Record 1,000 HDB resale flats hit $1m in 2024: Market anomaly or new norm?

The number of flats sold on the resale market for a million dollars or more has reached a record high and is unlikely to slow down in 2025, according to property experts.

Real estate agency ERA Singapore told AsiaOne that 1,003 million-dollar resale flats have been transacted in 2024 as of Wednesday (Dec 24), more than double the 470 recorded last year.

Real estate agency Huttons Asia had also earlier said in November that in the first 11 months of the year, 931 of such million-dollar transactions have already been recorded, which make up for between three and four per cent of the total number of flats sold in 2024.

The agency said that around 60 per cent of the million-dollar flat transactions in 2024 are in the price range of $1 to $1.1 million. 

The record for the most expensive resale flat in Singapore has also been broken several times this year. A five-room unit on Boon Tiong Road and Henderson Road changed hands for $1.58 million each in June 2024, before a flat at Margaret Drive was sold for $1.73 million a month later.

"The presence of HDB resale flats transactions at $1 million or more is already a regular feature in Singapore's public housing market," Nicholas Mak, chief research officer of real estate platform Mogul.sg told AsiaOne.

"Similar to chicken rice being priced at $8 or more a plate at some food courts, million-dollar HDB resale flats are also a product of inflation."

Eugene Lim, ERA Singapore's key executive officer, concurred that the rise in million-dollar flats is in "line with expectations" with buyers coveting flats in mature estates.

"Buyers are willing to pay a premium for such flats in Toa Payoh, Central, Bishan, and Kallang Whampoa with excellent connectivity and amenities," he told AsiaOne. "Since these HDB towns are largely developed, there are fewer plots available for HDB to build new flats.

"Consequently, the flats in mature estates that recently reach the minimum occupation period are highly coveted by buyers and many are willing to shell out a premium for such flats."

The rising private property prices has also led to buyers turning to the public housing market instead, said Lim.

"We have also observed private property downgraders willing to pay a premium for HDB resale flats after selling their homes," he added.

Sengkang also saw its first million-dollar HDB resale transaction in April, when a 1,539 sq ft maisonette on Compassvale Lane was sold for $1 million.

Only Choa Chu Kang, Jurong West and Sembawang had yet to see a million-dollar flat.

Lim also pointed out that the new HDB classification, where BTO flats in prime locations will come with stricter resale restrictions, means that buyers will turn to the resale market if they are unwilling to wait for the longer minimum occupation period (MOP). 

Loan-to-value limit reduced

To cool the resale market, HDB and the Ministry of National Development (MND) in August reduced the loan-to-value limit for HDB housing loans from 80 per cent to 75 per cent.

Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc, believed that the effects from the adjustment to the LTV limit will be "significant".

"With a tighter borrowing limit, buyers are encouraged to manage their finances more conservatively, potentially reducing the risk of market overheating," he said to AsiaOne. 

But Lee Sze Teck, senior director of data analytics at Huttons Asia, said that the changes may have a minimal impact on resale prices in the long run.

"Resale demand may slow temporarily in the near term as buyers take stock of the new measures but demand will return and prices will continue to rise," he added.

Number of million-dollar flats to increase in 2025? 

As we approach the new year, property experts told AsiaOne that while million-dollar transactions will remain a small fraction of the total resale flats sold, they are expected to stay.

The number could even increase to between 1,200 and 1,400 by the end of 2025 with inflation expected to ease further, said Lim.

"Homebuyers may exhibit stronger spending propensity, which could continue to support the growth of million-dollar flat transactions," he added.

Mak said that prices for HDB resale flats are expected to rise next year due to demand.

This could lead to the number of million-dollar HDB flat transactions reaching new records in 2025, he added.

"However, we also expect some economic challenges in 2025 that could reduce demand for real estate. Hence, some buyers may delay their home purchase until the economic condition is more favourable."

To slow down the number of million-dollar flats, Heikal Shafrudin, co-founder of Herohomes said that the government should consider implementing longer MOP and lower loan approvals for resale flats above $1 million. 

"Otherwise, this trend is likely to continue especially in the central locations," he said. 

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chingshijie@asiaone.com