What buyers should understand about the factors behind million-dollar HDB transactions?

Million dollar HDB flats used to appear in the news as rare curiosities, something people would talk about over lunch as a sign that the market had gone a bit wild. Today, they have become a small but visible part of the resale landscape. There are still far more ordinary transactions than seven figure ones, but the frequency of such deals is high enough that serious buyers can no longer dismiss them as anomalies. The real question is not whether these prices are ridiculous, but what exactly buyers are paying for when they agree to a million dollar HDB deal.

If you think of a million dollar flat as a lottery ticket, it will always feel inflated and irrational. If you see it instead as a specific product within a tightly regulated system, the logic starts to appear. These flats sit at the intersection of several powerful forces. There is the long term effect of land scarcity in a compact city, policy rules that shape supply and eligibility, demographic shifts that have created a larger pool of asset rich households, and the evolving role of HDB units in central locations as substitutes for private housing. When these factors combine in a single unit with rare attributes, hitting seven figures becomes less surprising.

The obvious starting point is physical attributes. Million dollar HDB resale flats almost always have a strong basic profile. They tend to be larger units, in blocks that are relatively young, with high floor locations and unblocked views. Proximity to MRT stations, town centres and employment hubs is common. These are the same features that drive value in any major city, whether you are looking at public or private housing. What is different in the HDB context is that policy design limits how many such units can be built in each town, and when they can enter the resale market. This amplifies the value of each individual flat that ticks all the boxes.

Location patterns tell a similar story. These million dollar deals are heavily concentrated in a small group of mature, centrally located towns such as Kallang Whampoa, Toa Payoh, Queenstown and Bukit Merah. In some of these areas, especially for larger flats or those within walking distance of the central business district, a price close to or above a million dollars has become a new reference point rather than a once in a decade outlier. In other words, the number is less about a single extraordinary block and more about how the market is repricing access to central land, space and connectivity.

Supply dynamics make these units even more contested. Resale volume is not simply a matter of how many flats exist. It is constrained by policy rules such as the minimum occupation period, income ceilings, and eligibility criteria for certain flat types. In years when fewer younger flats clear their occupation requirement, there are fewer attractive units available in prime locations. Demand, however, does not fall in sync. Households that want to move closer to the city, shorten their commute, or secure a place within a favoured school zone still need somewhere to buy. When a rare flat with the right mix of age, size and location appears, competition pushes the price upward and million dollar offers become a natural outcome of that bidding process.

Within the same block or precinct, not all units are equal. This is where buyers sometimes make the biggest mistake by focusing only on the headline price and ignoring the micro level attributes that justify or undermine it. In many high profile transactions, the unit sold is one of only a few stacks with a certain orientation, natural light and cross ventilation. It may enjoy an unblocked view over a park or water body, or be shielded from road noise in a way that neighbouring stacks are not. Some million dollar flats are part of older layouts that are no longer being replicated in new projects, for instance jumbo units or uniquely spacious five room designs. Others sit at an unusually convenient crossroads, within walking distance of multiple MRT lines, major bus routes and an established network of amenities.

Remaining lease is another structural factor that serious buyers pay attention to. Singapore’s public housing system is built on 99 year leases, and the market has become increasingly conscious of lease decay. Banks, the CPF system and individual buyers all take into account how many years are left when deciding on financing, usage of CPF funds and valuation. Million dollar transactions tend to involve flats with ample lease runway, usually in a range that still feels safe for the next generation of buyers. A strong remaining lease is not a cosmetic detail. It is a key part of what you are paying for, because it preserves future financing options and broadens the potential resale pool later on.

It also helps to understand who is buying. The stereotype of the reckless young couple overstretching for a prestigious flat is not always accurate. A growing share of buyers at this price point are families who have already benefitted from capital gains in the private market. For someone selling a suburban condominium that has risen sharply in value, shifting into a centrally located HDB flat can be seen as a way to protect capital while upgrading lifestyle. They may get more usable space, better transport connectivity and shorter commuting hours, all while keeping their loan quantum manageable. Their mental benchmark is not what the flat cost originally when first sold by HDB, but what a similar lifestyle would cost if they stayed in or moved to a private apartment in a comparable location.

That perspective leads to a broader observation. In many global cities, a seven figure price for a central apartment is unremarkable. What makes Singapore unusual is that some of these apartments are publicly built, sold under a framework designed for broad based affordability, and come with rules about ownership and resale. When certain HDB flats begin to trade like private stock in pricing terms, it reflects decades of accumulated value in land and infrastructure. It also signals that there is now a segment of HDB that behaves like a quasi private asset within public rules. For buyers, the challenge is to recognise when they are dealing with such a segment and to weigh the trade offs clearly.

Policy is never far in the background. Changes to how new flats are classified, adjustments in loan to value ratios, tightening of private property cooling measures and shifts in HDB grant structures all shape demand for resale flats. There have been periods when buyers rushed to secure well located resale units ahead of new rules they anticipated or in response to loan curbs in the private market. When policy changes redirect demand into a fixed pool of resale flats in mature estates, prices can spike. If buyers attribute this entirely to sentiment or fear of missing out, they may misjudge how durable the new price level will be.

From a practical point of view, the most useful approach is to strip away the glamour of the million dollar label and conduct a calm assessment. Instead of asking whether the price feels outrageous, ask how many units with similar attributes exist within a reasonable radius. Look at how many comparable flats will reach their minimum occupation period in the next five to ten years, which would increase supply. Distinguish between attributes that future buyers will continue to pay for, such as central location, strong transport links and generous layouts, and features that are easily replicated, such as interior renovations that reflect current tastes.

Liquidity is another consideration. Even though there are more million dollar flats today than in the past, they still form a small fraction of total resale transactions. This means the buyer pool is more specific and sensitive to economic and policy conditions. A flat that draws demand from multiple groups, such as families wanting to live near the city, aging parents who value proximity to healthcare, and young professionals seeking shorter commutes, is more likely to retain liquidity than one that appeals to a narrow group for highly niche reasons.

There is also a portfolio angle. Committing a million dollars to a single HDB flat concentrates a large share of household wealth in one asset. For some families, especially those who prize location and predict they will live there for decades, this concentration may be acceptable. The time savings from shorter commutes, access to better schools, and the daily convenience of a mature town can all translate into benefits that are hard to quantify but very real. For others, especially those who value future flexibility or have other financial goals such as education, business ventures or early retirement, parking so much capital in one property may crowd out other investments. The key question is not whether a million dollar flat is objectively good or bad, but whether it fits a deliberate strategy for the household’s overall balance sheet.

Finally, buyers should remember that the state pays close attention to these trends. Public housing is central to Singapore’s social compact, and sharp rises at the top end of the resale market can feed perceptions of inequality or eroding affordability. If the authorities judge that speculative behaviour or excessive pricing is threatening broader trust in the system, they have a range of tools that can be deployed, from loan restrictions to supply adjustments and further policy refinements. That does not mean prices for prime units will collapse overnight, but it does mean that anyone buying at a record price should be humble about assuming uninterrupted gains.

In the end, a million dollar HDB flat is not just a piece of property. It is a bundle of policy decisions, urban planning choices, demographic shifts and market psychology, all crystallised in one address. For buyers, the task is to look past the headline number and understand the real forces at work. If the unit you are considering sits at the intersection of sustainable demand drivers, fits your portfolio, and serves your family’s long term needs, the price may be defensible. If it relies mainly on bragging rights or a hope that the next buyer will be even more desperate, it is worth stepping back. The last buyer’s willingness to pay tells a story, but it is only by understanding the factors behind that decision that you can decide whether to write the next chapter.