The Skyrocketing Cost of HDB Apartments in Singapore

In Singapore, the skyrocketing prices of resale HDB apartments have become a source of anxiety for many. Once a rare occurrence, sales crossing the S$1 million mark are now increasingly common, with the first such transaction noted back in 2012. Surging demand for spacious living post-pandemic has fueled this trend, leading to over 6% of transactions reaching seven figures by early 2025—a sharp rise from less than 1% just two years prior.

A Trend on the Rise

In 2024 alone, there were 1,035 sales of million-dollar HDB homes, and the first half of 2025 has already reported 760 such transactions. Moreover, an additional 21% of units fall into the S$750,000 to S$1 million bracket, indicating that we might soon see more apartments joining the million-dollar club. This means that almost a quarter of resale HDBs could be priced at S$1 million or more!

Understanding Price Increases

Economic cycles have always seen fluctuations in housing prices. Just as we are witnessing the current boom, 45 years ago, Singapore saw its most expensive executive apartments crossing six figures. Back then, homes were priced closely between primary and resale markets, with the median income hovering around S$990—a stark contrast to today’s S$11,297.

As incomes and living standards improved, comparable housing prices have also surged. A home that once cost S$50,000 now hovers around S$500,000, and the once standard S$100,000 apartment has entered the S$1 million realm.

Is This Really a Cause for Concern?

It’s crucial to recognize that rising housing prices can actually bode well for the economy. Historically, the ratio of median prices to household income in Singapore makes its HDB market one of the most affordable in the Asia-Pacific region. With the current median transacted price of S$630,000, many believe the future rise to S$1 million will be sustainable, as incomes are expected to keep pace.

Inflation: A Double-Edged Sword

While inflation is often viewed negatively, it can actually work in favor of homeowners, especially those with mortgages. As property values rise, the burden of debt may lessen for homeowners. This is a significant factor for the 80% of Singaporeans who reside in HDBs.

Housing as a Retirement Asset

As the cost of living rises, property values need to appreciate in order to support financial stability during retirement. Many retirees looking to downsize can use the profit from selling their larger homes to supplement their pensions. Rather than depreciate, HDB homes have continued to maintain their value, even when lease decay is taken into account.

Finding the Sweet Spot in Housing Prices

Interestingly, achieving a balance in housing prices is crucial. If prices are too low, retirees may find their wealth eroded; too high, and younger generations may struggle to afford necessary living spaces. Ideally, prices should grow in line with income and rise slightly faster than consumer prices to ensure all generations can thrive.

Conclusion: Embrace the Change!

As we look towards the future of HDB pricing, it’s essential that we maintain a stable relationship between prices, incomes, and inflation. No matter if apartments cost S$1 million or S$2 million in years to come, what truly matters is their affordability relative to income. So, rather than fearing the rise, it’s time to embrace it as a vital part of Singapore's evolving housing landscape!