Will homebuyers pay $1m for flats near good schools? Here's what a survey found

With the Primary 1 registration process proving to be a daunting and competitive process for parents, living near a good school should be one of the priorities on choosing where to live.

But findings from a recent survey by PropNex showed that this is surprisingly one the least popular reasons why buyers are willing to fork out $1 million or more for a HDB resale flat.

The survey, which polled 30 property agents who sold million-dollar flats between Jan 2021 to Aug this year, found out that "proximity to good schools" was the second-least deal breaker.

Is it due to people actually believing that every school is a good school? Here's what we learnt about million-dollar resale flat owners.

'Their kids are either grown-ups or attending tertiary education'

When asked to cite the reasons for buyers choosing to fork out $1 million or more for a HDB resale flat, "proximity to good schools" was surprisingly one of the least popular reasons.

In an interview with AsiaOne on Wednesday (Oct 19), PropNex's head of research and content Wong Siew Ying shared that it is possible that some of these buyers may not have school-going children.

Wong said: "Or [it could be] their kids are either grown-ups or attending tertiary education, seeing that half of them are 50 years and older.

"The age group could have been a factor here."

The survey also showed that living close to amenities such as supermarkets, shopping malls, and parks is also not one of the most popular reasons.

The existing location of these million-dollar resale flats could be the reason why, Wong said.

"They are already located in well-established towns with convenient access to amenities," she added.

When it comes to the most popular reason, flats on the high floor tend to command a price premium, according to Wong.

"Among the reasons for opting a unit on the high floor would be the panoramic views, perhaps also the better natural ventilation [since it will be] unblocked and therefore windier, " she said. 

From the 277 units that are sold for $1 million or more this year, 33 per cent of them are on level 10 to 20, while just under half – more than 42 per cent – are located on the 20th floor and above.

King of the million-dollar resale flat towns

Several estates here have joined the million-dollar club this year, with flats in the likes of Tampines and Hougang changing hands for eye-watering sums. 

Top of the list is Bishan with the most number of million-dollar flats sold so far in 2022 at 41 units. 

This was followed by the Central region with 37 flats and then Toa Payoh with 34 flats sold. 

These three residential estates beat other traditionally popular enclaves like Ang Mo Kio (23) and Queenstown (31).

Non-mature estates here did not fare too shabby – with Woodlands already having five flats in the million-dollar list, despite only joining the club in June this year.

The survey also sought to find out the profile of a million-dollar flat buyer, and the results show that half of them are 50 years and older.

19 per cent of this group of buyers, who are mostly semi retired or have retired, indicated that downgrading from a condo or landed property as the reason for them splurging on a resale flat.

Two-thirds of the buyers are married couples, while singles and those who are divorced or widowed accounted for the remaining third.

Demand for million-dollar resale flats

Are million-dollar resale flats in high demand, even with the hefty price tag?

The findings from the survey seemed to indicate this is the case, with 60 per cent of them having garnered two or more firm offers from interested parties.

46 per cent of the buyers also paid a higher cash over valuation (COV) of between $40,000 to over $100,000 to successfully secure the flat.

However, around 27 per cent of the buyers did not pay a COV.

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chingshijie@asiaone.com