4 reasons why an HDB resale flat would fetch $1m or more

When the Housing & Development Board (HDB) was set up more than six decades ago in 1960, its primary goal was to provide affordable homes for the residents of Singapore. 

And it’s done a damn fine job. There are currently more than a million flats spanning across 24 towns and three estates. More than 80 per cent of people live in HDB flats, with around 90 per cent owning their own homes. 

Prices of flats reaching new heights

However, there’s been a rising trend of HDB flats transacting at eye-watering prices. 

In 2020, 82 flats changed hands at or above $1 million. Fast forward to 2021, where the number has more than tripled to 261 million dollar flats sold over the course of the entire year. 

According to flash estimates from HDB, resale flat prices were up by 2.3 per cent in Q1 2022 from the previous month. A new record was notched in December 2021, with 38 flats being transacted for at least $1 million, surpassing the previous record high of 29 transactions recorded in November. 

And it’s not just mature estates fetching sky-high price tags either. A 1,905 sqft executive maisonette in Hougang Central sold for $1 million in January 2018. It was the first time a non-mature estate flat hit the million-dollar mark.

Yishun then joined the million-dollar non-mature estate club when a deal was inked for a $1.038 million executive flat, with 78 years left on the lease at the time of the sale. The flat also boasted an expansive floor area of 2,103 sqft, a rarity in HDB flats. 

With prices steadily climbing, it leaves many scratching their heads and wondering if the meaning of affordability should be redefined when it comes to HDB flats. 

So this begs the million-dollar question: Why would someone pay more than a million dollars for a HDB flat? 

1. Million-dollar view

High floors fetch high prices, as evidenced by these flats found in Ang Mo Kio and Tanglin. These two 1313 sqft flats priced at $1 million and above come with stunning views. 

Forget Netflix, pull up a seat on your balcony and soak up the picturesque sunsets (or sunrise, if you’re an early bird).

In comparison, units on the lower floors are at least $100,000 to $400,000 lower. 

Transaction history for 291 Bishan Street 24

Transaction history for 33 Ghim Moh Link

A 4-room unit on the 40th floor at The Pinnacle @ Duxton on Cantonment Road recently sold in March for $1.06 million.

In comparison, a same sized unit in the same block sold for $70,000 less. It was 30 floors lower than its counterpart. 

While the 10th storey might be considered a high floor for most HDB flats, the lower price might be attributed to the unit being on a “low” floor, especially in towering HDB developments such as The Pinnacle @ Duxton. 

With the development being in exceedingly high demand, the average psf increased by more than 19 per cent over the past year. Its average price psf currently stands at $1,127 psf.  

In contrast, flats at Natura Loft are slightly more affordable (if you can even use that term), with an average psf of S$920. It is a Design, Build and Sell Scheme (DBSS) project located along Bishan Street 24. 

Most expensive HDB sale

Last July, a five-room (1,291 sqft) unit stunned Singapore when it fetched a jaw-dropping S$1.36 million, making it the second most expensive HDB resale flat ever sold to date. 

It was dethroned by another five-room (1,152 sqft) resale at, of course, The Pinnacle @ Duxton, where a unit on the top floor (46-48 floor) went for S$1.39 million. 

2. Prime location

As we creep closer to the CCR area, the prices of HDB resale flats edge even higher. Location is a timeless factor when it comes to property, which is why you see HDB flats in prime locations fetching high prices.

It’s no surprise that mature estates command a higher average psf than non-mature estates. 

Mature estates typically refer to residential areas at least two decades old. Because it has been around for so long, a wealth of amenities have sprung up in the neighbourhood to cater to its long-time residents. 

Mature estates in Singapore:

Ang Mo Kio	Central	Pasir Ris
Bedok	Clementi	Queenstown
Bishan	Geylang	Serangoon
Bukit Merah	Kallang/Whampoa	Tampines
Bukit Timah	Marine Parade	Toa Payoh

Non-mature estates in Singapore:

Bukit Batok	Punggol
Bukit Panjang	Sembawang
Choa Chu Kang	Sengkang
Hougang	Tengah
Jurong East	Woodlands
Jurong West	Yishun

Take The Pinnacle @ Duxton, for example. The development takes pole position when it comes to transacting million-dollar homes, with an average sale price of $1.09 million in the past six months. 

The owners of 183 flats cashed out at a cool $1 million and above, starting in June 2017, just a year after the project completed its MOP. 

It’s the only BTO project located right smack in the city, within walking-distance proximity to the Central Business District as well as Outram Park and Tanjong Pagar MRT.

