Million dollar HDBs are coming to the market because the system is working as designed

Disclaimer: Unless otherwise stated, any opinions expressed below are solely the author’s.

The headlines will tell you that Singapore’s property market is finally cooling down. At the start of 2026, the HDB resale price index fell by 0.1%, showing a long-awaited respite for weary buyers.

But don’t drink the champagne just yet.

At the same time, million dollar public housing transactions rose more than 17% quarter over quarter. In mainstream, mature areas, seven-figure price tags are no longer surprising—they’re becoming the norm.

But it’s not inflation, and it’s not the failure of the public housing system. It’s a system that does exactly what it was designed to do.

In fact, a drop in price appreciation may not be something to be happy about at all.

More than home

Singaporeans who complain about rising prices are often found among consumers, not sellers. And only those are forced to buy their homes on the resale market, rather than directly from the government, as BTOs come with significant discounts.

In fact, as long as you already own an apartment, then relative price movements do not affect you much, as the tide lifts all boats. You buy more but you also sell more.

However, since the inception of the HDB scheme, the government has not only seen it as a way to provide affordable housing for all Singaporeans but as an appreciating asset to add to your pension in retirement.

The logic is very simple: they tend to start a family in a larger apartment, suitable for two adults with children, and then buy their own when they’re older, making downsizing an attractive option for older parents.

As long as the house increases in value in line with or above normal inflation, the difference you take out from buying a smaller, cheaper apartment can grow and add to your retirement income—either directly or through an increase in CPF, which can earn you an additional government grant.

Once we accept that prices must continue to rise, then it is inevitable that they must reach the million dollar mark at some point.

In fact, some are approaching S$2 million already, such as the recent record-setter in Bukit Merah, which sold for S$1.728 million with 92 years left on its lease. Expect to see more of those each year.

Apartments exceed income for less than you think

Between 2015 and 2025, the Resale Price Index increased by approximately 50.7%. During the same period, median housing market income rose 42.7%, compared to a cumulative inflation of 19%.

So, yes, Singaporeans are paying more for housing compared to ten years ago, but not by much, only 8%.

Now, consider the opposite scenario: what would happen if housing prices stayed at the same level and the conditions were the same?

It can be really helpful for second-hand HDB buyers, but the elderly may lose about 1/5th of their nest egg, eaten away by inflation. It would be no reason to celebrate. Instead, it will suggest that the program has failed those it was supposed to help when they really needed it.

After all, new entrants still enjoy the benefits of BTO and make a huge profit between the starting price and the MOP. Seniors, at least, can get a CPF allowance of up to S$40,000, which will not cover their losses.

Therefore, the ideal range in which HDB resale prices should fluctuate is above inflation but below wages. This is where all Singaporeans benefit. Those who are still working can afford bigger, better homes, while those who are retired can get more value for theirs.

10 years ago, that range would have fallen between 20 and 42%—slightly below the record 50.7%. But even so, the number of million dollar apartments hitting the market will still be high, and growing every year.

It cannot be avoided.

And there is no reason to complain, because one day, this endless march to the top will benefit you too.

• Read other articles we have written about current affairs in Singapore here.

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