• A new record has been set with 23 HDB resale units being sold for more than S$1 million in February 2021
• Over the first two months of 2021, 36 resale flats were transacted above S$1 million
• This is 350 per cent higher than that over the first two months of last year
• It is also higher than the total number of such transactions annually between 2012 and 2016

SINGAPORE — The number of Housing and Development Board (HDB) flats changing hands for above S$1 million in a single month hit a new record of 23 in February, according to flash data from real estate portal SRX released on Thursday (March 4).

Together with the 13 HDB resale units sold at that level in January, a total of 36 resale flats were transacted above S$1 million over the first two months of this year, a 350 per cent surge from just eight in the same period last year, stated SRX.

The two-month figure is also higher than the number of such units sold at that price level over a full 12-month period between 2012 and 2016, according to Ms Christine Sun, senior vice president of research and analytics of property agency OrangeTee.

According to Ms Sun, buyers have been willing to increase their offer price, and are offering to pay, on average, S$15,000 to S$20,000 cash on top of the valuation of some HDB resale flats.

“This amount can go up to between S$30,000 and $40,000 for HDB resale flats with desirable attributes like high-floor units that command good views or for flats situated in prime locations,” she said.

On average, HDB resale prices rose 1.4 per cent in February, compared to the month before. They jumped 8.3 per cent compared to February last year.

Despite the bumper crop of million-dollar sales, the overall number of HDB resale transactions fell 13.4 per cent from January this year to 2,165.

But resale volume compared to the same month last year surged 29.8 per cent. In February last year, Covid-19 was just emerging as a serious health and economic challenge.

Analysts attributed the lower resale volume in February this year to Chinese New Year as families and businesses wound down for the festivities. In 2020, Chinese New Year fell in January.

Independent property analyst Loh Kah Seng said that the sales momentum for million-dollar HDB resale flats defied the usual effect of the holiday period.

He said that such resale transactions would still be active at least in the first half of 2021 as buyers are upbeat about the projected economic recovery.

Ms Sun said that the number of million-dollar flat sales may hit a new record this year, barring further cooling measures or unforeseen circumstances.

The current record is 2020 when 82 HDB resale flats changed hands above S$1 million. In 2019, the figure was 64.

Mr Nicholas Mak, head of research and consultancy at property agency ERA, noted that the Government is keeping a close watch on the property market to ensure that price rises are sustainable.

He said this may lead HDB flat buyers to be concerned that prices in the HDB resale market could be affected if more cooling measures are introduced in the private property market.

Deputy Prime Minister and Finance Minister Heng Swee Keat had said in January that the Government is paying "close attention" to the local real estate market "to ensure that it remains stable".

Mr Mak said: “Hence, some homebuyers might be rushing to seal their purchases of HDB flats before the Government brings out the big stick.”

Ms Wong Siew Ying, head of research and content at real estate agency PropNex, said that HDB resale prices are expected to remain resilient, and could increase 3 to 5 per cent for the whole of 2021.

Some factors driving up demand for HDB resale flats include a bumper crop of newer resale flats entering the market after attaining their five-year minimum occupation period, she noted.

She also said that the oversubscription of Built-to-Order (BTO) projects could lead some buyers to turn to the resale market.

The longer wait for BTO completions due to construction delays arising from the Covid-19 pandemic could also nudge some people with more urgent housing needs to look at resale units, Ms Wong added.