Buyers with HDB addresses acquiring taste for pricier condos
Condos in prime districts of 1, 2, 4, 9, 10 and 11 acquired by such buyers saw 56% year-on-year jump to 947 in 2017
Sat, May 05, 2018
Lynette Khoo
HDB dwellers appear to be acquiring an appetite for pricier homes in recent years, with a caveats analysis by OrangeTee & Tie showing that the increase was led by luxury home purchases worth at least S$5 million.
It said the proportion of private condos bought by those with HDB addresses in the price range below S$1 million fell from 97 per cent in 2003 to 37 per cent in Q1 2018.
But the proportion of those who bought non-landed homes in the S$1 million to S$1.5 million range soared from 3 per cent in 2003 to 41 per cent in Q1 2018, while the proportion for non-landed homes above S$1.5 million also shot up from 0.2 per cent in 2013 to 22 per cent in Q1 2018.
The most notable spike in the purchase of luxury condos by those with HDB addresses is found in the price range of S$5 million and above, which saw a 214 per cent surge to 22 units in 2017, up from just seven units in 2015.
This is not the highest figure, as 39 such homes were bought by those with HDB addresses in 2007.
Within the prime districts of 1, 2, 4, 9, 10 and 11, the number of non-landed high-end private homes acquired by HDB addressees jumped 56 per cent year on year to 947 in 2017.
This outpaced the overall increase (29 per cent to 8,449) for HDB addressees' total purchases of non-landed private homes last year and the increase in their purchases of mass-market private homes (12 per cent to 4,590) in suburban districts.
The jump in purchases by HDB addressees in the high-end condominium segment is also marginally higher than that of buyers with a private address (55 per cent increase to 3,352 units) in 2017.
All this may reveal an intriguing facet of HDB dwellers - that Singapore's strong economy is creating millionaires at an astonishing pace, and some could be living in HDB flats, said OrangeTee's head of research and consultancy Christine Sun.
"As many luxury properties are still undervalued when compared to their previous peaks, some opportunistic HDB dwellers may see this as the best chance to enter the luxury market," Ms Sun said.
Savills Singapore senior director Alan Cheong reckoned that the HDB market is getting more complex - with the "haves" and "have-nots" co-existing within the HDB population. Under HDB's policy, a flat owner can - after a minimum occupation (MOP) period of five years - buy a private home without selling the flat , but a private home owner cannot buy a new HDB flat without disposing of the private unit before the last 30 months.
"It shows those who are using mortgage servicing ratios and affordability ratios are wrong in their assessments of who can and cannot buy private properties based on income and current residential addresses. The landscape is going to be very complex for policy makers," Mr Cheong added.
But PropNex Realty's head of luxury team Dominic Lee cautioned against reading too much into the data, which uses HDB addressees as a proxy for HDB dwellers. He explained that the address stated in the caveats may not always be the actual address of the buyer, especially if the buyer is a foreigner who does not live here. For instance, one of his clients has been using his relative's HDB address when he buys a private home here.
In Ms Sun's report, well-heeled HDB addressees are also gravitating towards larger high-end homes. The proportion of high-end condos of less than 500 sq ft bought by HDB addressees has dropped to 7 per cent in the first quarter of 2018, compared to 11 per cent in 2013.
Luxury homes bought by those with HDB addresses last year include projects like New Futura, Goodwood Residence, Hilltops, Ardmore Three, The Nassim and Gramercy Park. All these have units above 160 sq m, with some up to 400-550 sq m.
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