SINGAPORE — A five-room Housing and Development Board flat in Bukit Merah was re-sold for a record S$1.2 million in April, according to a recent report by property consultancy OrangeTee & Tie.

The transaction for the 112 sqm flat at Block 9A Boon Tiong Road, which has more than 90 years of lease remaining, pipped the previous record of S$1.185 million set by a 237 sqm HDB terrace house at Jalan Bahagia sold in September last year, and a five-room Design, Build and Sell Scheme flat at Boon Keng Road in January — both of which were transacted at around the same price.

This was the first time that the price of a standard HDB flat has surpassed the most expensive non-standard flats, noted the OrangeTee and Tie report, which looked at public data of HDB resale flats in the first three months of this year.

The report said that although “only 26 standard flats have been sold for at least S$1 million as of April 2019”, the number has been “inching up steadily through the years”.

It added: “We may expect more of such transactions to be inked as many new flats in mature estates like Bukit Merah and Queenstown will be reaching minimum occupancy period in the coming months.”

The report, which was issued on Tuesday (May 7), said that demand for HDB resale flats “remained resilient” as sales volume for the first quarter reached a seven-year high with 4,835 flats being transacted.

Compared with the same period last year, the number of transactions rose 8.5 per cent. However, on a quarterly basis, it declined 14.2 per cent. The report said the fall was expected given that the HDB resale market is usually quieter following the year-end holidays and during the Chinese New Year period.

In particular, the report noted that older HDB flats — those that are at least 40 years old — are still in demand, “despite lingering concerns about the depreciating value of older flats and some adverse impact from the latest cooling measures”.

A record 2,536 such flat were sold in total last year, and 628 of these units were transacted between January and March this year. The number of older flats sold in the first three months of this year made up almost 14 per cent of the total transactions.

Among the factors behind the demand for older flats is the narrowing “price expectation gap” between buyers and sellers, given that the prices of these units have been moderating over the years. The announcement of the Voluntary Early Redevelopment Scheme (VERS) and Home Improvement Programme (HIP II) during National Day Rally last year could also have instilled “some market confidence”, the report said.

At the rally, Prime Minister Lee Hsien Loong said that Vers will be rolled out in about 20 years. HDB estates built in the 1970s such as Marine Parade, Bedok and Ang Mo Kio could be among the first in line to undergo Vers.

He also announced that every HDB flat can expect to undergo major upgrading twice during its 99-year lease period, with HIP II rolled out for ageing units at the 60- to 70-year mark.