facebook[ST Premium] Are $1m HDB resale flats going to be ‘normal’ from now on? - Seedly

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          [ST Premium] Are $1m HDB resale flats going to be ‘normal’ from now on?

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              SINGAPORE - A record number of Housing Board resale flats changed hands for at least $1 million so far this year - and we are only half way though 2021.

              This performance would have been remarkable in any year, let alone a pandemic-stricken one that saw an upswing in property prices, which has set off concerns about home affordability.

              A total of 87 million-dollar HDB deals were inked from January to May this year, surpassing the 82 units sold for at least that amount in 2020.

              As at May 31, 389 HDB resale flats have sold for more than $1 million since the first such transaction occurred in 2012.

              All 11 priciest transactions took place in 2020 and 2021, official HDB data shows.

              May's HDB resale prices also climbed for the 11th straight month, despite tightened Covid-19 measures in the latter half that largely curtailed in-person property viewings.

              If the current trend continues, twice as many million-dollar HDB flats could change hands this year, compared with 2020.

              Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie, noted that over the last 12 months, the monthly average of million-dollar transactions has been around 13 units.

              This means there may be more than 150 million-dollar HDB flat transactions inked this year, barring further economic shocks or cooling measures, she said.

              A recent report by real estate firm Huttons Asia showed that the price gap between HDB resale flats in mature estates and non-mature estates has narrowed in recent years.

              A further reduction of the price gap could very well see another million-dollar HDB flat deal - now a rarity - inked in non-mature estates soon, said Huttons Asia director of research Lee Sze Teck.

              This is because buyers have started to look askance at decaying leases in older estates despite their amenities and accessibility, and increasingly favour new flats in younger estates, especially those that have promising transformation plans in the pipeline such as Punggol, said Mr Lee.

              "Age, or remaining tenure of a flat, plays a more important role in the value of flats, rather than its location in a mature or non-mature estate," he added.

              There has only been one million-dollar HDB flat deal in a non-mature estate so far: In January 2018, a mid-floor 177 sq m maisonette in Hougang Central sold for exactly that much.

              But in March, a two-storey, 147 sq m five-room nine-year-old HDB loft in [email protected] was sold for $910,000.

              Analysts called it a significant transaction that could pave the way for future $1 million deals in the north-east new town.

              Since 2012, 15 resale flats in the non-mature estates of Bukit Batok, Choa Chu Kang, Hougang, Jurong East and Punggol have been sold for more than $900,000, according to an OrangeTee's report in April.

              However, analysts have also pointed out that million-dollar HDB transactions are few and far between.

              Since 1990, million-dollar transactions were only about 0.05 per cent of the total 845,100 HDB resale transactions.

              While this figure has increased to 0.8 per cent in the first five months of this year, OrangeTee's Ms Sun said the growth rate is marginal, spread out as it is over the past 30 years.

              Still, the growing number of million-dollar HDB flats has stirred both resentment and envy among different people.

              That is particularly as Build-To-Order (BTO) projects - the most affordable housing option for Singaporeans - are currently facing up to a year's delay due to manpower shortages in the construction industry.

              Critics and netizens have been questioning if home prices could be increasingly out of reach for common folk, while a select group of home owners enjoy the "lottery effect" of reselling their well-located flats for high prices.

              The Government plans to build new flats in prime areas - such as the city centre and Greater Southern Waterfront - in the coming years.

              This has caused many to wonder if these flats will be the next The Pinnacle @ Duxton, where, so far, 118 units have fetched more than $1 million since completion of the minimum occupation period (MOP) at end-2014.

              To address this, National Development Minister Desmond Lee announced in December that the Government is working on a new housing model to keep these flats affordable.

              Suggestions previously raised include selling the flats with shorter leases, imposing a longer MOP, and selling them back to the HDB.

              But, noted Mr Lee, each of these suggestions has its merits and trade-offs.

              An online survey by the Ministry of National Development to gather feedback from the public is ongoing till the end of this month.

              So, here is the $1 million dollar question:

              Is this kind of price tag for HDB resale flats going to be "normal" from now on?

              Yes and no.

              Yes, because it is statistically likely that more flats will fetch more than $1 million in the coming months. In fact, 2021 will be a record year, unless the Government intervenes with cooling measures.

              But also no, because these transactions make up a small proportion of total resale deals.

              This means overall resale flat prices are unlikely to increase by too much.

              So while million-dollar deals may make headlines from time to time, there will still be many affordable resale flats in the market to pick from.

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                  Is time to cash out HDB & upgrade condo. These crazy hdb price will push up private properties market. Then govt will come in cooling measure again ...

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