Multi-generation HDB resale flat in Yishun sold for a record $1.063m

A 1,765-sqft multi-generation HDB resale flat at 666 Yishun Avenue 4, completed in Dec 1987, has just been sold for $1.063 million ($601 psf), setting two Singapore all-time-high records:

• The first-ever million-dollar multi-generation HDB resale flat sold in Singapore
• The first-ever multi-generation HDB resale flat to surpass the $600 psf mark

The transaction was captured on Oct 19, about 20 days after the implementation of the Sept 30 cooling measures.

Since it's only been less than three weeks after the announcement, it is also probable that the option-to-purchase (OTP) for this particular high-floor unit (10-12th range) was signed before Sept 30.

Prior to this sale, the last all-time-high record for a multi-generation flat was for a 1,787-sqft apartment at 460 Tampines Street 42, which sold for $990,000 ($554 psf) in October 2018. The unit was located at a lower floor range (fourth to sixth).

What is the difference between a multi-generation "granny" HDB flat (from the late 1980s) with the newer 3Gen flat?

Prior to the introduction of 3Gen flats in 2013, HDB built several multi-generation HDB flats in the late 1980s, where three- and four-room simplified blocks were reconstituted into three-bedroom + studio apartments.

The merged apartments – then known as "granny flats" – would give homeowners a range of between 133 to 165 square metres (1432 to 1776 sqft) of luxurious floor space.

The intent was for their elderly parents to live with them in a separate 40-sqm "studio apartment" as part of HDB's then Multi-Generation Housing Scheme.

Some of these flats include additional entrances, two kitchens (!) and three toilets (because of the combined apartments). As the floor plan below shows, there is an interconnecting door between the studio and the main unit.

They are extremely rare and can be found only at Bishan Streets 11 and 12, Tampines Street 42, Yishun Street 61, and yes, Yishun Avenue 4.

At the time of launch in 1987 and 1988, their selling prices were between $80,700 to $140,700.

Unfortunately, the concept was subsequently abandoned because the extra studio apartment wasn't utilised by their "grannies".

Instead, many residents took their elderly parents into their main home and used the additional studio as study rooms, workout rooms, workshops, chill-out pads and so on.

At this juncture, we should stress, that these are not the 3Gen flats we know today – like the ones at Canberra Vista and Central Weave.

The newer 3Gen flats are smaller (1,292 sqft) but slightly bigger than the new five-room BTO flats.

Anyway, the unique functionality of having additional entrances and larger spaces may be one of many reasons the multi-generation "granny flats" are still in demand, despite being much older.

666 Yishun Avenue 4

Completed in Dec 1987, 666 Yishun Avenue 4 has 64 years and three months left on its 99-year lease.

The entire block consists of multi-generation flats, with 66 units ranging in various sizes between 1,582 and 1,927 sqft.

It should be noted that the record-breaking $1.063 million price is for a 1,765-sqft unit, not even the block's largest unit type.

Prior transactions within the same block include an $838,000 ($474.79 psf) sale for a 1,765-sqft unit in November 2021 and another $860,000 ($446.29 psf) sale for a 1,927-sqft unit in January 2021.

Interestingly, 200 metres from Blk 666 is another million-dollar HDB resale flat – a 1,948-sqft executive apartment at 664 Yishun Avenue 4 – sold for $1,000,888 $514 psf) in May 2022.

It is part of a group of four executive apartments in the area which has breached the million-dollar mark.

The other three are at 661 Yishun Avenue 4 ($1.078 million), 652 Yishun Avenue 4 ($1.038 million) and 608 Yishun Street 61 ($1 million).

At this point, despite being some distance away from Yishun or Khatib MRT stations, we can't help but wonder if something "magical" is happening along Yishun Avenue 4.

Maybe it has to do with the way these blocks are "nestled" between key amenities like Wisteria Mall, Safra Yishun, Yishun Park and Khoo Teck Puat Hospital.

The significance of the million-dollar multi-generation HDB resale flat

Since 2012, 18 multi-generation HDB resale flats have sold above the $900,000 mark – 10 of which were sold between 2012 and 2019.

In 2020, one 1,722-sqft flat in Bishan Street 11 sold for $940,000 ($545.88 psf).

In 2021, four multi-generation flats recorded sales of between $920,000 to $965,000. They were located at Tampines Street 42 and Bishan Streets 11 and 12.

In 2022, two flats – one at 460 Tampines Street 42 and another at 633 Yishun Street 61 – sold for $968,000 and $980,000, respectively.

