The 1 Million Dollars HDB Flat Prediction

The Oracle often met up for coffee dated back to the early 1990s. The range of conversation topics were wide. One of my favourite was predicting the future of our country. We did not have a strict genre. We foresaw the emergence of LAN gaming shops before it happened, the death of extra small home based SMEs. A few days ago, our 1 Million Dollars HDB Flat prediction was fulfilled. Hopefully what we spoke about regarding our CPF will never come true.

In hindsight, it was easy for anyone to say, "We saw this coming, everyone can see that." Note that, the 1 Million Dollars HDB forecast was casted when new HDB flats was $120,000 per 5-room flat. If you told anyone back then about a million-dollar HDB flat, they would look at you worriedly.

Never mind that the HDB was an executive maisonette. Nevermind that it was in a prime location with a 'fantastic view', like what Mr Khaw Boon Wan raved. Unlike 15-20 years ago when the Brotherhood of the Oracle met up, by now even ordinary Singaporeans who do not dabble in predictions can see how a simple 4 room flat in any location will be able to fetch a million bucks in resale, with a 6 figure cash over valuation (COV). What a difference the last 10 years make. Sentiments changed from, "Impossible," to "Maybe," to "Yes but when?" to "It'll happen to any other HDB flats soon, I'm waiting to be a millionaire!" 

Dangerous optimism engulfed Singapore yet again and a painful repeat of 1997 looks imminent. Some folks who bought their properties (public & private) in 1996 had to wait 15-20 years before they broke even. Of course, the majority of the people would not stop to see, like the Brotherhood of the Oracle. If they do, their sentiments on the biggest private property crash in Singapore history will be aligned. It isn't difficult to see, all the signs are staring at us angrily. This time round though, the public housing market has been made to be well supported. HDB has opened more schemes [link] for buyers since. It looks like we will be relaxing the buying restrictions for singles to buy HDB flats. In the upcoming property crash, private home owners will be scampering for HDB flats after they offload their expensive property investments at a loss. This group will not be allowed to buy a HDB flat immediately after selling their property but they can do so after half a year. Thus it will not be long before the temporary dive in HDB prices will be well supported and eventually head north again sluggishly.

The big question mark lies in what happens after our population hits the targeted 6.5 million, when demand will be somewhat capped. Soon, people. Watch on.


  1. I apologise for having to say this, but i will be standing firm and loyal to my comments:

    i will certainly love this housing bubble to burst anytime, even at the very next tick from the clock's second hand. Never mind the suffering that such a scenario inflicts on the population, it will be a good wake up call for all the ostriches living in their castles and pigeon holes.

    This is also the time for young people to buy houses at a more affordable price, albeit that a burst housing bubble in sg will definitely be worse than the American housing crisis in 2008. Why? How can a combined gross $5000 monthly salary be sufficient to support a $400,000 hdb loan? We are turning ourselves into slaves for the housing loan!

    There are people who have the luxury of being born in 1960s and 1970s, and thus able to purchase their HDB flats at $180,000. These "elders" will always say: work harder. dont be lazy. work 2 jobs.

    The unimaginable levels of leverage lays the foundation for a housing bubble worse than the roots of the American housing crisis. At the very minimum there is a option to do farming in America, be a bus driver, be a plumber, and people will not look down on you. Would you like to work for the wages of a china bus driver at SMRT?

    It is only when such a scenario occurs, this country will learn how to feel, empathise and care for the people around them. For once, material goods will seem so trivial when everyone are at imminent risks of losing their shelter.

    want change? change is always painful. Ouch.

    1. i collapse or market correction.either one has to happen soon.

  2. We are waiting to sell our apartment and every moment of wait is terrifying. When is the best time? There is never one best time, i guess?


  3. Surely this madness must stop. It just can't go with rising prices bearing in mind that HDB flat lease is only 99-yr. When the the flat is getting older, prices ought to fall right? When the bubble burst, I wonder what will happen to their "investment?"

