The Rising Cost of HDB Homes: A Growing Concern for Singaporeans

In Singapore, the soaring prices of resale HDB apartments have stirred up quite the conversation—and a fair bit of anxiety among residents. Once merely a rarity, transactions exceeding S$1 million have seen a dramatic uptick, fueled by changes in economic conditions and evolving housing demands since the pandemic.

A Million-Dollar Milestone on the Horizon

From just under 1% in 2022, the percentage of million-dollar HDB transactions has skyrocketed to over 6% in early 2025—more than double from the year before. The previous year, 1,035 HDB units sold for over a million, and the first half of 2025 has already recorded 760 such sales. An additional 21% of HDBs are now priced between S$750,000 and S$1 million, potentially pushing more beyond that million-dollar threshold.

Not a Cause for Alarm: The Case for Rising Prices

While many feel uneasy about these developments, a gradual rise in housing prices is not only beneficial but essential for the economy's functionality. Just as we witness the current trend of apartments nearing a million-dollar price tag, we can look back to 45 years ago, when prices for executive apartments were climbing into the six figures.

A Historical Perspective on Housing Prices

In 1979, the median household income in Singapore was less than S$990, while today it stands at approximately S$11,297—nearly 12 times higher! This increase has paralleled the rise in apartment prices, affirming that the affordability of HDBs remains relatively stable compared to incomes.

Understanding Inflation and Housing Value

Inflation impacts not only consumer goods but also the value of property, often benefiting homeowners, especially those with mortgages. As property values increase, so does the leverage for homeowners to repay debts, making ongoing price increases a positive trend for many.

Housing as a Pillar of Retirement Planning

As living costs rise, the last thing retirees need is for their property value to stagnate. Many may downsize to access additional funds for retirement, so a thriving property market is crucial. Contrary to popular belief, HDB values do not significantly erode due to lease decay; many homes with only 50 years left on their lease still command seven-figure prices.

The Importance of Balance in the Housing Market

It’s crucial for the market to maintain a balance: housing prices should ideally remain around four to five times the annual household income. If housing costs fall too low, it jeopardizes the wealth of current homeowners; if they soar too high, younger generations will be financially strained.

A Stable Future for HDB Prices

Ultimately, the key to a successful housing market isn’t just about the absolute price of a unit, but how those prices evolve in relation to incomes and consumer prices. As long as this balance persists, concerns over prices hitting the million-dollar mark may not be as dire as they seem. In fact, it could be a sign of economic health amid changing times.