2-room Tiong Bahru HDB flat sold for record $585k, with 48.5-year lease left

A two-room HDB resale flat at Tiong Bahru has just been sold for a record-breaking S$585,000. This is an all-time high price paid for the flat type across the country.

The transaction comes after a high-profile sale around a month ago, when a four-room HDB resale flat in the neighbouring block was sold for a whooping S$1.5 million, making it the most expensive HDB resale flat sold as of writing.

S$585k flat has 48.5 years of remaining lease

What is notable about this record sale is the short remaining lease of the flat.

The flat is located within the 1st to 3rd floor range of Blk 43 Moh Guan Terrace, which had its lease commencing in 1973.

According to the HDB resale price portal, the flat has a remaining lease of 48 years and six months when it was resold this month.

This is also not the first time a unit from the four-storey block was sold at such a high price.

Three years ago, a four-room unit at Blk 43 Moh Guan Terrace changed hands for S$1.088 million, making headlines due to its short remaining lease.

Those buying homes with a shorter remaining lease are subject to stricter financing requirements. For instance, in order to get full financing from the HDB, the remaining lease of the flat will have to cover the youngest owner up to age 95.

This is also why an older flat with a shorter remaining lease does not have much runway for price appreciation, and may instead start depreciating.

But the flat is bigger than a typical 2-room HDB flat

On the other hand, this two-room flat at Moh Guan Terrace is not your typical HDB flat.

According to the HDB resale price portal, it has a floor area of 67 sqm, which works out to around 721 sq ft.

This is just around 20 sq ft smaller than a three-room HDB BTO flat these days, which spans 69 sq m (743 sq ft). Meanwhile, a new two-room Flexi flat ranges from 38 sq m (409 sq ft) to 48 sq m (517 sq ft).

But at a price psf of around S$811, it's way higher than the average price psf for a two-room HDB resale flat in Bukit Merah, which stands at S$645 as of year-to-date.

On the other hand, this is still lower than the record price psf islandwide for a two-room HDB resale flat, which is currently at S$1,007.91. This was for a newer flat (it TOP-ed in 2013) measuring 47 sqm (506 sq ft) from Blk 127A Kim Tian Road, which changed hands in September 2022 for S$510,000.

But could it also be a possible SERS site?

We note that there were plans for upgrading work to be carried out at Blk 43 Moh Guan Terrace, with the plans for Home Improvement Programme (HIP) and Neighbourhood Renewal Upgrading (NRP) announced in 2017. However, these did not seem to have gone through.

Meanwhile, in the 2019 URA master plan, the land parcel where the block is has a plot ratio of 2.8, which denotes the density potential of the area.

More specifically, the maximum number of storeys that can be built on a land site with a 2.8 plot ratio is 36. This means that this low-density area with four-storey HDB blocks is extremely underutilised.

As we've highlighted in our previous article about the million-dollar flat sale at Blk 43, there's a chance that this area could be chosen for SERS.

This is also because this area is outside the Tiong Bahru Conservation Area, which means there's a chance of redevelopment.

Nevertheless, regardless of the possibility of SERS, the fact remains that a big two-room HDB resale flat in such a location is hard to come by. After all, such a low-rise, low-density neighbourhood with an old-world charm is a rarity in a land-scarce Singapore.

These reasons may just be why the buyers decided to pay such a record price for the flat.

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This article was first published in 99.co.