Over the past decade, Singapore's real estate market has witnessed a notable trend: HDB address owners are increasingly inclined to purchase high-value luxury homes. Data indicates that since 2013, the number of transactions where HDB address owners purchased luxury homes priced at least 5 million SGD has more than doubled, increasing from 33 transactions to 73 transactions last year, marking a remarkable 121% surge. This trend has been particularly pronounced over the past two years, especially between 2021 and 2023, with 75% of home purchases made by HDB address owners being for landed properties, indicating a demand for larger spaces and an increase in financial capability among buyers.

While the data illustrates the growth of this trend, purchasing luxury homes priced at over 5 million SGD remains a significant challenge for HDB address owners. Given the income cap of HDB buyers (approximately 14,000 SGD per month), a 5 million SGD luxury home is often unaffordable for many. Considering the down payment and other purchasing costs, acquiring such a luxury home would require around 2.5 million SGD in cash and CPF, which may be difficult to meet even with the sale of the HDB flat.

shicheng.news

So, what motivates these HDB address owners to be able to afford luxury homes priced at over 5 million SGD? Possible explanations include some buyers gaining unexpected wealth from collective sales of HDB flats or accumulating assets through inheritance or other means. Additionally, some buyers may pool family members' assets to purchase larger multi-generational homes. The surge in million-dollar home sales over the past two years has also provided buyers with more options, enabling them to afford larger landed properties.

It's worth noting that despite the growth of this trend, the proportion of buyers who can transition from HDB flats to purchasing properties priced at over 5 million SGD remains extremely small. These buyers are typically those who have acquired sudden wealth or achieved success in their careers, enabling them to continue residing in their HDB flats while purchasing luxury homes.

Furthermore, there is a possibility that some speculative investors utilize HDB flats for investment purposes, particularly foreign investors seeking to avoid Additional Buyer's Stamp Duty (ABSD) when purchasing luxury homes. However, such situations are often difficult to verify and, if proven, may result in serious legal consequences.