HDB million-dollar flats are on the rise once again, with January marking a significant milestone in Singapore’s property market. Not only did January witness the highest number of million-dollar HDB sales to date, but it also saw the most expensive HDB flat, fetching S$1.568 million.
This price tag is a little over the previous record price of S$1.5 million set by a 4-room adjoined flat at Moh Guan Terrace in Tiong Bahru.
HDB resale prices surge
In January 2024, HDB resale prices surged by 1.5%, compared to December 2023. Both Mature and Non-Mature Estates witnessed an increase of 1.1% and 1.5% respectively.
Prices across all room types saw an uptick: 3 Room by 1.7%, 4 Room by 0.9%, 5 Room by 2.1%, and Executive by 0.8%.
Read more: Price gap analysis: Are HDB resale and condo prices narrowing?
Transaction volume rises
The transaction volume in January 2024 witnessed a significant surge, with 2,629 HDB resale flats changing hands, marking a 30.8% increase from December 2023. This also represents a 2.1% increase compared to the previous year.
Highs in transacted prices
The highest transacted price for a resale flat in January 2024 was a remarkable S$1,568,888 for a 5-room flat in The Peak @ Toa Payoh. The HDB resale flat is also now the most expensive HDB flat in the whole of Singapore.
In Non-Mature Estates, an executive apartment at Punggol Field achieved the highest transacted price at S$1,100,888.
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Record million-dollar HDB sales
In January 2024, a staggering 74 HDB resale flats were transacted for over a million dollars, breaking records from August 2023 which recorded 54 such units. This increase comprises 2.8% of the total resale volumes for the month.
Read more: HDB prices reach record high as 2023 came to a close
Spread across locations
Bishan topped the charts with thirteen units of million-dollar flats sold, closely followed by Bukit Merah with ten units.
Other areas contributing to the million-dollar HDB sales include Toa Payoh, Kallang Whampoa, Ang Mo Kio, Queenstown, Clementi, Bukit Timah, Serangoon, Hougang, Central Area, Geylang, Bedok, Woodlands, Tampines, Pasir Ris, and Punggol.
More to come?
Analysts foresee a potential surge of 500 HDB flats sold for a million dollars or more in Singapore by the end of 2024, with Sengkang and Sembawang likely to witness their first million-dollar transactions. The increasing trend is attributed to raised expectations among owners and policy changes affecting flat classifications.
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Factors driving the million-dollar HDB flat trend
The surge in million-dollar HDB sales is fueled by various factors contributing to the evolving landscape of Singapore’s property market.
Reduced frequency of BTO sales exercises
The reduced frequency of HDB Build-To-Order (BTO) sales exercises has limited the supply of new flats available for purchase. With fewer opportunities to secure newly built properties, buyers are turning to the resale market in search of suitable housing options.
Lower supply of BTO flats
In addition to reduced BTO sales exercises, there is a lower supply of BTO flats offered this year compared to last year. This decrease in supply has intensified competition among buyers, driving some towards the resale market where they have more options to choose from.
Participating in the upcoming BTO exercise? Check out our article here: HDB BTO 2024 February: Bedok, Punggol, Tanglin Halt & more (Project locations and details)
Continued demand from couples and families
Despite changes in market conditions, there continues to be steady demand from couples and families in need of immediate housing solutions. This consistent demand contributes to the resilience of the resale market, with buyers actively seeking properties that meet their specific needs.
Read more: HDB flats with the best views: More than just a room with a view
Market dynamics
But this doesn’t mean buyers are blindly forking out their savings at these eye-watering price tags. In fact, now more than ever, buyers in the HDB resale market are exhibiting greater discernment and caution when making purchasing decisions.
Homebuyers are increasingly hesitant to pay higher prices and Cash Over Valuation (COV) unless specific superior attributes are present. This cautious approach reflects a desire among buyers to ensure that they are getting value for their investment in the current market climate.
As such, there is a significant decline in the number of flat buyers opting for COV. Only 15% of flat buyers opted for COV, marking a 30% year-on-year decline. This suggests a shift in buyer behaviour towards more conservative purchasing strategies.
Read more: Million-dollar HDB resale flats: What it means to you
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Price growth expectations
Analysts anticipate a more moderate price growth trajectory for the HDB resale market in 2024, influenced by various economic factors.
- Elevated interest rates: Elevated interest rates are expected to dampen price growth in the HDB resale market. Higher borrowing costs could deter some buyers from entering the market or limit their purchasing power, thereby exerting downward pressure on prices.
- Higher costs of replacement homes: The higher costs associated with replacement homes, including construction materials and labour, are likely to impact price growth in the resale market. Sellers may adjust their pricing expectations to reflect the increased costs of acquiring new properties, contributing to a more moderate price growth outlook.
Planning on selling your HDB flat? Connect with a premier property consultant today.
This article is a product of 99.co and is based on information gathered from various sources, including Singapore Business Review (SBR) and The Straits Times. The usage of these sources was done in good faith to provide valuable insights. The sources of the referenced content are duly credited and we recommend readers to refer them for a comprehensive understanding of the topic.
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