HDB resale market likely to remain robust this year


Michelle Ng
Housing Correspondent

15 January 2022

SINGAPORE -The new year has begun much as the old one ended with Housing Board flats changing hands at sky-high prices.

In 2021, a record 259 HDB resale units sold for over $1 million, more than three times the 82 units in 2020, but the blistering pace of big-buck sales has hardly slackened so far this year.

Just 13 days into 2022, 16 resale units had already changed hands for at least $1 million.

The 2021 figure was initially reported at 261 but it has been revised to 259 in HDB records.

There were 36 HDB resale flats sold for at least $1 million last month - the highest monthly figure - despite new property cooling measures kicking in on Dec 16.

Buyers have not missed a beat this month as well, with more than one resale unit being sold for at least $1 million each day on average.

This begs the million-dollar question: Will the new cooling measures chill the high-priced flat spree?

With close to 5,000 HDB homes in sought-after areas such as Bukit Merah, Toa Payoh, Queenstown, Clementi and Ang Mo Kio reaching their minimum occupation period (MOP) this year, it is unlikely the million-dollar trend will die down in 2022, although it may increase at a slower pace.

This is because choice flats in these mature estates, which have seen their fair share of million-dollar units over the years, will continue to draw buyers and thus fetch higher prices, said property analysts.

After completing the mandatory five-year MOP, owners can sell their homes on the open market.

HDB data showed that more than 31,000 flats across 16 estates will reach their MOP this year, thus boosting the pool of eligible resale units.

Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie, said the new cooling measures may not have that big an impact on buyers of pricey units.

"Some buyers of million-dollar flats may not be applying for a maximum loan while others could be borrowing from financial institutions. Those who buy million-dollar HDB flats usually have the financial means as well," she said.



The Dec 16 measures tightened the loan-to-value (LTV) limit for housing loans from the HDB from 90 per cent to 85 per cent, among other steps.

The LTV limit for those borrowing from financial institutions to buy HDB flats remains unchanged at 75 per cent.

Ms Sun noted: "As prices in the private residential market still remain high in the immediate aftermath of the cooling measures, some buyers may decide to buy million-dollar flats instead since their locations are good and are more affordable when compared with private homes in the city fringe."

But property observers were quick to point out that million-dollar deals typically form a small portion of HDB resale transaction volumes and are not representative of the overall market.

For instance, the 259 flats sold for at least a million dollars last year comprise just under 0.9 per cent of the total HDB resale transactions.

Professor Sing Tien Foo, director of the Institute of Real Estate and Urban Studies at the National University of Singapore, said while million-dollar HDB deals may continue to make headlines, he does not expect sale numbers to increase significantly this year. "The number of such deals is likely to remain small, estimated to be below 1 per cent of the annual transaction volume," he said.

Mr Mohan Sandrasegeran, research and content analyst at real estate agency Ohmyhome, noted that when the 2018 cooling measures kicked in, million-dollar HDB deals dipped slightly, from 71 units in 2018 to 64 in 2019.

"Though we can expect the overall million-dollar trend to continue in 2022, it might be increasing at a slower pace because of the cooling measures in place," he said.

Home buyers and market watchers are also keenly observing the HDB resale market for any possible price adjustments, as last month's figures have yet to reflect any impact of the cooling measures.

Flash estimates showed that HDB resale prices rose 12.5 per cent over last year, the highest annual growth recorded since 2010, when prices grew by 14.1 per cent.

Fewer resale transactions are expected in the first two months of this year due to the delayed impact of the cooling measures and the typical slowdown in activity during the Chinese New Year, which falls early next month.

However, Mr Sandrasegeran said HDB resale demand will likely remain healthy due to the large and steady pool of potential buyers who are primarily first-timers undeterred by the cooling measures.

"The main drivers for the HDB resale market this year will continue to be couples and families who have immediate housing needs and are unable to wait for Build-To-Order (BTO) flats," he said.

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