The number of Housing and Development Board (HDB) flats that were sold for at least S$1 million hit a historic high last year, despite the Covid-19 pandemic and economic downturn. This is based on flash data released by real estate portal SRX on Thursday (Jan 7).
There were a total of 82 million-dollar flats transacted in 2020, eclipsing 2018’s record of 71 such deals.
Last month alone, 10 such flats exchanged hands.
In contrast, figures from 2012 to 2014 showed that only seven flats were sold for at least S$1 million in the three years combined.
The numbers started creeping up from 2015 with 12 such transactions, growing to 20 in 2016, 46 in 2017 and 64 in 2019.
Based on HDB’s data, the top five areas where 2020’s million-dollar flats are located are: The [email protected] in the central area (22), Queenstown (16), Bishan (14), Bukit Merah (13) and Toa Payoh (seven).
A notable sale was that of a [email protected] flat for a record price of S$1.258 million last September.
More than 70 per cent of the million-dollar flats sold in 2020 were built in the past 10 years.
With the million-dollar transactions and record sale prices of some HDB flats in mature estates, Mr Gan Thiam Poh, Member of Parliament for Ang Mo Kio Group Representation Constituency, had asked the Government whether it had plans to address “pent-up demand”.
In response, National Development Minister Desmond Lee said that headline-grabbing articles on HDB flats transacting at more than S$1 million may have given some people the impression that there is “very, very high demand” overall and that prices are escalating significantly.
Such transactions, however, are a “small minority” with only 38 out of more than 14,400 HDB resale transactions (or 0.26 per cent of transactions) between January and August 2020 crossing the million-dollar mark, he disclosed.
The latest SRX data showed that the million-dollar flats accounted for 0.35 per cent of the total number of HDB resale transactions last year.
Property analysts said that the buoyant sales could be because the prices of private condominiums have remained resilient through the pandemic, boosting the appeal of HDB flats that better fit buyers’ budget and housing needs.
Ms Wong Siew Ying, head of research and content at PropNex Realty, said that a family-sized private condo in the suburbs could cost S$1.5 million, but for S$1 million or so, the buyer could get a HDB resale unit on a high floor and in a prime spot near the city.
Presented with such a choice, buyers have likely placed substantial value on attributes such as the flats’ central location, convenience of being near to the city, and sweeping views of downtown Singapore afforded at the units on the higher floors, she pointed out.
Adding that a large portion of these million-dollar HDB flats are fairly new as well, with a remaining lease of 89 years or longer, she said that all these factors had helped to increase the appeal of these resale flats.
Ms Christine Sun, head of research and consultancy at OrangeTee & Tie, said that the four government stimulus packages last year to cushion the impact of the pandemic that amount close to S$100 billion have preserved household incomes and employment of many Singaporeans.
“This may have boosted buyer confidence to proceed with their property purchases and the strong demand helped to sustain property prices over the past few months,” she said.
Mr Nicholas Mak, head of the research and consultancy department at ERA Realty, said that it could also be a result of rising household income over the past decade, as well as a trend of HDB building taller flats to intensify land use.
“Million-dollar flats are usually those on high floors, with a good view. They are cool, windy and quieter, further away from the traffic noise,” he said.
Mr Mak also pointed out that there was a marked increase of new flats that entered the resale market after reaching their five-year Minimum Occupation Period (MOP).
In the first 10 months of 2020, for instance, about 22 per cent of resale HDB flats sold were newer flats that were six years old or younger — a “very high percentage” compared to levels seen before 2018, he said.
In contrast, only 3.9 per cent of resale flats sold in 2015 were newer flats.
People would pay a premium for these newer resale flats given their long remaining leases.
Another plus point is many of them are located in desirable mature estates, such as Dawson and Tiong Bahru, and are well-designed.
“From far, they look like condominiums,” he said.
MORE MILLION-DOLLAR FLATS TO COME?
The analysts believe that 2021 could see another bumper year of million-dollar flats transacted, based on the number and location of the flats that have just attained their MOPs or will attain it this year.
Online real estate portal PropertyGuru had said that more than 50,000 HDB flats would have reached their MOP last year and this year combined.
From numbers compiled by PropNex Research, it looks like 25,530 HDB units will attain their MOP this year.
These include 2,827 units in Kallang-Whampoa, 962 in Clementi, 570 in Bukit Merah, 465 in Toa Payoh, and 408 in Bishan.
These are some of the areas where million-dollar flats were sold in recent months.
Mr Mak of ERA Realty said that after Mr Khaw Boon Wan took over as National Development Minister following the 2011 General Election, there was an aggressive home-building programme that led to an increase in the number of flats entering the resale market from 2019 — and it could point to things to come.
Ms Wong of PropNex Realty said that there will be a group of buyers who will continue to pay top dollar for larger flats in attractive areas, especially newer ones that come with a good view.
Source: Today – 7 Jan 2021