More $1 million HDB flats is not necessarily a cause for alarm

March 14, 2023

The number of HDB flats selling for $1 million or more in the resale market is on the rise. There were 182 and 259 such transactions in 2020 and 2021 respectively. Last year, the number surged to 558 transactions. At the time of writing, 71 HDB flats sold for at least $1 million this year.

Despite the increase, buyers should not be alarmed because such million-dollar transactions account for only a small percentage of the total number of sale transactions in the HDB resale market. Last year, only 2% of all HDB resale transactions were for at least $1 million, up from 0.9% in 2021 and 0.8% in 2020.

More HDB towns have resale flats that fetched at least $1 million. Last year, 21 out of 26 towns have million-dollar flats, up from 10 towns in 2021 and nine towns in 2020.

The five towns without million-dollar HDB flats last year are Sembawang (North Region), Sengkang (North East Region), Bukit Panjang (West Region), Choa Chu Kang (West Region) and Jurong West (West Region). It is notable that three of these towns are in the west region. As such, buyers with a modest housing budget should look to the five towns or the west region to fulfil their housing need.

Rising tide lifts all boats

Residential property prices have been on the rise, with resale HDB flats being no exception. The average price for resale HDB flats has increased from $539 psf last year to the current $553 psf. It is inevitable that more HDB flats will be sold for $1 million or more, especially if the flat is a large unit, in a central location, or near amenities and public transport nodes.

The silver lining for buyers is that HDB resale prices have risen at a slower pace compared to other housing types. Since 2013, the average price for resale HDB flats has risen by 18%, which is slower than the price growth of 46% for executive condominiums and 32% for leasehold private condominiums.

Additionally, the current average price of $553 psf for resale HDB flats is more than half the average price for executive condominiums ($1,167 psf) and 62.5% lower than the average price for private condominiums ($1,475 psf). With the exception of Build-to-Order (BTO) flats, resale HDB flats are by far the most affordable housing option in Singapore.

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