In the past two years, rents and property prices in Singapore have been so high that many tenants have been crying out for help. The concerns of homebuyers have prompted Minister for National Development Lee Chee San to come to the forefront several times to explain to the public how the government will ensure that HDB flats are affordable and accessible to the people of Singapore.

However, once rents go up higher than tenants can afford or accept, they must also go down.

Estimates from property websites 99.co and SRX show that the increase in HDB rents in Singapore has slowed down in January this year.

Analysts pointed out to The Straits Times that apart from the low transaction volume during the Lunar New Year period, tenants' refusal to accept higher rents could also be a factor.

But rents are rents, what about HDB resale prices? Doesn't the recent sale of a HDB flat by a homeowner, with someone offering a price of $1.5 million, mean that HDB flat prices are only going to go up?

Not necessarily.

That's not according to Red Ant, but two experts from property sales platform PropertyGuru.

In a commentary published on Channel NewsAsia, PropertyGuru's regional manager for Singapore, Dr Tan Chee Koon, and Dr Lee Nai Kiat, Head of Real Estate Intelligence at DataTech, pointed out that while there are occasional resale HDB flats for $1.5 million on the market, no HDB flats have yet been sold at this price point.

HDB flats asking $1.5 million or more have been on the market a lot recently, including a five-bedroom HDB flat on Boon Tiong Road in Tiong Bahru.

Completed in 2014, the HDB flat is on a "very high" floor and was renovated at a cost of $150,000, according to an advertisement placed by a real estate agent on their website. Other HDB flats with an asking price of $1.5 million include Kim Tian Road in the Bishan and Tiong Bahru area.

The surge in demand for resale HDB flats is due to a combination of several factors, including

the prevalence of home working and home study during the coronary disease epidemic made people suddenly realise that their nests were really a bit small and needed more space;

the epidemic also slowed down many building projects

buyers selling their private homes flocked to the resale HDB market.

In such a situation, more and more buyers are willing to pay more than $1 million for resale HDB flats.

PropertyGuru's property market report for the first quarter of this year also shows that asking prices for resale HDB flats have risen for 17 consecutive quarters since the fourth quarter of 2018, with more resale HDB flats asking $1.5 million from 2021 onwards.

But the point is that buyers seem to understand the principle of "pay back what you ask for", as no HDB flats have yet been sold at the $1.5 million asking price.

Chan Chi Kwan and Lee Nai Chia also pointed out that the factors supporting the multi-million dollar resale of HDB flats are also fading:

One, HDB will launch a total of 23,000 pre-purchase HDB flats in both mature and non-mature HDB areas this year, which is expected to attract more first-time buyers.

Two, higher bank interest rates and an uncertain economic outlook are likely to squeeze buyers' budgets, forcing them to opt for lower-priced HDB flats.

Third, the government's property cooling measures and new measures to help first-time buyers of HDB flats are likely to reduce demand for resale HDB flats.

While it is important to ensure that HDB flats are affordable to Singaporeans in the future, Tan Chee Koon and Lee Nai Kiat also believe that it is prudent to allow HDB prices to rise in a sustainable manner in line with our economic conditions.