Singapore’s US$1.3 million flat reignites debate on home affordability

A 111-square-metre public housing flat sold for a record S$1.73 million (US$1.28 million) in Singapore this week has reignited debate about home affordability in the city state, with analysts warning that efforts to cool down the public housing market may take much longer.

Political observers told This Week in Asia even if such eye-watering transactions for public housing were rare, they could fuel perceptions of government-built homes being unaffordable, a view that may resonate with some voters.

On Monday, local media reported that the 45th-floor Margaret Drive unit broke the record for the most expensive Housing and Development Board (HDB) resale flat in Singapore.

About four-fifths of the resident population in Singapore live in public housing.

The S$1.73 million flat had 96 years left on its lease as its owner did not have to wait the typical five-year period before selling the flat since it was a Selective En bloc Redevelopment Scheme replacement flat. This means the homeowners could sell their unit seven years from the date of the flat’s selection or five years from the date of key collection – whichever is earlier.

The transaction price surpassed that of a five-room unit at City Vue @ Henderson, which sold for S$1.59 million last month.

Resale prices of public housing flats have been on the rise. Data from HDB on July 1 showed that prices of flats climbed 2.1 per cent in the second quarter of 2024, up from the 1.8 per cent growth in the previous quarter. It was the 17th consecutive quarter where prices increased, dating back to the second quarter of 2020.

To deal with rising prices, the government has been ramping up supply of new flats and introduced measures to curb the outsize profits from public housing. This