As we close the chapter on 2024—a year that saw a record-breaking estimated 1,003 resale HDB flats transacted for at least $1 million—owners of 3-room flats might be eyeing the market with a mix of anticipation and optimism. This excitement stems from a few remarkable cases where 3-room resale HDB flats came close to the $1 million milestone.
It’s important to note that some 3-room flats sold for over $1 million in 2024 were actually HDB terrace houses. These unique properties, built in the 1950s by the Singapore Improvement Trust (SIT)—the forerunner of the Housing and Development Board (HDB)—hold historical and architectural significance, setting them apart from standard 3-room flats.
Among conventional 3-room HDB flats, the most expensive transaction to date occurred in December 2024, when a flat in Bidadari fetched $900,000—just shy of the $1 million mark. Earlier in the year, in August 2024, a 3-room flat in Bukit Merah changed hands for $860,000. These landmark sales raise a compelling question: how soon might we witness 3-room resale HDB flats breaching the $1 million threshold?
In this article, we will explore the price trends of 3-room resale HDB flats, examine the factors driving their appeal, and share our insights into the future trajectory of their market value.
Most Expensive 3-room HDB Resale Flats Sold In 2024
By the end of 2024, five 3-room resale HDB flats had sold for at least $850,000, including the two previously mentioned. Most of these flats were located in Bukit Merah. Notably, all but one of these flats have leases exceeding 90 years, with the exception having 87 years remaining— still a long lease by any standard.
As of September 2024, 30 resale 3-room HDB flats had transacted for at least $800,000. Of these, six were in Bukit Merah—a popular choice likely due to its central location, convenient access to MRT stations, and vibrant amenities, such as the eateries around Tiong Bahru Market & Food Centre.
Flats that fetched $850,000 or more shared common characteristics: close to the Central Business District (CBD), proximity to MRT stations, abundant nearby amenities, and access to leisure and dining options, including malls and popular eateries.
Nationwide, of the average year-on-year PSF price increase, 3-room HDB flats saw an increase of 6.7% in 2024 compared to 2023, from an average PSF price of $563 PSF to $600 PSF. Furthermore, the median resale price for three-room flats has seen a steady increase — from $370,000 in 2022 to $390,000 in 2023, followed by $410,000 in 2024.
Will 3-room HDB Resale Flats Soon Hit The Market?
It is not beyond the realm of possibility that we may one day witness a 3-room resale HDB flat surpassing the $1 million mark. In 2024, the number of 3-room resale flats sold for at least $800,000 surged tenfold compared to 2023, when only three such transactions occurred. This dramatic increase can be attributed to several factors: the soaring prices of private new launches and private resale 3-bedroom units, and the introduction of the new HDB BTO classification framework. Buyers priced out of the private market and those deterred by the stringent rules surrounding Prime and Plus BTO flats have turned to 3-room resale HDB flats, driving up demand and prices.
The Truth Behind Million-Dollar HDB Flats: Are They Really the Norm?
It’s crucial to dispel some misconceptions about million-dollar HDB flats. For context, these high-value transactions accounted for just 0.5% of all resale HDB sales over the past two years. Moreover, the median price of 3-room resale flats, at $410,000, remains less than half of the most expensive 3-room resale flat sold in 2024 for $900,000.
While these high-priced transactions capture headlines, they remain exceptions rather than the norm. Potential buyers should approach the market with caution and not be swayed by the hype, hoping for significant capital appreciation in the future. Paying a premium for a resale flat could mean purchasing at peak prices, leaving little to no room for further appreciation. Additionally, as the lease on a flat declines over time, its value inevitably depreciates.
The Impact of Increased BTO Supply
The Government’s plan to deliver 100,000 BTO flats between 2021 and 2025 could gradually shift demand away from resale flats as more of these BTO units are completed. With more buyers opting for new flats, demand for resale units may decline, potentially dampening prices and limiting further capital appreciation.
Cooling Measures and Their Implications
In addition, if resale HDB prices continue on an exponential upward trend, another round of cooling measures could be introduced. For instance, the recent reduction of the Loan-To-Value (LTV) ratio from 80% to 75% has already impacted buyers’ affordability. Additional restrictions could further dampen demand for resale flats, particularly among first-time homebuyers, stifling any significant potential for price growth.
Essential Advice for Buyers Eyeing 3-Room Resale Flats
Recent headlines about exorbitantly priced 3-room resale HDB flats may have sparked concerns among potential homebuyers, particularly those worried about being priced out of their dream home—or, for some, their first home. However, it’s important to remember that these high-priced transactions are outliers. For the most part, 3-room resale flats remain within a relatively affordable price range.
If you’re in the market for a 3-room resale HDB flat, here are some key considerations to keep in mind. These tips could help you secure a home that meets your needs and potentially improve your chances of achieving a quicker sale at a favourable price, should you decide to sell in the future.
Don’t Be Swayed by Headlines
High-priced 3-room resale flats making the news are rare exceptions. The majority of 3-room flats remain relatively affordable, so avoid overpaying based on the assumption of guaranteed capital appreciation.
Prioritise Value Over Price
Focus on flats that offer good value for their price, considering factors such as location, condition, and remaining lease. Flats near MRT stations and amenities often hold better long-term appeal and resale potential.
Be Mindful of Market Trends
Avoid purchasing at peak prices, which could limit future appreciation potential. Stay informed about market conditions, such as increasing BTO supply and potential cooling measures, as these can impact demand and pricing. Consider engaging an expert real estate consultant who can provide insights into market trends and help you identify the best options for your budget and goals.
Consider Lease Longevity
Flats with longer remaining leases tend to retain better value over time and appeal more to future buyers, reducing the risk of depreciation due to lease decay.
Think Long-Term
Choose a flat that aligns with your lifestyle, needs, and financial goals, ensuring it remains a practical and sustainable choice over the years.
In Conclusion
While the idea of $1 million 3-room HDB resale flats may seem like a looming reality, it’s important to recognise that these transactions are still exceptions rather than the norm. The majority of 3-room flats remain within an accessible price range, offering good opportunities for discerning buyers who carefully evaluate their options.
By focusing on key factors such as location, value, lease tenure, and market conditions, buyers can make informed decisions and avoid being influenced by hype or unrealistic expectations. Whether you’re purchasing your first home or seeking a flat that better suits your needs, patience and careful planning will always be your best allies in navigating Singapore’s housing market.
As the property landscape evolves with increasing BTO supply and potential policy changes, staying informed and, when needed, seeking professional advice will ensure you’re well-positioned to secure a home that aligns with your lifestyle and long-term housing needs—without overextending yourself.
Curious about navigating Singapore’s dynamic resale HDB market? Let our team of experts guide you in making informed decisions, whether you’re buying your first home, searching for a flat that fits your needs, or exploring the best options in today’s housing landscape. With personalised insights and professional advice, we’re here to help you find a home that aligns with your goals. Contact us today to get started!
