Why are there so many million-dollar HDB flats still?

Well, they did say National Day is a time to reflect on what makes us Singaporean; and at this point, million-dollar flats are on par with chicken rice, children thinking the national anthem is called "Mari Kita," and National Service. 

At 54 transactions, it's the highest number of million-dollar flats we've seen in any single month; and the crowning gem was, once again, Pinnacle @ Duxton ($1.48 million for a five-room flat). Million-dollar flats made up around 2.2 per cent of resale flat transactions for the month: still small enough to be considered outliers, but the number of outliers sure seems to be growing. 

The worry though, is where the gravy train will end. 

As I've mentioned in many articles, Singapore is ageing; and at some point, we're going to be left with a lot of vacant flats when the previous generation passes on (we have more old people than young ones). As only Singaporeans and PRs can buy flats, there isn't any other buyer demographic to come and soak up the demand. 

This can lead to a jarring division, in which the previous generation saw record gains for their flats, but the future ones have no hope of seeing something similar.

At some point, one generation is going to find their flats have become liabilities; and the consequences may not be pleasant. This divide may also be brought about because of the new plus/prime classification of future flats, which we've yet to see the effects of. 

There's also a worry in the picture painted by rising prices. 

Just as we've seen in previous downturns like the dot.com burst, asset prices may be inflated before the crash/recession. This makes the downturn much more unexpected, among lay investors who think "fast rising prices = strong economy."

I run into this quite often in the property market, where less experienced buyers point at home prices and say "Look at it go up, the housing market is strong." In reality, high property prices may have no relation to how healthy the market is. 

Consider, for instance, the possibility that so many million-dollar flats may be an effect of downgrading. Condo sellers flush with cash may be willing to pay more, if it's their intended retirement home (if you're never selling, you care about convenience and comfort; not about resale gains). 

If this turns out to be the main reason behind our expensive flats, it could even signify a coming downturn in the private segment, as it suggests older homeowners are giving up their condos. 

While this is going on, no less than 60 property agents have ended up being involved in our biggest money-laundering case yet.

No news yet on whether any agents are actually in trouble, as they're all just described as assisting. But one of the cases involves the sale of 20 units at Canninghill Piers, for $85 million.

Which kind of makes me question how smart those money-launderers really are. There are collective sale deals all over Singapore, many of which are quiet and unnoticed. Such as, say, buying over a small batch of walk-ups, which fewer people would question (and it can be resold to developers later.)

But instead of being subtle, they bought 20 units at one of the most expensive new launches in the country? 

Maybe all of this is a sign that the authorities need to look closer at any kind of collective deal. It may be time to have a mandatory registry, where en-bloc attempts are required to be registered. This would also be useful to home buyers, so they know not to buy a unit where the last en-bloc had 78 per cent approval, and end up having to move out two years after moving in. 

Weekly Sales Roundup (Aug 23 – Aug 29)

Top 5 Most Expensive New Sales (By Project)

Top 5 Cheapest New Sales (By Project)

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
THE MYST	$1,144,000	517	$2,214	99 yrs (2023)
THE LAKEGARDEN RESIDENCES	$1,139,000	678	$1,928	99 years leasehold
10 EVELYN	$1,461,550	495	$2,952	99 yrs (2022)
PULLMAN RESIDENCES NEWTON	$1,498,000	463	$3,236	FH
MIDTOWN MODERN	$1,513,710	409	$3,701	99 yrs (2019)

Top 5 Most Expensive Resale

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
GRANGE INFINITE	$7,250,000	2680	$2,705	FH
AALTO	$6,300,000	2443	$2,578	FH
BOTANIKA	$5,320,000	2099	$2,535	FH
CAIRNHILL PLAZA	$4,300,000	2293	$1,875	FH
SOMMERVILLE PARK	$4,125,000	1948	$2,117	FH

Top 5 Cheapest Resale

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
PRESTIGE HEIGHTS	$622,000	334	$1,864	FH
M66	$690,000	463	$1,491	FH
SIMS URBAN OASIS	$700,000	463	$1,512	99 yrs (2014)
SEASTRAND	$705,000	570	$1,236	99 yrs (2011)
URBAN VISTA	$720,000	441	$1,631	99 yrs (2012)

Top 5 Biggest Winners

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	RETURNS	HOLDING PERIOD
ONE AMBER	$3,750,000	1701	$2,205	$2,427,420	17 Years
BUTTERWORTH 8	$2,450,000	1313	$1,866	$1,551,410	21 Years
CANARY VILLE	$2,680,000	1550	$1,729	$1,512,000	16 Years
CHILTERN PARK	$1,828,000	1270	$1,439	$1,353,000	20 Years
THE GARDENS AT BISHAN	$1,800,000	1152	$1,563	$1,140,000	16 Years

Top 5 Biggest Losers

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	RETURNS	HOLDING PERIOD
EON SHENTON	$1,520,000	689	$2,206	-$18,200	16 Years
ICON	$1,250,000	700	$1,787	-$10,000	9 Years
SIMS URBAN OASIS	$700,000	463	$1,512	$3,967	6 Years
LUXE VILLE	$1,030,000	786	$1,311	$8,200	13 Years
ICON	$1,073,000	581	$1,846	$28,000	14 Years

Transaction Breakdown

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This article was first published in Stackedhomes.