106 HDB resale flats sold for over S$1m in first half of 2021, over 4-fold increase year-on-year

• In the first half of 2021, 106 HDB resale flats were sold for more than S$1 million
• Sales took place in mature, centrally located estates such as Queenstown and Bishan
• Sales were driven by buyers looking for more space and better connectivity, analysts said
• HDB resale prices jumped 13.2 per cent over the 12 months from June last year
• Analysts said delays in the construction of BTO flats spurred demand for resale flats

SINGAPORE — The number of Housing and Development Board (HDB) resale flats changing hands for above S$1 million in the first half of this year jumped to 106, more than four times the total for the same period in 2020. Nineteen of these sales were in June alone.

Flash data from real estate portal SRX released on Thursday (July 8) showed that the highest price for a resale flat sold last month was S$1,268,000 for a three-room terrace unit along Jalan Bahagia near Whampoa estate.

Ms Wong Siew Ying, head of research and content at real estate agency PropNex, said that all 106 transactions took place in mature estates, especially in more central locations with a broader range of amenities.

The central area, primarily Pinnacle@Duxton in Tanjong Pagar, led with the highest number of million-dollar HDB resale transactions with 30 deals, followed by Queenstown and Bishan with 16 transactions each.

In non-mature estates, the highest price commanded by a resale flat last month was S$968,000, for an executive apartment on Bukit Batok Street 25.

In the first half of last year, a total of 24 resale HDB flats sold for more than S$1 million. For the full year of 2020, the total was a record 82 flats at that price level — eclipsing the previous record of 71 such sales in 2018.

The numbers point to a growing trend over the last five years of HDB resale flats being sold for at least S$1 million.

Aside from a slight dip in 2019 when there were 64 such transactions, the number of resale flats sold for at least S$1 million have steadily increased from 12 in 2015 to the 82 figure last year, Propnex data showed.

SALE OF MILLION-DOLLAR FLATS 

Ms Christine Sun, senior vice-president of research and analytics of property agency OrangeTe, said that the increased demand for flats selling above S$1 million could be driven by couples or singles in their 30s to 50s who work as top executives in private firms or the public sector.

“These people do not mind paying top dollar for well-located resale flats as they perceive connectivity and convenience to be crucial when it comes to choosing a home,” she said.

Other buyers could be those downgrading from private property or former homeowners who had sold their property in an en-bloc sale and have collected a substantial sum of money from the collective sale.

For many of these buyers, million-dollar HDB flats are considered affordable compared to private property, Ms Sun said.

Mr Nicholas Mak, head of research and consultancy at property agency ERA, said that the number of resale flats sold at at least S$1 million each pointed to the strength of the HDB resale market.

He noted that buyers of the most expensive HDB flats sold last month showed a preference for spacious homes that presented value for money.

Three of the most expensive HDB flats sold last month were transacted above S$1.23 million each, with the unit price of each of these three flats below S$1,000 per square foot as they were rather large in size.

“The pandemic and current work-from-home culture could have pushed more households to look for larger homes,” he added.

Mr Ong Kah Seng, who has been a property analyst for 17 years, said that the sales reflected a continued preference by affluent buyers for centrally located flats, including Pinnacle@Duxton and lifestyle-oriented flats built under the HDB's Design, Build and Sell Scheme (DBSS).

These flats offered buyers an opportunity to live in prime, prestigious areas at the ideal price point, Mr Ong said.

Given the demand for such flats, Mr Ong recommended that the Government consider reintroducing the DBSS scheme, which was discontinued in 2011, to offer housing varieties for Singaporeans who have high housing aspirations.

DBSS flats, which were meant to be condominium-style flats, were developed and sold not by HDB but by private developers even though they were considered public housing. 

RISE IN HDB RESALE PRICES

On average, HDB resale prices rose 0.9 per cent in June compared with the month before. They also jumped 13.2 per cent compared with June last year.

Analysts attributed the increase in sale prices to demand spurred by delays to the construction of new Built-to-Order (BTO) flats.

“With the completion delays of new BTO flats spurring demand for resale flats and the limited availability of choice resale units, we expect HDB resale prices to continue to see some upward pressure,” Ms Wong of Propnex said.

Mr Mak of ERA said that the presence of cash over valuation (COV) could also contribute to the acceleration of HDB resale prices. This is the cash that buyers have to pay if the selling price exceeds HDB's valuation of the flat.

He noted that a quarter of flats sold from January last year to April this year had been sold with COV.

“As a result, the official HDB resale price index could increase by 8 per cent to 11 per cent for the whole of this year,” Mr Mak said.

OVERALL HDB RESALE TRANSACTIONS

The overall number of HDB resale transactions in June rose 17.5 per cent from May this year to 2,311, though resale volume fell 5.8 per cent from the same month last year.

Ms Wong of Propnex said that the sales notched up in June last year had been higher due to the spike in sales when the two-month semi-lockdown period ended last June.

She noted that there had been a broad-based increase in sales for all flat types in the first half of this year compared with the same period last year. Larger flats, especially, saw a steeper pace of growth.

For example, the number of five-room flats resold in the first half of this year was 70 per cent higher than that of the same period last year.

Resale volume of executive flats also jumped by about 67 per cent to 1,063 units over the same period.

Ms Wong attributed this to buyers preferring a more spacious home to accommodate working or schooling from home.

Ms Sun of OrangeTee observed that while HDB resale volume rebounded after the heightened alert measures were partially eased in mid-June, last month’s sales total was still below the 12-month average of 2,377 units from June 2020 to May 2021.

She said that this could be due to viewing restrictions imposed during the heightened alert period and said that sales could pick up as the Government relaxes infection controls further.