Authorities flag two S$2M HDB flats listings as misleading, unrealistic asking price

SINGAPORE: The authorities have identified two HDB flats listed for sale at S$2 million each that have raised concerns.

One listing, marketed as a jumbo flat, comprised two adjacent five-room flats in Sengkang. The other, located in Toa Payoh, had an “unrealistic asking price.”

In a joint statement on Wednesday (8 May), the Ministry of National Development (MND), the Housing Board, and the Council for Estate Agencies (CEA) announced that CEA is investigating the listings posted by two property agents.

The listing on the PropertyGuru platform, claiming to be for a 2,400 sq ft jumbo flat in Block 314C Anchorvale Link with six bedrooms and four bathrooms, was deemed “misleading” by the authorities, as there are no such flats in the block.

The address stated in the listing, Blk 314C Anchorvale Link, does not have existing jumbo flats, added the statement.

The authorities noted that the listing price of S$2 million for the “jumbo flat” was significantly higher than recent transacted prices in the precinct.

“Over the last six months, 5-room flats in the precinct transacted for around S$580,000. ”

“The S$2 million listing price is therefore more than $800,000 above the combined value of the two 5-room flats,” the joint statement noted.

Upon CEA’s notification of the misleading advertisement, the property agent removed the listing, as confirmed by the agent’s property agency.

“CEA is investigating the matter and will take firm action if any breaches are established,” affirmed the authorities.

Toa Payoh 5-Room DBSS flat listed at ‘unrealistic’ S$2M

MND, HDB, and CEA further addressed the recent listing of a 5-room Design, Build and Sell Scheme (DBSS) flat at block 138B Lorong 1A Toa Payoh.

Priced at S$2 million, the listing stands nearly half a million dollars above the highest transacted price in the area.

The listing, posted on 16 April, touted the flat as on a “super high floor” with “unblocked city view”.

DBSS flats, though built by private developers on land acquired from HDB, retain their classification as HDB flats. However, the scheme, initiated in 2005, has been suspended since 2012.

The joint statement acknowledged that the agent who listed the flat had promoted it as a value-for-money proposition.

Nonetheless, despite the unit’s attractive attributes, the three government bodies highlighted that many property experts deem this assertion unrealistic.

“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 (OTP) at this stage,” MND, HDB and CEA said.

They also underscored the importance for property agencies and agents to uphold the integrity and professionalism of the real estate industry.

Moreover, the authorities highlighted the ethical responsibility of industry players to act in the best interests of both their clients and the public, including prospective buyers.

“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” said the authorities.”

Authorities: Minority of HDB resale flats transacted at S$1 million or more

The three government bodies noted that in 2023, over 80% of first-timer families receiving keys to new or resale flats had a mortgage servicing ratio (MSR) of 25% or lower.

This indicates their ability to cover monthly HDB loan payments with CPF contributions, minimizing cash outlay.

However, considering current listed prices, the DBSS flat and two 5-room flats in Sengkang will incur significant cash-over valuation (COV), necessitating upfront cash payment.

The authorities further defended that resale flats transacted at S$1 million or more form a minority.

They attribute this to factors such as prime locations and proximity to amenities and MRT stations, catering to Singaporeans with distinct preferences and stronger financial standing.

Prospective buyers are strongly advised by MND, HDB, and CEA to assess finances and housing options diligently, exercising rationality and prudence in purchasing decisions.

MND, HDB and CEA strongly advised prospective buyers to evaluate their finances and housing options carefully and be rational and prudent in their purchasing decisions.

“While the HDB resale market transacts on a ‘willing buyer-willing seller’ basis, the Government will not condone behaviour, whether by agents or sellers, that seek to disrupt the market or fan consumer sentiment,” said the authorities.

“We should not expect housing prices to increase indefinitely amidst global economic uncertainty and geopolitical instability.”

470 HDB resale flats sold for at least S$1 million in 2023

In March, a total of 61 flats exchanged ownership for at least a million dollars, constituting three per cent of the overall resale transactions for that month.

In April, 68 HDB resale flats were sold for at least $1 million each, surpassing March’s 61 transactions.

Among these, 24 were four-room units, 22 were five-room flats, and 22 were executive apartments.

In 2023, there were 470 HDB resale flats sold for at least S$1 million, up from the 369 units sold in 2022, as disclosed by data from the Singapore Real Estate Exchange (SRX) on 7 January.

These million-dollar transactions constituted approximately 1.8% of the total resale transactions in 2023.

According to statistics released earlier by the HDB, the prices of HDB resale flats experienced a more modest increase of 4.9% in 2023, compared to the substantial 10.4% surge observed in 2022.

Last month, a five-room flat at 9B Boon Tiong Road was sold for S$1.588 million, setting a new record for the highest-priced HDB resale unit in Singapore.