How many resale HDB flats are near the $1 million mark in 2024?

Authored by Raymond Tiah

Resale HDB flats nearing the $1 million mark are gaining attention as a growing segment of the property market. With the rising value of flats, many buyers are now considering properties priced between $900,000 and $1 million.

A Snapshot of Property Prices

We've witnessed a significant increase in million-dollar flats in recent years, even though they still represent a minority of transactions. Instead, let’s consider the resale flats approaching the $1 million mark but not quite there yet.

How has the number of near million-dollar flats risen over the years?

For the purposes of “near” a million, we're looking at flats with a quantum of between $900,000 and $1 million:

These transactions are still the minority, but are growing rapidly:

• 1,059 transactions is small relative to the overall market; flats priced $900,000 to $1 million make up less than 5% of resale transactions.

• High-value transactions are often highlighted in the news, indicating they're still not the norm.

• The percentage increase in transactions from 2012 to 2013 (40.5%) was greater than from 2023 to 2024 (17%).

• In 2012, only 37 flats sold for over $900,000; now, every HDB town reportedly has at least one such transaction.

• While still rare, high-value transactions appear to be normalizing in the market.

High-value flats seemed more resilient toward the 2014 cooling measures

By 2013, rising resale flat prices led the government to take action, halting the publication of Cash Over Valuation (COV) data and capping the Mortgage Servicing Ratio (MSR) at 30%. These measures significantly impacted the resale market, causing COV rates to plummet. Zero COV transactions became common in the following years, and the market declined for nearly eight years, reviving only after Covid due to a housing supply crunch.

Here are average resale flat prices across all types and towns since the major drop in 2014:

Fewer concerns over lease decay

• Most flats priced at $900,000 and above are older, including maisonettes and jumbo flats, which are no longer built. Their scarcity contributes to higher prices.

• Newer DBSS projects from the 2000s are exceptions, but they were built between 2005 and 2012 and are not considered new.

• Currently, there is little concern about lease decay, which previously affected market sentiment. The post-Covid housing shortage and rising flat prices may have shifted buyer perceptions.

• Speculatively, initiatives like the Lease Buyback Scheme (LBS) and a growing view of flats as homes rather than investments may influence this mindset.

• Older Singaporeans seeking good locations may prioritise living quality over potential financial returns, viewing a 30-year lease as sufficient.

In the short term, Plus and Prime models may support rather than bring down these prices

• In the long run, increased availability of flats in desirable areas may help moderate prices. Restrictions like the 10-year Minimum Occupation Period (MOP) don’t affect true home buyers who plan to live in their homes long-term; thus, higher supply in traditional hot spots remains impactful.

• However, in the short term, the opposite could occur. Resale flat owners in Kallang-Whampoa, Bukit Merah, Queenstown, and other sought-after areas are being pitched that their flats share prime locations without drawbacks like a 10-year MOP, claw back, or eligibility requirements. This rationale allows them to justify higher asking prices, and it’s hard to argue against that logic.