Property Herald: A two-tier HDB resale market

Introduction

The flash estimates of the HDB price index for 3Q 2026 slipped by 0.2% quarter-on-quarter (qoq), cumulating in a 0.6% decline in the public housing price index. This is the third consecutive quarter of price contraction and is the longest period of decline in the index since 3Q 2018.

A two-tier HDB resale market

While the overall prices of HDB resale flats weaken, as indicated by the resale price index, the high-end public housing sector is growing from strength to strength.

Based on available information, there are 575 HDB flats transacted at $1 million or more each in 3Q 2026, a 17.1% rise over the number of million-dollar resale flats in the preceding second quarter.

At the same time, the number of HDB resale flats sold for at least $1.5 million each increase by 60% qoq to 24 units in 3Q 2026.

The rising number of transacted million-dollar resale flats feed into the information loop, prompting sellers to raise their asking prices. An infamous example is the owner of a jumbo flat at Telok Blangah asking for $2.18 million for the flat. The owner subsequently lowers the asking price to $2 million following the media limelight.

Enbloc sale of ageing condo projects will spur demand for bigger flats

Although the authorities said that it has not observed any significant increase in the prices and number of resale flats purchased by private residential property owners (PPOs) and ex-PPOs, since the 15-month wait-out period for PPOs and ex-PPOs buying non-subsidised HDB resale flats was removed on 28 July 2026, we believe that it will take time for the effect of this policy relaxation to materialise.

The removal of the 15-month wait-out period would moderately increase demand for HDB resale flats in the next few years, especially when the enbloc sale of some ageing 99-year leasehold condominium developments are eventually concluded. The relaxation of the level of owners’ consensus to launch the enbloc sale from 80% to 70% is becoming a shot in the arm for the enbloc sale efforts for many ageing condominiums.

The owners of these ageing 99-year leasehold non-landed projects will receive lower sale proceeds than the owners of freehold condominiums because the developers must pay the government substantial amount of taxes in the form of land betterment charges and to top up the lease of the land to a fresh 99-year lease.

After receiving the payout from the enbloc sale of their 99-year leasehold condominium, which could be less than $3 million for each unit, some owners may purchase a HDB resale flat as their next homes due to the flats’ affordability. As these condominium owners are used to living in large format housing units, they are likely to acquire larger flats, contributing to the rise in the demand for larger flats.

HDB market outlook

The HDB resale price index could decline for another quarter as the traditional lull period in the last quarter of this year would lower demand and transactions in the HDB resale market.

However, in the absence of sustained economic weakness and consistent government intervention, the HDB resale prices is not expected decline for the whole of 2027. Hence, we expect the HDB resale prices stage a gradual recovery after reaching the bottom of this price cycle in 1H 2027.