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Government probes ‘misleading’ and ‘unrealistic’ resale listings for S$2 million HDB flats

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Government probes ‘misleading’ and ‘unrealistic’ resale listings for S$2 million HDB flats

www.businesstimes.com.sg

THE Council of Estate Agencies (CEA), a body under the Ministry of National Development (MND), is investigating the recent resale listings for two HDB flats for being “misleading” and “unrealistic” in their asking prices of S$2 million.
The listings were for a 1,258 square feet (sq ft) five-room flat in a Design, Build and Sell Scheme (DBSS) project in Toa Payoh, and a 2,400 sq ft Sengkang “jumbo flat”, supposedly with six bedrooms and four bathrooms. Both units, listed at S$2 million each, had sparked an outcry on the Internet, with many expressing disbelief at their outrageous prices.
In a joint statement on Wednesday (May 8), MND, HDB and CEA said the listing for the Sengkang flat is misleading because there are no jumbo flats in the area.
The statement said: “The ‘jumbo flat’ listed is actually two adjacent five-room flats, which are not eligible to be converted into and sold as a single unit.
“Furthermore, the listing price for the ‘jumbo flat’ is well above the recent transacted prices in the precinct.”
In the last six months, five-room flats in the Sengkang precinct have transacted for around S$580,000. “The S$2 million listing price is therefore more than S$800,000 above the combined value of the two five-room flats,” they said.

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CEA has since brought the “misleading advertisement” to the attention of the agent’s property agency, and is looking into the matter. “(The agency) will take firm action if any breaches are established.”
The authorities, noting also in their statement that the S$2 million listing price for the flat in Toa Payoh was nearly S$500,000 higher than the highest transacted price in the area, said: “Many property market experts are of the view that this is an unrealistic asking price, even for a DBSS flat with attractive attributes.”
“Currently, there is no Intent to Sell registered with HDB for this particular flat, which means that the potential seller/s of this flat are not able to grant any Option to Purchase at this stage.”
The current listed prices of both flats also come with significant cash-over-valuation, which is the sum to be paid upfront in cash, the authorities noted. “While resale transactions are on a ‘willing buyer-willing seller’ basis, prospective buyers are strongly advised to evaluate their finances and housing options carefully, and be rational and prudent in their decision, especially in the current economic and geopolitical climate.”
For instance, seven in 10 five-room or smaller resale flats transacted at below S$600,000, before grants, in 2023.
And if the median grant of around S$80,000 is factored in, the figure is actually eight in 10, the government agencies pointed out.
Across the 26 HDB towns and estates, the median resale price of four-room flats – the most common flat type – was S$600,000 after accounting for the median housing grant. The median resale price was in fact under S$500,000 in 14 HDB towns and estates.
“We should not expect housing prices to increase indefinitely amid global economic uncertainty and geopolitical instability,” they added.
MND, HDB and CEA emphasised the important role that property agencies and agents play to “uphold the integrity and professionalism” of the real estate industry.
“To protect the interests of the public and promote information transparency to facilitate informed decisions by prospective buyers, CEA will also look into the information presented by property agents when they market HDB flats,” they said.
 
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