44-year-old Ang Mo Kio flat sold for record $1.3m — is it a good value? Analysts weigh in

In a record-breaking transaction, an executive flat at Ang Mo Kio was recently sold for $1.3 million.

The sale, which was completed in July, marks a new record for the most expensive resale flat sold in the estate. 

Located between the 10th and 12th floor of Block 611 Ang Mo Kio Avenue 5, the 1,915 sq ft unit has just 55 years left on its lease.

The $1.3 million transaction price surpassed that of a maisonette in Ang Mo Kio Ave 4, which was sold for $1.2 million on July 1, 99.co reported. This unit has 70 years left on its lease.

Property analysts AsiaOne spoke to, however, felt that older flats still offer excellent value for buyers - if they are willing to overlook their depreciating value.

Heikal Shafrudin, co-founder of Herohomes, told AsiaOne on Thursday (Aug 1) that the Ang Mo Kio flat sale might be driven by the buyer's intention to secure a 'forever home', rather than a short-term investment.

"This emotional attachment in the property as a long-term family home can provide significant personal value that outweighs the diminishing lease," he added.

Luqman Hakim, chief data officer at property firm 99.co, said that despite the Ang Mo Kio flat having "only" 55 years left on its lease, its price of over a million dollars could still be justified from the buyer's perspective.

"While lease is one of the factors to consider when buying a flat, different buyers have different considerations when it comes to purchasing resale property," he said, adding that these include access to nearby amenities.

The Ang Mo Kio flat is located within a kilometre radius from the popular CHIJ St Nicholas Girls' School. It is also located within 1km to 2km of Anderson Primary School. 

Lentor MRT station, which is on the Thomson-East Coast Line, and Yio Chu Kang MRT station are also in the vicinity.

Luqman also pointed out another appeal of the Ang Mo Kio flat - it is an adjoined unit that is converted from two three-room or smaller flats.

"This provides a very spacious living space for the family and such unique units are hard to come by in Ang Mo Kio," he said.

Heikal said that this sale might set a precedent of how buyers value properties - with those having shorter leases might not be seen as a decisive factor.

"Properties that offer unique advantages, such as exceptional views, larger space or prime location, can still attract premium prices," he added.

But Heikal warned such buyers are a rarity, and that owners of older flats should not expect their flats to go for a million dollars.

In a media statement on July 26, the Housing and Development Board (HDB) reiterated that million-dollar flat transactions continued to make up a small proportion of total resale transactions in the second quarter of this year.

"The vast majority of resale flats were transacted at a much lower price and remained affordable," said HDB.

Meanwhile, Lee Sze Teck, Huttons senior director of data analytics, said that there are other considerations that home buyers should look at before buying older flats.

He said that due to restrictions on loan-to-value (LTV) limits, those purchasing an older flat might not be able to borrow as much from the banks.

There are also limitations on the amount of Central Provident Fund (CPF) one can use to finance an older flat, added Lee.

"Buyers should also check the condition of the flat, such as whether there is water seepage on the ceiling and spalling concrete," he said.

ALSO READ: Should we buy an old but central HDB unit, or a newer one but located further away?

chingshijie@asiaone.com