The 7.5 percent increase in non-landed mass market private housing was the largest quarterly increase since the third quarter of 2009 - driven by strong demand from upgraders of several new projects such as AMO Residence, Sky Eden@Bedok and Lentor Modern.

The average price per square foot for new projects in the suburbs is now $2,000, averaging around $1.8 million for the legal average unit size of 85 square meters (915 square feet).

With the latest cooling measures taking effect at the end of September and the increase in the medium-term interest rate for banks to calculate the maximum mortgage amount, no mass private housing for HDB upgraders has been launched yet, and the only mass project to hit the market is the Executive Condominium (EC) Copen Grand.

The response to Copen Grand was overwhelming, with 73% of the units sold on the first day at an average price of $1,300 per square foot.

The first round of 30% of the top quota for second-time buyers was filled, and those who were not selected could not enter the market until a month later to purchase the remaining units.

Among the buyers are willing to pay an additional 3% of the price to defer mortgage payments to a 1001 square foot three-bedroom unit, to temporarily avoid the immediate impact of high interest rates must pay about $38,000 more, and then expect to start paying mortgages in the future when interest rates have fallen, can save more interest costs.

From the limited supply of this single project, the elevated demand is still strong, supported mainly by the expectation of long-term home price appreciation.

The house as an investment, even if the current price and interest rates have gone up a lot, buyers still think it is worth it.

Moreover, some buyers value the affordability of the price at the moment and the future appreciation of value, and as long as they can get in, it doesn't matter if they upgrade to a smaller private home.

However, upgrading is not only limited to HDB flats to private homes or ECs, but also includes exchanging a small house for a large one, and moving from a remote location to a better location. If you have enough money, you can do all three, but if you don't, you can still choose one or two.

In the post-epidemic era, it is worth thinking about whether the need for space will be more important when people move up.

To put it another way, if the "upgrade value" from a three- or four-bedroom HDB flat to a five-bedroom flat, or from a five-bedroom flat to a five-bedroom flat in a better location, is greater than that of a smaller private home in a not-so-better location, will people who originally wanted to upgrade to a private home broaden their horizons and choose from a wider range of options, so that the entrance cost of upgrading is Will the original upgrade to private housing broaden their horizons, widen their choices, so that the entry cost of upgrading will not be so high, and at the same time achieve considerable asset appreciation?

In fact, there should be a large number of these upgraders whose primary concern is space and location, but the problem may be that there are not many five-bedroom or larger resale HDB flats that meet their ideal for upgrading today.

Let's look at the overall supply of five-room HDB flats first. According to the HDB's annual reports, the overall number of HDB flats sold by the HDB increased by 14.74% between 2014 and 2021, reaching 1,019,120 as of last year.

Among them, the cumulative increase in the number of four-room HDB flats is 16.77%, while the five-room type is 12.75%.

In other words, the number of five-room HDB flats grew by two percentage points below the overall average over the eight-year period.

This may seem small, but with a total of over 200,000 five-bedroom HDB flats, it translates to 4,000 to 5,000 flats.

There are already fewer five-room HDB flats, and if the increase continues to shrink, they will become even more scarce in the future.

Secondly, the proportion of five-room HDB resales in the overall HDB resale transactions has increased year on year from 20.22% in 2014 to 25.88% in 2021, an increase of 5.66 percentage points.

During this period, the annual increase in the number of five-room HDB resale transactions has been greater than the overall, except for 2020, when the increase was nearly 14% last year, more than double the overall.

In short, over the past eight years, demand for five-bedroom HDB flats in the resale market has grown more than the overall market, but new supply has declined.

Then there is the location of the five-bedroom HDB flats. In the past few years, five-bedroom HDB flats are no longer available in mature and centrally located areas.

The new pre-order HDB flats to be launched in November, Queenstown Ulu Pandan and Kallang Whampoa projects do not have five-room type, if you want to go to Yishun, Bukit Batok and still under construction in Tengah Newtown.

Suffice to say, there will be little new supply of five-bedroom HDB flats in established areas in the resale market, just like the single-storey and double-storey condominium HDB flats that are no longer being built.

Those who want to focus on upgrading their space and location will either have to sacrifice space or location, or else opt for older homes - with the 99-year lease of HDB flats, it is not optimal for life financial planning for 30- and 40-year-old upgraders to buy in, especially in a market cycle where prices are high overall.

The fundamental policy objective of HDB flats is to help young people to own a home. Fewer five-bedroom flats are built because the average family size is smaller and to make the overall price more affordable.

However, HDB flats are at the same time the most supplied and traded housing type in the housing market, and they are inevitably an important housing option for people at all stages of life.

The new cooling measures, which came out of nowhere, require a 15-month waiting period for buyers of off-sale private homes to buy resale HDB flats, and we now know how popular it is in the "downgrader" market, with twice as many private homeowners buying resale HDB flats between 2021 and the third quarter of this year compared to 2019 and 2020.

Singapore will continue to open up to the outside world after the epidemic, attracting international capital and talent to move up the global value chain.

This means that the local private housing market will be more closely linked to the flow of international capital and talent, and the more mass private housing, which has traditionally been dominated by local uplifters, will also be so, with more people looking over their shoulders, I fear.

In this market, large HDB flats can play a relieving role to help meet the needs of the nationals who want to upgrade.

Building more 5-bedroom HDB flats and resuming construction in mature areas to give more options for upgrading is a long-term solution worth considering.