THE Council of Estate Agencies (CEA), a body under the Ministry of National Development (MND), is investigating the recent resale listings for two Housing Board flats for being “misleading” and “unrealistic” in their asking prices of S$2 million.
The listings were for a 1,258 square feet (sq ft) five-room flat in a Design, Build and Sell Scheme (DBSS) project in Toa Payoh, and a 2,400 sq ft Sengkang “jumbo flat”, supposedly with six bedrooms and four bathrooms. Both units, listed at S$2 million each, had sparked an outcry on the Internet, with many expressing disbelief at their outrageous prices.
In a joint statement on Wednesday (May 8), MND, HDB and CEA said the listing for the Sengkang flat is misleading because there are no jumbo flats in the area.
The statement said: “The ‘jumbo flat’ listed is actually two adjacent five-room flats, which are not eligible to be converted into and sold as a single unit.
“Furthermore, the listing price for the ‘jumbo flat’ is well above the recent transacted prices in the precinct.”
In the last six months, five-room flats in the Sengkang precinct transacted for around S$580,000.
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The priciest transaction in the Anchorvale Link estate, where the so-called “jumbo flat” is located, was for a 125 square metre executive premium apartment, which changed hands in February for S$810,000, noted Christine Sun, chief researcher and strategist at OrangeTee Group.
All transactions made last year in the same block as the Sengkang “jumbo flat” were below S$550,000, she noted.
“The S$2 million listing price is therefore more than S$800,000 above the combined value of the two five-room flats,” said the authorities.
CEA has since brought the “misleading advertisement” to the attention of the agent’s property agency, and is looking into the matter. “(The agency) will take firm action if any breaches are established.” The listing has since been taken down.
The government agencies, noting also in their statement that the S$2 million listing price for the flat in Toa Payoh was nearly S$500,000 higher than the highest transacted price in the area, said: “Many property market experts are of the view that this is an unrealistic asking price, even for a DBSS flat with attractive attributes.”
“Currently, there is no Intent to Sell registered with HDB for this particular flat, which means that the potential seller/s of this flat are not able to grant any Option to Purchase at this stage.”
The current listed prices of both flats also come with significant cash-over-valuation, which is the sum to be paid upfront in cash, the authorities noted. “While resale transactions are on a ‘willing buyer-willing seller’ basis, prospective buyers are strongly advised to evaluate their finances and housing options carefully, and be rational and prudent in their decision, especially in the current economic and geopolitical climate.”
For instance, seven in 10 five-room or smaller resale flats transacted at below S$600,000, before grants, in 2023.
And when the median grant of around S$80,000 is factored in, the figure is actually eight in 10, the government agencies pointed out.
Across the 26 HDB towns and estates, the median resale price of four-room flats – the most common flat type – was S$600,000 after accounting for the median housing grant. In 14 HDB towns and estates, the median resale price was in fact under S$500,000.
“We should not expect housing prices to increase indefinitely amid global economic uncertainty and geopolitical instability,” they added.
MND, HDB and CEA emphasised the important role that property agencies and agents play to “uphold the integrity and professionalism” of the real estate industry.
“To protect the interests of the public and promote information transparency to facilitate informed decisions by prospective buyers, CEA will also look into the information presented by property agents when they market HDB flats,” they said.
Million-dollar HDB homes
Checks with the property portal PropertyGuru by The Business Times showed eight resale listings of public housing flats, including HDB shophouses, with an asking price of S$2 million or more.
Excluding the shophouses, there were just two units listed at above that price:the flat in Toa Payoh, which received its Temporary Occupation Permit in 2012, and a five-room premium apartment in Tiong Bahru, which was listed on Apr 26 at S$2.25 million. The 1,750 sq ft unit was described as a “rare conservation” flat built in 1938.
Meanwhile, a five-room resale flat in Bukit Merah was sold for S$1,588,000 last week, making it the most expensive HDB resold in Singapore to date.
Some property analysts say it is appropriate for the government to clamp down on “attention grabbing” listings with “unreasonably high asking prices”.
“(These listings) may distort market expectations and lead to more sellers pushing up their asking prices,” said Sun from OrangeTee.
Nicholas Mak, chief research officer at Mogul.sg, added that it may also give homebuyers a false impression that property prices are rising rapidly.
“Therefore, there is a need for the authorities to put a stop to such marketing tactics,” he said.
Still, the government agencies highlighted in the statement that resale flats that transact at a million dollars or more form a small minority of all resale transactions.
“They tend to have favourable locational and flat attributes, for example, being near the city centre, MRT stations or amenities, or being larger units,” they said. “These cater to a small group of Singaporeans with unique preferences and better financial means.”
In 2023, more than eight in 10 first-timer families who bought new flats or resale units had a mortgage servicing ratio of 25 per cent or less when they collected their keys, the authorities noted. “This means they can service their monthly HDB loan instalments with their Central Provident Fund contributions, with little to no cash outlay.”
