New suburban condos now cost 53.6% more than million-dollar HDB flats: OrangeTee

A NEW condominium in the suburbs now costs at least 50 per cent more than a 4-room million-dollar Housing and Development Board (HDB) flat in any location. This may explain the recent rising demand for such flats, even in non-mature locations, according to an OrangeTee report released on Wednesday (Aug 31).

Just in the first 8 months of this year, the price gap between new condos in the suburbs and 4-room million-dollar flats located in all regions stood at 53.6 per cent. The price gap was just 1.3 per cent in 2019, and 0.5 per cent in 2018.

The report noted that the median price of new condos in the outside of central region is S$1.73 million, 53 per cent higher than the S$1.13 million median price of 4-room million-dollar flats in all regions. (*see Amendment Note)

With this price gap in mind, some buyers may find that million-dollar flats are “significantly cheaper” than new suburban condominiums, said the real estate agency.

Other reasons driving the demand for these flats include the declining supply of large built-to-order (BTO) flats in mature estates and the growing affluence of buyers, OrangeTee said in its market watcher report.

Buyers who wish to stay in mature estates and stay in larger units would have to turn to the resale market, as the supply of large BTO flats in mature estates has gone down.

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Only 7 per cent of BTO supply in 2021 was for 5-room and 3-generation flats, compared with 2017, where 10.9 per cent of total BTO flats launched were for these larger flat types.

In the 2022 year to date, only 3.6 per cent or 489 BTO flats launched were for 5-room and 3-generation flats, OrangeTee noted.

It also found an increasing number of million-dollar flat deals in non-mature estates. Out of the 231 million-dollar flat transactions from January to August 2022, 9 of these flats were located in non-mature estates like Woodlands (4 units), Yishun (3 units), Hougang (1 unit) and Bukit Batok (1 unit).

There was only one such million-dollar HDB deal recorded in 2018, and none from 2019 to 2021.

“As million-dollar flats in mature estates get pricier, more buyers may seek cheaper alternatives in non-mature estates which may entail similar product attributes like big floor areas or spectacular views,” said Christine Sun, OrangeTee’s senior vice-president for research and analytics.

*Amendment Note: A previous version of this story incorrectly stated the percentage difference between new suburban condos and 4-room million-dollar flats in all regions. The article has been amended to reflect this change.