Home singapore Analysis: New HDB categories may partly explain August's record 54 resale flats sold for S$1m and more

Analysis: New HDB categories may partly explain August's record 54 resale flats sold for S$1m and more

Analysis: New HDB categories may partly explain August's record 54 resale flats sold for S$1m and more
A record 54 Housing and Development Board flats sold for more than S$1 million on the resale market in AugustThe last record was 45 transactions in September 2022The number of resale flats transacted in August went up 20.3 per cent compared to JulyProperty analysts have attributed the surge in part to the different classification of new HDB flats set to take effect in 2024Experts expect demand for resale flats in mature estates to stay “robust” in the coming months

By Deborah Lau Published September 7, 2023 Updated September 8, 2023 Bookmark Bookmark Share WhatsApp Telegram Facebook Twitter Email LinkedIn

SINGAPORE — A record 54 Housing and Development Board (HDB) flats sold for more than S$1 million on the resale market in August, up from 32 of such sales in July.

Data released on Thursday (Sept 7) showed that prices are now nudging S$1.5 million for some units, with a flat at The Pinnacle@Duxton selling for S$1,480,000, close to an all-time high for an HDB resale flat.

The portal 99.co reported that a four-room flat in Tiong Bahru went for S$1.5 million in July.

In total, 2,473 HDB resale flats were transacted last month, up 20.3 per cent on the 2,056 resale units transacted in July.

Average prices of resale flats rose by 0.6 per cent in August from July, 99.co and the Singapore Real Estate Exchange (SRX) said in a flash report on Thursday.

The 54 million-dollar flats sold marked the highest volume of resale flats transacted for at least S$1 million to date. The previous record was 45 transactions in September 2022.

Bukit Merah recorded the most number of these million-dollar-plus transactions, accounting for nine of the sales, or one in six of the total.

This was followed by the central area, which covers Tanjong Pagar, and recorded eight million-dollar resale transactions in August.

Ang Mo Kio and Kallang-Whampoa towns each recorded six of such sales.

The rest of the million-dollar flats were transacted in Bishan, Bukit Timah, Clementi, Geylang, Hougang, Marine Parade, Queenstown, Serangoon, Tampines, Toa Payoh and Woodlands.

Property analysts have attributed August’s record volume of transactions in part to Prime Minister Lee Hsien Loong’s National Day Rally announcement about the different classification of new HDB flats, which will take effect in the second half of 2024.

This was even though Mr Lee made the announcement on Aug 20, leaving just 11 days of the month for the housing deals to be sealed.


At this year’s rally, Mr Lee said that new public housing projects will be classified differently from the second half of next year.

The current mature and non-mature estate classification will be phased out, and the housing authority will instead categorise new flats as Standard, Plus and Prime.

The new Plus category will be used to classify flats in “choice” locations, such as units that are near town centres or public transport nodes.

Standard flats refer to the majority of the Build-to-Order (BTO) supply, with BTO rules that are familiar to Singaporeans. Prime flats refer to Prime Location Public Housing flats, which will be renamed “Prime” when the new classification takes effect.

Existing flats, or flats that have already been booked, will not be reclassified.


Property analysts said that the announcement could be part of why resale transactions hit a new record. 

Besides changes to the classification scheme, other causes — such as the delay in HDB’s BTO sales launch for August, or buyers’ desire to avoid getting their housing units during the seventh lunar month — could have also led to the record volume of sales, experts said.

Buying a home during the Hungry Ghost Festival, which falls on the seventh lunar month for the Chinese, is considered inauspicious by some. The festival runs from Aug 16 to Sept 14. 

Analysts said that some buyers might have brought forward their purchases to the first half of August to avoid the festival, while the announcement of the HDB changes could have driven sales in the second half of the month.

Mr Eugene Lim, the key executive officer of property agency ERA Singapore, said that with the new classification, more stringent resale conditions would be imposed on prime location housing. This includes a longer minimum occupation period and a resale levy.

“More buyers who intend to live in central areas (therefore) see the urgency to purchase their units as supply of existing units will remain unchanged,” Mr Lim said.

Ms Christine Sun, senior vice-president of research and analytics at property firm OrangeTee & Tie, said: “The number of transactions climbed for a second consecutive month as buyers returned to the market after the mid-year holidays and more people obtained their HDB Flat Eligibility letters.”

Some demand may be diverted to the primary market when there is a BTO sales launch, but the delay in August’s launch could have led some buyers to turn to the resale market instead, she added.

Housing grants given to first-timers buying resale flats could have also driven the record sales, Ms Sun said.

Mr Mark Yip, chief executive officer of real estate firm Huttons Asia, said that Mr Lee’s announcement last month “may have pushed more buyers to commit as they do not want to be affected by any policy change”.

However, Mr Yip believes that buyers may also have brought forward their purchase of a resale flat to avoid transacting in the seventh lunar month.


Mr Yip said that demand for resale flats in mature estates may continue to be “robust” in the coming months, as buyers look for newer flats that do not have resale restrictions. 

He added that there may be more than 400 million-dollar flat transactions for the whole of this year due to the policy change, though this may stabilise “once there is more clarity on the new policy change”. 

The total so far for the year, including August, is 294.

Ms Sun of OrangeTee & Tie said that the impact of the reclassification may be “more apparent” from the second half of next year, when BTO flats bound by the system are launched for sale.

This is because current buyers still have the option of buying new BTO flats in mature estates that have a five-year minimum occupation period, she added. The new Plus flats would have a longer minimum occupation period of 10 years, before property-owners are able to sell the unit.


Some other findings from Thursday’s flash report were:

Compared to July, the prices of resale flats in non-mature estates increased by 0.5 per cent, while resale units in mature estates increased by 1.3 per centYear-on-year, prices of resale flats in mature estates increased by 7.2 per cent, while those in non-mature estates rose by 7.3 per centBreaking it down by estate, 59.7 per cent of the resale volume in August came from non-mature estates, while the remaining 40.3 per cent in the month were from mature estatesThe highest transacted price for a resale flat in August was a five-room flat at The Pinnacle@Duxton in the Tanjong Pagar area, which sold for S$1.48 millionIn non-mature estates, the highest transacted price for a resale unit was $1,080,888, from the sale of an executive apartment at Woodlands Street 81