Another choice pick would be Natura Loft. It’s pretty central, with an estimated 15-minute drive to Orchard Road and Raffles City. According to HDB, Bishan takes second place in flats transacting for more than a million dollars. 

Many are more than willing to pay for the convenience of living in a central area with easy access to amenities. 

3. Flats of epic proportions

In land-scarce Singapore, people are willing to fork out the big bucks in exchange for more living space. Families with children who desire their own rooms or multi-generational families living under one roof prefer larger flats for more breathing space. 

It’s the reason why big flats are able to command a premium, even though the lease decay may not necessarily be in the owner’s favour.  

This executive maisonette along the Kallang River is going for $1.05 million. It has a sprawling living space of 1,657 sq ft, which is more than enough to house and raise a large family comfortably. 

Another option would be jumbo flats, which you can find mainly in Woodlands, Yishun and Jurong East. These humongous houses are achieved by combining two flats into one, a response by HDB to oversupply in the area in the 1980s. 

A 40-year-old jumbo flat netted $1.03 million during the pandemic, the first ever flat in Ang Mo Kio to achieve the million-dollar mark. The previous owners were a husband-and-wife team of interior architects who gave the old flat a dramatic makeover. 

At the end of their renovation, their home was indeed a masterpiece, stunning from every angle.

Their home was even featured in Home & Decor, where every shot is a feast for the eyes.  

[embed]https://youtu.be/06aVszaz2Ak[/embed]

Many jumbo units are almost 2,000 sq ft, which provides a unique rental opportunity by re-partitioning the adjoining area between the two original units.  

Imagine living in a good-sized flat while netting a consistent flow of rental income from your tenants next door. You get to live in your flat for free, with rental income from your tenants and paying your mortgage with your CPF.

There are only around 2,900 jumbo units islandwide, making it even more of a rarity.

4. Upcoming transformation plans

Another reason why one would empty their pockets to acquire a $1 million flat would be those anticipating an upcoming rejuvenation in the district. 

The Urban Redevelopment Authority (URA) 2019 Master Plan maps out Singapore’s development over the next decade, reviewing it every five years to ensure relevancy to our current environment. 

Punggol

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Non-mature estates such as Punggol is a prime example of this. The Punggol Digital District (PDD) rejuvenation is in the works to cultivate Punggol as Singapore’s first enterprise district. 

Punggol will integrate technology into its infrastructure, such as an underground pneumatic waste collection to eliminate garbage trucks and waste collection chutes and a smart energy grid for consumers to use clean energy sources to power their daily needs. 

When the PDD is ready in 2023, there will be an influx of jobs for nearby residents. 

Currently, the highest price a HDB flat went for in Punggol was $970,000 in November last year. The flat sold was a five-room premium apartment loft that spanned 1,582 sqft, with 87 years left on its lease. 

Keppel Club

One of the most anticipated urban transformations under URA’s Master Plan is the Greater Southern Waterfront (GSW) development. 

Under the new plan, Pasir Panjang Power District, Keppel Club and Mount Faber will be built up in phases over the next five to ten years. A continuous waterfront corridor is in the pipeline to link green and recreational spaces such as the new Pasir Panjang Linear and the Labrador Nature Reserve. 

On April 12, National Development Minister Desmond Lee announced 6,000 HDB flats are slated to be launched for sale at the Keppel Club site within three years. It will be the first-ever BTO site in the GSW.

With its desirable location and upcoming facelift, analysts predict prices of three-room and four-room flats to range from $400,000 to more than $700,000.

If Pinnacle @ Duxton is anything to go by, we can hazard a guess that these BTO units at GSW are almost guaranteed to bag a million dollars by the time the development completes its MOP. 

It’s highly likely the blocks of flats will be classified as a Prime Location Housing (PLH) site due to its attractive location (the drive to the CBD and Raffles Place will take just under 15 minutes) and proximity to major employment nodes. 

Under the PLH model, the units are subjected to a minimum MOP of 10 years and subsidy clawbacks to level the playing field and disincentivize residents from flipping their homes for a hefty profit. 

Will there be more million-dollar flats?

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When HDB flats come with a combination of any of the above factors – a centrally-located, larger than average flat with stunning views – you can be sure there’ll always be demand as many covet a slice of this ultra-exclusive pie. 

It all boils down to what each individual values and how much they’re willing to pay in exchange for that value. 

Furthermore, pandemic-induced construction delays have forced many potential BTO buyers to turn to the resale market, driving up prices of resale flats even further. 

This article was first published in 99.co.