SINGAPORE: The Singaporean property market has witnessed a spike in million-dollar resale Housing Board (HDB) flats, reaching nearly 100 units in June alone.
This unprecedented rise accompanies record-breaking price increases in HDB resale values, sparking widespread concern online, with some, surprised by the spike, stating, “What madness is this?”
According to flash estimates from SRX and 99.co on July 8, HDB resale prices soared by 1.8 per cent in June, marking the ninth consecutive month of price hikes.
This upward trend includes all room types across both mature and non-mature estates, despite a slight dip in resale volumes from May to June, The Straits Times reports.
Why million-dollar HDB resale flats spiked according to experts
ERA Singapore’s head of research and market intelligence, Wong Shanting, pointed out that the June launch of Build-To-Order (BTO) flats diverted some demand away from the resale market, contributing to decreased resale volumes.
Additionally, the June school holidays likely further dampened transaction volumes as potential buyers and sellers were on vacation.
Notably, the percentage of resale flats fetching at least S$1 million rose significantly, accounting for 4.4 per cent of total resale volumes in June.
This marks a 29.7 per cent increase from the previous month, with transactions rising from 74 units in May to 96 in June.
Nicholas Mak, chief research officer at Mogul.sg attributed this surge to heightened interest in flats located in prime areas or near MRT stations, likely to be classified under HDB’s new Prime or Plus categories with shorter Minimum Occupation Periods (MOP).
Buyers, especially those who didn’t want to wait long for new BTO flats, started buying resale flats more, driving prices higher.
Another factor contributing to the escalating prices is the dwindling supply of family-sized units in the resale market, particularly those priced between S$1 million and S$1.65 million.
Larger families or those prioritising spacious accommodations, such as three-bedroom flats in mature estates, are willing to pay premiums for such properties.
Christine Sun, Chief Researcher and Strategist at OrangeTee, highlighted positive consumer sentiment and strong economic indicators are the reasons behind the surge in million-dollar resale flat transactions.
She noted that “the upper-middle-income group who have experienced consistent wage growth,” including former private property owners downsizing into HDB flats, contributed significantly to this trend.
In terms of location, Kallang Whampoa(18) recorded the highest number of million-dollar transactions, followed by Geylang(11) and Bukit Merah(11).
Wong Siew Ying, head of research and content at PropNex, observed that several transactions were concentrated in developments like St George’s Towers, where units recently met their MOP requirements, allowing owners to sell at higher prices.
Singaporean concerns regarding housing affordability
However, amid the record-breaking transactions and price hikes, concerns have been mounting online regarding housing affordability.
Many Singaporeans voiced worries about the widening gap between property prices and average incomes, questioning the sustainability of affordable housing policies in the face of such rapid inflation in resale flat values.
One Singaporean online lamented, “If prices will not remain affordable for everyone, what’s the purpose of affordable housing?” Others are “worried about the future” of the thought of “Singaporeans becoming homeless.”
A commenter noted, “More than half of Singaporeans are not able to buy resale leasehold (not even freehold) property on a single income. Both parents must work at least. If not, they end up renting.
How can we have kids and follow traditional family values when even 99-year leasehold properties are expensive? In the future, there may be fewer locals and more immigrants from abroad.”
He added, “Remember when a single dad’s income could afford the mother to stay at home and care for a kid? No wonder the younger generation is mentally ill. Truly a rat race to the bottom.”
“Now the entire neighbourhood will be asking for S$1 million prices as well causing the overall market to go higher and higher,” another commenter added. /TISG
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