Securing a home in Singapore has always been notoriously difficult. When coupled with a dense population, land scarcity results in a distressing situation that many Singaporeans face – especially the younger homebuyers. Housing & Development Board (HDB) flats are public housing units that are a dime a dozen in Singapore. They make up most neighbourhoods and they house the majority of Singaporeans, young and old. You might think that since HDB flats are so common, they’d be decently affordable, but contrary to popular belief, that doesn’t seem to be the case in recent years. Read on to find out about HDB resale prices and why these flats are rapidly becoming harder to afford in 2021.
The Influx of ‘Younger’ Flats in the Resale Market
This year, over 25,500 HDB flats are estimated complete their Minimum Occupation Period (MOP). The MOP is the period of time that you are required to physically occupy your flat, before it can be listed and sold on the open market. As such, owners of these HDB flats are scurrying to sell their 5-year old flats on the resale market, taking advantage of the fact that these flats are very new compared to flats in older estates and towns. These ‘younger’ flats with longer leases and newer conditions tend to fetch higher resale prices, making them a lucrative option for sellers and buyers alike. On that note, this drives up the market price for resale flats, which essentially results in a situation whereby the costs of owning a resale flat surges rapidly – due to both an influx in supply and an increase in demand for such flats this year.
Resale Flats in Desirable Locations
Some of these resale flats fetch sky-high prices of more than a million dollars, and although it might seem like a ridiculous price to pay for public housing, there’s some justification to that. Resale flats are usually set in neighbourhoods that are very established and more mature, as compared to the newer Build-To-Order (BTO) flats. Also, these resale flats are likely located near amenities such as shopping malls, MRT stations and bus interchanges. As such, this drastically increases the convenience for homeowners residing in these resale flats, but of course, that convenience definitely comes with a price – and a steep one at that.
Rapid Development of Infrastructure in Newer Estates
Singapore is world-renowned for its prowess and efficiency in development. In fact, Singapore is a classic example of a rags-to-riches story, and this can also be seen in the endless enhancements made to newer estates that are considered vanilla. It’s not just flats in the mature towns that are fetching high resale prices. Non-mature towns are also rapidly growing and developing in terms of infrastructure, improved connectivity and amenities. The rate of enhancement is directly proportionate to the rate of price growth, which may outpace that of mature towns. If you’re looking to buy a flat and wondering why a resale flat in a non-mature town costs similar to one in a mature town, then this is most likely the reason why.
So before you decide on which housing to purchase, you can set a rough gauge and put aside a budget while referring to the above list for HDB resale prices as of June 2021.