231 HDB resale flats were sold for at least $1 million in the first eight months of the year (Picture: Samuel Isaac Chua/The Edge Singapore)
SINGAPORE (EDGEPROP) - HDB transactions that cross the $1 million mark are expected to see a new high this year, according to a report by OrangeTee & Tie Research & Analytics. 231 HDB resale flats were sold for at least $1 million in the first eight months of the year. “The number is set to surpass 2021’s full-year record of 259 units by September,” the report states.
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Among the million-dollar HDB transactions this year, nine were in non-mature estates. Four were located in Woodlands, three in Yishun, and one in Hougang and Bukit Batok, respectively. In comparison, only one such transaction was recorded in 2018.
OrangeTee & Tie’s report attributes the growing number of transactions in non-mature locations to buyers potentially seeking cheaper alternatives as million-dollar flats in mature estates get pricier. The number of HDB resale units sold for at least $1.2 million in mature estates has multiplied, with 87 such transactions in the last two years.
Meanwhile, rising prices of suburban private condos may underpin the demand for million-dollar flats. In 2018, the gap between median prices for four-room million-dollar HDB flats and new condos in the Outside of Central Region (OCR) stood at only 0.5%. Comparatively, for the first eight months of this year, the gap stood at 53.6%, with median prices for four-room million-dollar flats and new condos in the OCR standing at $1.13 million and $1.73 million, respectively. (Find HDB flats for rent or sale with our Singapore HDB directory)
Demand for million-dollar flats has also been supported by a declining supply of large BTO flats in mature estates. The number of five-room and three-generation (3Gen) BTO flats launched dropped from 1,911 units, or 11% of total BTO units launched in 2017, to 1,204 units, or 7% of total BTO units launched in 2021. “As a result, buyers who wish to stay in mature estates and desire a large flat will have to turn to the resale market,” the report states.
Looking ahead, OrangeTee & Tie anticipates million-dollar flat transactions may continue to grow, underpinned by a limited supply of large flats in mature estates. “Even as more BTO flats have been launched in mature estates under the Prime Location Public Housing (PLH) model recently, all the units are three-room and four-room flats, possibly to keep prices affordable,” the report adds.
Demand for million-dollar flats are supported by growing incomes among Singaporeans, with the percentage of households with a $15,000 monthly income from work hitting a high of 21% in 2021.
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