  4. I flunked my basic economics when i was in university, because i don't understand what is "supply and demand". I strongly believe in hoarding, thus distorting the all-naive reasoning in the "supply and demand" concept in my textbook. Why isn't the prices coming down despite increased supply in an "open market", where prices are determined by "market forces"?

    The move to allow singles to buy a hdb flat is probably a hint that there is a bubble in the tightly-controlled new HDB flats. This is similar to 1997-1999 where the supply exceeded the actual demand due to unfavourable economic conditions. Is this the reason why we need the singles to help clear "excess stocks"? A glimmer of hope for potential buyers?

    we dont learn and we can't learn our lessons properly, heh?

    Imho, there is no other safe investments that can provide comparative yields and returns. Stocks can go bust, bonds can be defaulted on, gold prices fluctuate. When people have too much money and banks give 0.3% interests on deposits, people have 2 choices: throw their money into a house, or buy a thicker mattress. This is what is happening in major Asian cities, where banks are so eager to lend and developers too happy to build.

    People have 2 choices: get married to be a slave of a 30-year housing loan, or stay single and take one or two long holidays (2-3weeks) every year, with a big fat bank account at the end of 30 years.

    I wonder what the castle owners are going to do, when people start defaulting on their $500,000 HDB loans on a large scale basis. The lack of transparency in the CPF system is immensely scary.

    Print more money? Can i help out with my Brother all-in-one printer? i promise to use original toner from Brother.

  5. Bought 3bedroom flat in Toa Payoh for $7,500 in the late 60's and that is affordable housing. Just unthinkable that public HDB flat can go up to a million.
    Must be out of mind or not in the right mind to buy a depreciating property that is not yours in the first place. How to get married and have children?

    1. "You never actually own a HDB flat, you merely look after it for the next generation of PAP"

      Which government leaders on the planet pay themselves more than $1 Million pa ?

      Where can you find public housing on the planet that is priced at 1$ Million for 99 yr lease and with changeable rules attached ?

      Which country on the planet can match the feat of one familee when it comes to running state funds in hundreds of Billions...with no transparency ?

  6. Nix got it correct: the key to it is population. Singapore is NOT unique in RE prices following that of influx (it lags population movement by up to 6 months: please see Perth now, and use Melbourne as retrospect. Or lets use Darwin).

    6.5 million as a physical cap? I'm not entirely sure if this is the limit: back in Aug 11 I drove around SG at the fringes and estimated that we could take in another 3m. That places possible capacity near 8m.

    What the PAP done is opposite of nationalism and nothing new: name me one middle eastern country that has had their local population diluted within a short period of time to that of only 10%? We're still FAR from those levels.

  7. From my previous job, correct me if i'm wrong:

    Company ownership in Dubai is 49% local and 51% foreigner. When something goes wrong, the authorities goes after the foreigner first. The local does not need to do anything significant and reaps the profits happily.

    Don't ever break the laws in Dubai. The courts dont provide translators and the court proceedings will be in 100% Arabic. Don't expect integration into their culture.

    Sure, we can make such comparisons. How extensive and in-depth shall the comparison be?

  8. Emirates. I stand corrected: it's at 13%. Everyone else = FT.

  9. That is the day when eligible middle class should seriously consider to migrate.
    I already foresee it coming sooner or later after GE2011, that was one of the reasons for applying my Aus PR visa, glad that I got it before BE2012.
    Now I feel much more relieved after knowing that I have been "insured" (my Aus PR visa is like an "insurance") from all these shits even they do happen now or in future.

  10. It takes just one strong earthquake to shatter many of our buildings.
    Then there goes property dreams for a large industry and our society.

    But we're assured that such a natural disaster does not come to Singapore.
    Yet Australia warns its people in an advisory that this island is in danger from tsunami.

    1. does influx of 2Million foreigners into this tiny island count as a tsunami ?
      i have to add it has nothing to do with mother nature but self induced by a bunch of nitwits!