[SINGAPORE] Looking for a five-room Housing & Development Board (HDB) resale flat on a high floor that is under ten years old in the Queenstown area? You may need to budget about S$1.5 million.
A search on HDB’s data showed a premium loft unit on the 22nd to 24th story of Block 92 Dawson Road, with remaining land lease of over 89 years and size of 122 square metres (sq m), was transacted in June at about S$1.66 million.
Meanwhile, several five-room flats along Dawson Road, with remaining land lease of over 94 years and size of 107 sq m, were transacted at S$1.4 million or more each this year. One unit on the 28th to 30th story of Block 79 Dawson Road fetched around S$1.47 million.
In perspective, paying S$1.5 million for a home works out to around 6.3 times the annualised average monthly household income including employer CPF contributions of the eighth decile of resident employed households of S$19,948 in 2024.
Certainly, very few HDB resale flats fetch close to S$1.5 million each. And one may need to budget S$1.5 million for a resale condo unit of around 70 sq m near Dawson Road.
Still, HDB resale flats have generally gotten far pricier these days. The HDB Resale Price Index – which tracks the overall price movement of resale flats – rose by 52.9 per cent from 131.5 in Q4 2019, pre Covid-pandemic, to 201 in Q1 2025. And the proportion of resale flats transacting at over S$1 million dollars each is generally rising, with some analysts expecting up to 1,500 such deals this year.
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Is a strong HDB resale market, with more transactions of at least a million dollars, a cause for consternation or celebration? I see various positives to having a buoyant HDB resale market.
Wealth effect
One, many Singaporeans are HDB homeowners who intend to live in their homes for years with no intention to sell, even if they are constantly pestered to do so by overzealous property agents.
An owner occupier of an HDB flat, which appreciates in value, will enjoy a positive wealth effect and be able to consume with greater confidence. In turn, private consumption is a key driver of the economy.
Think of the many food and beverage sector jobs, for example, that are supported by local residents dining out. Or how the spending of local residents on everything from home improvement and wellness to enrichment classes supports jobs.
Also, robust HDB resale flat prices help provide a strong base for the housing pyramid here. Ultimately, having firm housing prices in general helps ensure a healthy financial system as home loans are a vital part of the loan books of major lenders here.
Importantly, Singapore is a global city that attracts numerous wealthy people from Asia and elsewhere, many of whom go on to become its permanent residents (PRs) and citizens.
Letting many Singaporeans enjoy asset appreciation from their HDB homes can help locals deal with possible issues of envy and resentment that may arise from living in a city where some experiences are well beyond the financial reach of the general public.
Condo upgrading
Two, a strong HDB resale flat market supports many locals in pursuing their condo ownership dreams.
That many young locals aspire to own condos is positive. After all, economic growth is driven by people working hard to chase material aspirations instead of lying flat and being content.
Many Singaporeans use gains from selling an HDB Build-To-Order (BTO) home after the minimum occupation period to help buy condo homes. Indeed, for some young locals, recycling gains from selling a BTO home to buy a condo home can help them catch up with peers who received parental help to get into condo ownership.
Moreover, the economy gains when there is healthy demand for new condos as this supports the livelihoods of developers, contractors and property agents, among many others. The state, too, benefits from selling land for building private homes, with proceeds from state land sales accruing to past reserves.
Funding for retirement
Three, the owned-HDB flat is the single most important financial asset for many Singaporean households.
The fact that HDB flats rise in value and have a ready market of buyers gives owners financial options. For example, a flat can be sold to raise funds to deal with a family emergency, fund a business venture or finance a child’s higher education overseas.
Crucially, with rising life expectancy, seniors can raise funds by selling their HDB home to better ensure financial adequacy in their retirement years. For one, an elderly person will likely raise a substantial amount of cash by selling a four- or five-room HDB home and buying a short-lease two-room flexi flat or community care apartment from HDB.
Meanwhile, elderly HDB flat owners who aim to leave a financial legacy to their family members, can draw much satisfaction from knowing that they are gifting a valuable flat upon their demise.
Doubtless, rules governing the eligibility of buyers of HDB resale flats can be tightened if the goal is to bring down HDB resale flat prices and improve their affordability.
Should PR households be restricted from buying HDB resale homes? What about imposing an income cap on buyers of all HDB resale flats? Or instead of possibly relaxing the wait-out period, applying a much longer wait-out period before former private homeowners can buy an HDB resale home?
Nonetheless, while many people may hope for cheaper HDB resale flats, I think having a strong HDB resale flat market offers various positives and is well worth cherishing.
May the HDB continue to provide many locals a good start in their homeownership journeys with affordably priced BTO homes in a wide range of locations including centrally located ones. Concurrently, may HDB flat owners enjoy the wealth effect and the greater financial options afforded that come with owning a home which rises in value despite its remaining land lease gradually running down.
