Commentary: Why buy a S$1 million HDB resale flat instead of a private condo?

Executive flats in Woodlands selling for more than S$1 million raised concerns about housing affordability, but there’s good reason why those flats fetched such a hefty price, says PropNex CEO Ismail Gafoor.

Ismail Gafoor

21 Jun 2022

SINGAPORE: When two Housing Development Board (HDB) executive flats in Woodlands sold for more than S$1 million in May, netizens expressed concerns about the affordability of housing for younger generations.

While many in Singapore have come to terms with certain flats commanding a resale value of over S$1 million, seeing these deals in non-mature housing estates could disquiet families looking to buy a resale flat.

It is not unusual for so-called million-dollar HDB resale flat transactions to pop up in mature estates. In fact, these have shown up with more regularity than in the past, with 135 such deals already done in the first five months of the year – up from 87 in the January to May period a year ago. At least 14 such resale flats changed hands in June, according to transaction data.

In 2021, the number of HDB flats resold for at least S$1 million hit an all-time high at 259, representing a three-fold jump from the 82 resold in 2020.

There’s a key reason behind the Woodlands executive flats’ hefty price tag: Floor space.

Introduced in 1984 and phased out in the early 2000s, executive flats are a rarity today. They offer generous floor area compared to the average 5-room flat, which tend to be below 120 sq m (1,290 sq ft). Hence some buyers are willing to stump up S$1 million for such flats.

Five resale HDB flats – all executive flats – in non-mature towns of Yishun and Woodlands were transacted for at least S$1 million so far this year. Among them, three units were sold in May. Prior to these deals, the last time a resale flat in a non-mature estate was sold for S$1 million was in 2018 for a 177 sq m maisonette in Hougang.

The executive flats resold are on the larger side, with four of them exceeding 180 sq m (1,937 sq ft). Location likely helped boost the values of these flats. They are just minutes away from the closest MRT stations and numerous amenities, being in well-established towns.

Given these advantages, buyers probabl