Just a few months ago, two separate property listings were posted with a price tag of $2M. Although they were eventually taken down by the authorities (one for the misleading ad and the other for an “unrealistic” listing price), that triggered discussions about when we might actually see a $2M resale HDB transaction.
Well, we have officially gotten much closer, courtesy of a 5-room resale HDB flat at SkyOasis @ Dawson transacting at a record $1.73M. This surpasses the previous high of $1.48M for a 5-room flat in the same development, which occurred last year. The last record-breaker, a 5-room flat at CityVue @ Henderson, which sold for $1.59M, is also located nearby. The sale has sparked discussions about the future of Singapore’s housing market and the concerning trend of million-dollar HDB flats. Let’s take a closer look at this transaction and its implications for the property landscape.
Most Expensive HDB Transaction To Date
SkyOasis @ Dawson, located in the sought-after Queenstown area, is a relatively new development completed in 2021. The project is part of HDB’s efforts to rejuvenate mature estates and offer modern living spaces with excellent amenities. Some key features of this development include:
- Strategic location in Queenstown, a mature estate with a rich history
- Proximity to multiple MRT stations (Queenstown and Redhill)
- Easy access to city centre and business districts
- Modern design with sky gardens and community spaces
- Unblocked panoramic views of the surrounding area
The flat that fetched the record price is a 1,195 sqft 5-room corner unit on the 45th floor of 39 Margaret Drive, two blocks away (and 4 storeys higher) from the flat that fetched the previous record price of $1.48M in the development. Like the previous record brokered by PLB Realty, this flat is a SERS replacement flat from those that were displaced from Tanglin Halt, which allowed the owners to fulfil the Minimum Occupation Period (MOP) with a balance lease of around 96 years.
It was originally listed at an initial asking price of $1.838M before receiving offers from two groups of buyers and eventually closing at the record price of $1,725,888. The unit had only been on the market for less than a month.
With a similar facing, it boasts perpetual unblocked views as the GCB enclave right in front of SkyOasis @ Dawson is gazetted as a conservation area. The residential plot right beside also has a plot ratio of 2.1 translating to a maximum building height of 24 storeys, meaning that it will not obstruct the views from the 45th floor.
Is The Price Tag Justified?
Despite all the inherent attributes of the unit, is this flat really worth such a steep jump from the previous record price? Did the buyers overpay for this flat? Yes, we know – willing seller, willing buyer. But some food for thought: would HDB have taken this listing down if this had been listed on the HDB resale portal? And because of this “success story”, will more sellers be encouraged to push the envelope and list their flats at crazy prices?
If we really zoom in to the area, there are only 7 stacks across 4 developments in Queenstown that offer 5-room flats with this kind of elevation and view. And out of the 4 developments, SkyOasis @ Dawson is the closest to the MRT. Given the extremely low supply of flats with these attributes, along with the combination of factors, it did set the stage and created the perfect storm for high-value transactions in the area. So the more important question should be:
Will This New Benchmark Pricing Ever Become The Norm?
We think it’s unlikely, and here’s why.
Here’s a look at the top 10 most expensive HDB flats (all transacted in 2024):
The top 10 most expensive HDB flats at the time of writing have all surpassed the $1.5M mark, but if you take a closer look, most if not all of these developments are flat models that are no longer in production or being offered by HDB. Six out of the top 10 are DBSS flats in the Bishan and Toa Payoh area. We may continue to see high-value transactions coming out of these developments, but it is rather unlikely for this to become the norm when there is a limited supply of such flats with rare and highly sought-after attributes.
Furthermore, we do expect HDB to step in at some point if prices get even more rampant and out of control. We have already seen a major shift in the public housing market with the reclassification of HDB flats, namely the shift from the mature and non-mature classification of towns to the Standard/Plus/Prime models. With this new framework, stricter resale conditions such as a $14,000 income ceiling were also put in place, which effectively creates an upper limit for future flats with highly desirable attributes. After all, when these flats hit the resale market, it is not possible for buyers to afford a $2M HDB flat with a combined income of under $14,000 – although we would not rule out possible gaps in the system such as retirees with no income downsizing from private properties to such flats. But the pool of buyers that can exploit these potential gaps are going to be very limited as well, which prevents sellers from overinflating these flats (who can the buyers eventually sell to and not make a loss if it’s not a forever home?) and allow the market to correct itself.
Which Existing Flats Could Possibly Surpass $2M?
Aside from the developments already recording high-value transactions, more townships in the Outside Central Region (OCR) have been recording million-dollar transactions. For example, Sengkang recently recorded its first million-dollar HDB flat in April 2024, with the sale of an executive maisonette at Compassvale Lane.
However, these million-dollar HDB transactions are mostly coming from flat models that are no longer in production, especially those that surpass $1.5M. With that said, we can’t deny that the number of million-dollar HDB transactions has been on the rise. The number of million-dollar HDB transactions hit an all-time high this year, with over 200 of such transactions in May and June combined.
Despite the number of such transactions climbing, the average transacted price of million-dollar HDB flats is still hovering around $1.1M – and this average is unlikely to climb to $2M anytime soon, given that the government is closely monitoring the public housing market.
While we do not have a crystal ball to predict the future, if an HDB flat were to surpass $2M in the next few years, it would likely be an existing 40+ storey 5-room flat in one of the Queenstown developments.
The Silver Lining
Looking at the bigger picture, over the past 3 years, million-dollar HDB transactions make up less than 2% of the total number of resale HDB transactions. That’s 1,644 out of 83,969 transactions. The average transacted price of resale HDB flats as a whole in the same 3-year period is at $565,648 – significantly lower than the million-dollar transactions that make the headlines every time.
If we were to look at only 5-room or larger HDB flats, million-dollar transactions still only make up less than 4% of total transactions over the past 3 years (3.77% to be exact – 758 out of 20,096 transactions). And the average transacted price of 5-room or larger HDB flats is at $672,492, which is not as bad as the headlines make it out to be.
Closing Thoughts
Even though these million-dollar (possibly soon-to-be $2M) transactions are outlier deals that make up a very small percentage of overall market transactions, many have taken to social media to voice their concerns for the future generations. And these concerns are not completely unwarranted – if prices of public housing continue to rise at this rate, and million-dollar HDB flats inevitably become the norm, how will the next generation be able to afford a roof over their heads without relying on the great wealth transfer, or old money, so to speak?
However, with the government closely monitoring the public housing market and steadily increasing the supply of BTO flats, the increase in pricing will not see too drastic of a jump. And as we continue to propagate in our podcasts and webinars, there are still affordable options that are within reach for Singaporeans, now with even more support from the government in the form of additional grants.
If you are on the hunt for your next home and want a second opinion, feel free to contact us here. Our experienced consultants stand ready to assist you every step of the way in your search for a dream abode. PropertyLimBrothers, always happy to show you the place.
