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The cost of resale HDB apartments remains one of the hottest topics in Singapore and a source of anxiety for many Singaporeans. A growing number of apartments are selling for over S$1 million, though the first such transaction was recorded already back in 2012.
For much of the past 13 years, these sales have been more of an exception than the norm. However, that has begun shifting together with the acceleration of global inflation in 2022 and the spike in local demand for spacious housing following the experiences of the pandemic and the popularity of work-from-home arrangements.
From under 1% as recently as 2022, the share of million dollar transactions has steadily increased, multiplying to over 6% in early 2025, already doubling compared to 2024.
2024 saw 1035 million dollar HDB homes sold, while 760 such transactions have already been recorded in just the first six months of 2025.
What’s more, additional 21% fall within the range of over S$750,000 to S$1 million, meaning that, at the current pace, they too could soon cross into the million and over category. That’s over a quarter of resale HDBs.
There’s really no reason to fret, however, because a gradual rise of housing prices is not only largely beneficial but in many ways even necessary for the entire system to work as intended.
The natural state of the economy
Just like today we’re watching prices creeping over six figures, 45 years ago we saw them approach five figures for the most expensive executive apartments offered by the government.
While it’s not the resale market per se, those were the price tags before the BTO era and back then, the prices between primary and secondary markets did not differ too much.
This table is from mid-1979 and, at the time, the median household income of a Singaporean household was under S$990, compared to S$11,297 today (nearly 12 times more).
Over the years the prices of comparable apartments on the market have also increased by a factor of 10 or more. Erstwhile S$50,000 has become S$500,000 and S$100,000 is now S$1 million and above.
That said, living standards have greatly improved since then as well. Would you like to go back to the 1980s, with outdated construction standards (including barely any lifts), no MRT network connecting HDB towns, very limited facilities and much, much lower pay?
As incomes have gone up in tandem with housing, it’s their proportion to the price of the flat that really matters. This is why, with median transacted prices of under 5 times the annual household income, Singapore’s HDB market is the second most affordable anywhere in the entire Asia-Pacific (and, really, the world, since few major developed cities come even close).
The median transacted price for a resale HDB in 2025 is around S$630,000.
It has to increase by another 59% to cross S$1 million. But if household incomes do the same, reaching around S$18,000 per month, will it really matter? Relative affordability of HDB housing is going to remain the same.
It’s taken just 13 years for them to rise by that much, from over S$7,000 in 2011 to over S$11,000 in 2024. So, we could be looking at million dollar apartments becoming the norm by mid to late 2030s.
Inflation eats the value of money—including your debts
While we’re talking about the negative impact that inflation has on the economy and the value of our incomes, it’s easy to forget that it cuts both ways. And if you happen to be in debt, you’re going to welcome the rapid increase in value of the asset you purchased with the borrowed money.
This is particularly beneficial for housing, since few people pay the full price in cash and mortgages are the cheapest loans on the market.
Inflation in apartment prices—especially when, like now, consumer inflation is under control—greatly benefits borrowers and helps them repay dues earlier or at least makes their burden relatively lower with time.
Since vast majority of Singaporeans already own their homes, and about 80% live in HDBs, they should welcome the ongoing price rally. At the same time, those who are trying to buy and complain about how expensive it has gotten, should actually hope it is going to continue, so they can benefit from it in the end as well.
Especially as housing is a critical element of retirement planning.
The backbone of your pension
As costs of life rise over time, the last thing you want is the value of your property to remain flat. On the surface, it might seem like it shouldn’t matter. You live in one place and it doesn’t really affect you how much it’s worth.
However, most retirees might be willing to downgrade from a large home to a smaller one once their kids are out of the house, and use the difference in price to supplement their pension. And, contrary to popular belief, lease decay doesn’t erode the value of HDB homes as much as believed, with some homes with barely 50 years on their lease left selling for seven figures in recent years.
Dropping from a 1000 sqft. apartment to 700 sqft. at roughly the same per foot price, should net them a 30% difference. At S$1 million it’s S$300,000 but at S$600,000 it’s just S$180,000.
Under low price conditions, their new apartment would be considerably cheaper, but their net gain much smaller, leaving them with less money in their silver years.
Of course, if we could freeze the prices of everything in the market, it would not matter at all. But, as I said, consumer goods and services get gradually more expensive with time. We all know this.
If apartments do not follow—or, even better, outpace—their prices, then Singaporean pensioners hoping to rely on their homes for an extra windfall after they stop working will be left tens or hundreds of thousands short.
And since everybody is going to retire one day, you should hope that resale HDBs continue to appreciate.
The perfect balance
Paradoxically, it’s not in the public interest for apartments to become either very cheap or very expensive. The sweet spot is somewhere around four to five times of the annual household income.
Ideally, they should follow incomes (so that every new entrant faces the same relative conditions as his parents did) and grow at least a bit faster than consumer prices (so that the money, once you monetise your apartment in part or in full, can buy you more than before).
If housing became cheaper over time, it would eat into the wealth of pensioner households. Conversely, if it became more expensive, it would lower the living standards and purchasing power of younger generations, who will be forced to pay a greater share of their incomes on accommodation.
Of course, short term fluctuations over a few years are bound to happen, but as long as they are smoothed out over the longer term, this important balance is maintained.
Which is why it’s not the absolute price that’s important.
It doesn’t matter if a flat costs S$1 million or S$2 million, or even more at some point in the future—but how these prices evolve in relation to incomes and consumer prices. And that their relationship remains stable over time.
- Read other articles we’ve written on Singapore’s current affairs here.
Featured Image Credit: lteck/ depositphotos
Great Job Michael Petraeus & the Team @ Vulcan Post Source link for sharing this story.