These pricier multi-generation resale flats (including the record-breaking Yishun Avenue 4 flat) are noteworthy based on the following observations:

(These apply to both older multi-generation flats and newer 3Gen flats)

Eligibility criteria

Even though they were built before the introduction of 3Gen flats (2013), multi-generation flats come with the same strict eligibility criteria.

Since they are meant for extended families, the application must include at least one parent.

For resale, the applicant must be a Singapore Citizen (SC) or Singapore Permanent Resident (SPR) and include at least one occupant who is an SC or SPR.

So it is no mean feat to be able to resell an older and more expensive multi-generation flat, considering the pool of eligible buyers is much, much smaller.

Full SPR households can buy resale multi-gen flats

If the household has no SC owners (ie. all SPRs), all SPR owners and essential occupiers must have had their SPR status for at least three years, including the parent.

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In other words, it is possible for a full SPR household (with at least a three-year PR status and a parent who is an SPR) to buy a multi-generation resale flat.

This is different from a new 3Gen flat during a BTO launch – where one applicant MUST be a Singapore citizen (SC).

This opens up resale opportunities for SPRs with extended families, especially if they have no intention of applying for a 3Gen flat during BTO exercises.

No income ceiling for resale multi-gen flat (unless applying for grants)

Furthermore, while there is a $21,000 household income ceiling for new 3Gen flats, there is no income ceiling for resale (unless applying for grants).

Since at least one parent is co-sharing the space with their children, there is a greater impetus for him or her to assist with funding the apartment with their children.

This would have increased the applicant's affordability in light of the recent stress-test interest rate cooling measures and lower loan-to-value ratio (85 per cent to 80 per cent) for HDB housing loans.

Applicants who are priced out of getting a loan for a flat may find it easier to obtain financial help, including assistance with higher downpayments, since their parent(s) are applying with them.

There are also applicants whose household income breached the $21,000 ceiling (which would have included their parents' income).

Since they have to forgo new 3Gen flats, they may opt for resale ones (particularly larger units) if their parent(s) are already planning to live with them.

Having a parent live with them also means eligibility for the Proximity Housing Grant (and other benefits)

Eligible families can apply for four different grants when buying a multi-generation or 3Gen resale flat.

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These include the CPF Housing Grants (Families), Enhanced CPF Housing Grant (Families), Step-Up Housing Grant (Families) and Proximity Housing Grant (Families).

In other words, young couples intending to raise children may find more benefit in convincing their older parents to sell away their existing HDB flat, so they can co-share and live together within a multi-generation or 3Gen flat.

This also means they don't have to force themselves to find a resale flat within 4km of their parent's current house just so they can apply for the Proximity Housing Grant.

Not only do they gain more from these grants, but their parent(s) can also assist them in caring for their children at home.

In addition to all of the above, all applicants and occupiers are not allowed to own or have any interest in local or overseas private properties if they're buying a resale multi-generation or 3Gen flat.

As per the wait-out period from the latest cooling measures, they should not have disposed of any private property in the last 15 months.

Analysing the price action of multi-generation HDB resale flats

The chart below shows average psf price trends for multi-generation HDB resale flats since 2007.

Across Singapore, multi-generation and 3Gen resale flats have appreciated roughly 5.26 per cent over the past 10 years.

This is because they have a much lower sales volume (lower supply and stricter criteria), averaging about $488 psf as of Oct 2022.

We should also note that the spike from 2009 to 2012 may be due to the announcement or introduction of the new 3Gen flats (launched in 2013).

Since we're on the topic of Yishun, over the past 10 years, the average psf price of multi-generation resale flats in Yishun has increased 26.31 per cent.

This is noticeably much higher than the Singapore average of 5.26 per cent.

The reason is simple. All of Yishun's multi-generation transaction records are from the sale of older multi-generation flats, not 3Gen flats like Saraca Breeze or Park Grove.

Due to their rarity and larger floor areas, average psf prices of these flat types have been trending higher.

The awareness of 3Gen flats (and their benefits) may also be a likely cause for greater interest among extended families looking for larger spaces.

What's changed recently is the spillover effect from the recent cooling measures as it alters some homebuyers' original plans.

As they wrestle with their financials and childcare, having a parent sell their old flat and help finance a much, larger space together may just be the solution they need.

This would inadvertently increase the pool of likely buyers for such flats, as they house-hunt with their parents.

This article was first published in 99.co.