The Surge in Million-Dollar HDB Resale Flats

The Singapore real estate market has taken a dramatic turn in 2024, with over 1,000 HDB resale flats surpassing the $1 million mark, a record-setting milestone that has sparked debate among property experts. As we head toward 2025, forecasts suggest this trend is not merely a market anomaly but may become the new norm.

As reported by ERA Singapore, 1,003 million-dollar resale flats were sold by December 24, 2024, more than doubling the 470 units sold in the previous year. Huttons Asia also noted that by November 2024, 931 transactions of this kind had already occurred, representing about three to four percent of total flat sales. Among these purchases, roughly 60 percent fell in the price range of $1 to $1.1 million.

Record-Breaking Transactions

The record-breaking sales do not stop there; some of the most expensive transactions include a five-room flat on Boon Tiong Road and another on Henderson Road, both sold for $1.58 million in June, followed by a flat at Margaret Drive sold for $1.73 million in July.

The Impact of Inflation and Demand

Experts like Nicholas Mak, chief research officer at Mogul.sg, have likened the trend of million-dollar flats to the rising costs of common food items, suggesting that inflation has become a defining feature of the public housing market in Singapore. Meanwhile, Eugene Lim from ERA Singapore explains the increasing desirability for flats in mature areas such as Toa Payoh and Central, citing their excellent connectivity and local amenities. With limited new development options in these established estates, recently available units are commanding higher prices.

Shifts in Buyer Preferences

The significant rise in private property prices has also steered buyers towards public housing, with many individuals looking to downgrade from private homes willing to pay premiums for HDB resale flats. Notably, Sengkang recorded its first seven-figure HDB resale in April 2024 with a 1,539 sq ft maisonette sold for $1 million, while other areas like Choa Chu Kang, Jurong West, and Sembawang have yet to see such sales.

Government Intervention

The government has tried to temper the market. In August, the Ministry of National Development (MND) adjusted the loan-to-value (LTV) limit for HDB housing loans from 80 percent to 75 percent, a move aimed at encouraging more conservative financial management among buyers. Although experts like Mohan Sandrasegeran from Singapore Realtors Inc. believe this adjustment could have major implications, others like Lee Sze Teck from Huttons Asia think its long-term impact on resale prices will be minimal.

Looking Ahead to 2025

Looking ahead to 2025, the consensus among property analysts is that while million-dollar transactions might constitute a small percentage of overall sales, the total could increase to between 1,200 and 1,400 transactions by the end of the year. Inflation is predicted to ease, potentially encouraging stronger spending behaviors among homebuyers and boosting demand for more expensive flats.

Potential Economic Challenges

However, some experts warn of potential economic challenges in 2025 that could deter real estate purchases, leading to a delay for some buyers. Heikal Shafrudin, co-founder of Herohomes, has suggested that the government might need to consider extending the minimum occupation period and tightening loan approvals for resale flats priced above $1 million, to mitigate the ongoing trend of escalating HDB prices, especially in central locations.

Sustainable Trend or Bubble?

As Singapore's housing market evolves, the question remains: Is this rising phenomenon of million-dollar flats a sustainable trend or an unsustainable bubble waiting to burst? Only time will tell.