again and perhaps having been spooked by the previous cooling measures, they are now more aggressive in securing their ideal home. Minister Desmond Lee mentioned in October 2022 that this 15 month wait out is supposed to be a temporary measure and HDB will review this measure to see if it has it’s intended effect. The all-time high (ATH) record price in October 2022 was $1,380,000 for a 5-room DBSS unit at The Peak @ Toa Payoh. With the steep increase in ATH of almost half million since 2022. HDB might come up with another round of measures soon.
Q: So will it affect the price of my home?
A: I can say for sure certain it definitely will. Immediately after the news broke out, the market was abuzz with euphoria and my exiting clients all came to me to talk about revising their asking prices for their current listing. The selling market is currently on a Fear Of Missing Out (FOMO) mode. Many sellers are also testing the market to break another ATH. Since the launch of the listing service for sellers to put their property on sale on the HDB portal, about 50 listings (5% of total listings) have been removed for unrealistic pricing and mis-information. This verifies the market sentiments as well. HDB’s stand is that the self service listing portal shall not have any asking price 20% above the last transaction. Perhaps the next seller in Skyoasis @ Dawson might ask for $1.9 - 2 million now. The asking price for the ATH transaction record was at $1.838 million.
Q: What is the government doing about this issue?
A: It’s very difficult to use policies to control the invisible hand of the free market, where there will always be an exceptional unit that a willing and financially capable buyer is happy to purchase. From experience, these policies that try to moderate the small percentage of exceptional transactions that make sensational news actually do more harm and disadvantage to the general population. For example, the 15-month wait out period has adversely affected the following profiles of sellers. Private property sellers that genuinely run into financial difficulty and need to sell their property to tide through the financial difficulty are faced with the additional cost of rental to cover the 15 months wait out period before they can purchase a lower cost HDB for their essential housing needs. Couples in estranged marriages going through divorce are also faced with the unnecessary wait out before each of the individual from the pair can purchase their own flat.
It is essential to note that HDB’s stance of providing affordable housing for the public hasn’t changed, and they still continue to ramp up production of BTOs and speed up the construction process. They are actively monitoring the resale market and are swift to tackle such issues whenever they arise.
Q: Why did flats in Kallang Whampoa record the most million-dollar transactions in July?
A: Bukit Merah and Queenstown has traditionally been transacting at slightly above $1 million dollars even when this topic was not on the media’s radar. Furthermore, Kallang-Whampoa’s BTO prices are already quite high (from my straw poll they even reached $700,000+) so it’s natural that when the first owners decide to sell, they would want to set the price slightly above what they bought.
Are you deciding between buying a HDB unit or a condo apartment? Read our comparison here.
About Dan Ho
In his 11th year in the Real Estate Industry, Dan Ho started his career in 2013 after spending the 12 years as a Air Traffic Control Officer with the Republic of Singapore Air Force. Dan espouses the core values from the Singapore Armed Forces and continues to observe them in his real estate practice. Dan’s accolades include being consistently awarded yearly the ‘Top producers in Orangetee’ award since joining the agency in 2016. Dan has also been awarded the SEAA Real Estate Salesperson GOLD award for five consecutive years since 2020.