Will your affordable apartment be RM1 million one day? 

screenshot_2017-01-01-08-18-58.pngWas 2016 a bad year for property or was it a record breaking year? Well, for HDB flats in Singapore, it was the latter. 19 of them were sold for more than SGD1 million. (RM3.1 million) Yes, 19 owners who has just got themselves added into the millionaires list in Singapore. This is HDB flat. No private car parks, no swimming pools but you have a clean environment, working lifts and it’s almost always nearby to anything and everything. I think it should be the most successful government-run public housing programme in the world; HDB. Of course, there are requirements and not everyone can just get it immediately but somehow based on time factor, you will get one, if you qualify and applied for one. If you are thinking what I am thinking now, here are my thoughts. What if the high-rise unit that you have just paid for, say 850 sq ft and RM350,000 can one day become RM1 million. I know, some wanted to say but ringgit is disappearing…. (Please continue sleeping).  Even if I have RM1 million ringgit after another 10 years, this RM1 million is still going to be worth a LOT of money my friend. So, time to buy? I would say buy is a must but dreaming of RM 1million may have to wait a little bit. I am very sure it will happen but it must not happen too fast, else we are looking at a property bubble bursting. Read here:  Spotting signs of a property bubble, 3 points (updated)
We have RUMAWIP, PR1MA and RumahSelangorku within the Greater Klang Valley. It’s targeted at the masses with a noble intention of ensuring everyone has a roof over their head. Assuming you paid RM300k for your sub 900sq ft affordable apartment, when do you think it will reach RM1 million? It depends on how far and fast urbanisation into Greater KL continue to happen. Every 1 million new population, based on 4 to 1 home means a need for another 250,000 new homes. The property prices tend to move up faster when the supply is slower than the demand. This is one factor.
It’s pretty true that Greater KL is huge. So huge that there are areas that people shun and labels them ‘too far.’ Yeap, even though it is STILL within Greater KL. Haha. So, as long as more people move in and everyone refuses to move further away from the city centre, then those affordable apartments / condos nearer to city centre would have an advantage to move up faster. This is the same as those HDB flats. They have to be within good areas that everyone wants. So, location remains very important.
Lastly, I personally do not believe most of Singapore’s HDB flats would ever reach SGD1 million. Median household income for Singapore stands at SGD8,666 and this is the latest available number. Source: Department of Statistics, Singapore. Link here.  Not many would be willing to spend about half of their household income just for a HDB flat. I think some may prefer to get a car for convenience instead. Some parts should go into holidays. And more… Which brings us to the question of ‘how many Malaysian households would be willing to spend RM1 million to get a high-rise near to city centre?’ There are already many such instances though they are mostly luxury condos and not apartments or even flats (regardless of how well maintained they are). If I am that Malaysian, I would prefer to buy much further away, with more space for my family.
So, should we stop buying then? Let’s stop joking ok. Buying is a must and RM1 million target is not a realistic one but as a form of hedging for our poorer future, yes. Property prices will continue to rise. If we can afford, we MUST buy one. Look at all stats from advanced nations or even look at Singapore as a benchmark. Their property market is far more advanced, that’s why we can see all these happenings in advance. It’s always buying cheaper but further and later, as further becomes nearer, then it’s buying smaller for affordability. The cycle repeats everywhere. Be savvy and take the right actions yeah. Your future depends on you and not anyone else.
written on 1st Jan 2016
Next suggested article:  Why Chinese investors are warming up toMalaysia’s property market 


  1. Buying at city centre is always a good investment value, if you can afford it. Your Singapore HDB story is not a complete one. All the million-dollar HDB flats occur in city centre. Obvious. For any homes to hit a peak, merely saying the obvious supply and demand is no-brainer. The following must happen: income growth, GDP/economic growth, population, culture( psychological fulfillment ), transportation nodes and all the accompanying infrastructures. At the city centers, the multiplying effects take place. As population gets bigger, the city boundaries are expanded to accommodate its growth for housings and living infrastures, the centers (including the squatters) must be rejuvenated, thus prices increase. The price pressures from the outside are always pushing higher and higher inwards. The suburban sectors do not have this pressure all the time.

    1. Good explanation Fred. However, as of now the hdb flats are reaching that level simply because the buyer wants that unit very much. Else hdb prices are still nowhere near that level. Cheers.

  2. Charles, for the RM 300K apartment to reach RM 1m ? Simple way is to estimate wirh the Rule of 72.
    Example if we assume a CAGR of about 8%, then it takes 72/8 or 9 years to double. Therefore in 18 years from now, i.e. in the year 2035, the apartment will become RM 1.2 m

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