SINGAPORE — Only 0.3 per cent of Housing and Development Board (HDB) resale flats have transacted above S$1 million, National Development Minister Desmond Lee said.  

Mr Lee was responding in Parliament on Wednesday (Oct 14) to Mr Gan Thiam Poh, Member of Parliament at Ang Mo Kio Group Representation Constituency (GRC), who asked whether the Government plans to address “pent-up demand” seen by the record sale prices of some HDB flats in mature estates. 

TODAY earlier reported that there were eight HDB resale flats that sold above S$1 million in the month of September, based on data from real estate portal SRX.

Mr Gan said that such transaction prices may create anxiety.

Mr Lee said in response that headline-grabbing articles on HDB flats transacting at more than S$1 million may have given some people the impression that there is “very, very high demand” overall and that prices are escalating significantly. 

Such transactions, however, are a “small minority” with only 38 out of over 14,400 HDB resale transactions between January and August this year crossing the million-dollar mark, he disclosed. 

He added that HDB will continue to monitor housing affordability in the resale market, as well as newly built flats known as Build-to-Order (BTO) flats. 

Mr Lee also assured the House that there is a sufficient supply of homes for homeowners, with the Government building 14,600 BTO flats last year and another 16,700 flats being built this year. 

In response to Mr Gan’s question on how the authorities price BTO flats, Mr Lee said that the HDB first establishes the market value of the flat using factors such as the prices of comparable resale flats nearby, individual attributes of the flats and the prevailing market conditions. 

A subsidy is then applied to the market value of the flat so that new flats are priced “at a significant discount to the market”. 

This approach is used for flats in both mature and non-mature estates.  

In illustrating the affordability of BTO flats, Mr Lee said that prices are five times the median annual income for Singaporean households or less. 

Flat prices in major cities in other countries can be 10 or 20 times of the median annual household income, he added.