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PROPERTY: Million-dollar HDB Flats

HDB Flats

By Stella Thng

Public housing that costs a cool million – a surreal but true-to-life phenomenon that surely deserves its own #onlyinSingapore hashtag. Last September, a 1,615 sqf executive apartment in Queenstown broke the record for being the first HDB flat in Singapore to transact for a cool $1 million, with a Cash Over Valuation (COV) of $195,000. This triggered seven-figure asking prices for a growing number of HDB properties. At press time, a quick search on STProperty.sg for HDB flats going for a minimum of $1 million turned up 14 ads, though several are HUDC apartments (see sidebar opposite) in the midst of privatisation.

Of course, these asking prices could just be wishful thinking on the homeowners’ (and property agents’) part. We baulk at the thought that HDB flats – built by the Government to provide affordable public housing – could potentially command such sky-high prices. This begs the question: Who’s buying these million-dollar flats, and why? More importantly, will these “rare transactions” soon become commonplace?

 

WHERE ARE THESE MILLION-DOLLAR FLATS?

The record-breaking unit sold last September is located opposite Queenstown MRT station and sits on a high floor. The home, with three bedrooms and a study, works out to be about $619 per sqf (psf) which, although high for an HDB flat, would be considered reasonable or even a steal compared to the private condominium prices in the area. (A similar-sized unit at a nearby condo, The Interlace, is marketed at $2.1 million or $1,300psf).

Also commanding high prices are executive maisonette flats in Bishan, which are over 20 years old. Last year, one such unit, with a 150sqf roof terrace, was sold at $980,000. Another executive maisonette went for $970,000, with a record-busting $250,000 COV.

At press time, two executive units in Bishan Streets 12 and 13 are currently advertised at $1.08 million and $1.2 million respectively. Both units are asking for COV of over $200,000. Dixon Sioh, director of Estates 31 LLP who is marketing the first unit, received an offer of $1 million which the owner turned down. “The interested buyers are mostly HDB upgraders and permanent residents buying it as a home, not so much for its investment value. They’re attracted by the high floor, good view and the unit’s uniqueness,” he explains. There are only 52 HDB units in Singapore with this unusual layout – two storeys and with a big roof terrace – which is rarely found in public housing.

Other HDB hotspots include Kim Tian Place, where a 1,237sqf five-room flat is marketed at $1 million. A huge 2,239sqf unit at Pasir Ris (actually two adjoining four-room flats combined) is asking for $1.05 million.

Mike Wong, associate director of Orange Tee, is currently marketing a 1,324sqf five-room unit at Telok Blangah Drive for $1.02m. The 37-year-old unit was renovated three years ago and boasts a view of the sea and Sentosa from its balcony. “The flat is near to Telok Blangah MRT, Vivocity and other amenities and of course, offers a great view,” says Mike, adding that the owner will not consider any offer under $960,000. Other similar units in the area have previously been transacted between $800,000 and $900,000.

 

WHO’S BUYING THEM?

Mike notes that potential buyers are mostly aged in their early 40s, but some are also young yuppie couples. “Most potential buyers are downgraders who have sold their private property at a tidy profit; they tend to look at the price as a whole, not at the COV,” he notes.

The Telok Blangah five-room flat he’s marketing is valued at $725,000, which means the buyer would have to fork out over $275,000 to meet the million-dollar price tag. “Most ‘normal’ HDB upgraders may not cough up somuch COV if they didn’t sell off their previous home at a similarly high price. For most HDB upgraders, anything above $100,000 COV might be a stretch,” he adds.

Last December, Dixon brokered a deal for a penthouse executive maisonette on a high floor in Bishan. It was sold to a Singaporean family, who are HDB upgraders, for $1.01m and at over $200,000 COV. He discloses, “The buyers were won over by the high floor and beautiful city view. You can see the fireworks from the National Day Parade from their home!”

What do potential buyers think of shelling out $1 million for an HDB flat? Janice Seah, a single professional, has a $1 million budget to buy a home for herself, her parents and her younger sister, who currently live in a five-room HDB flat. She was originally looking at private housing. “My budget can only get me a small two-bedroom condo, and we’re not willing to compromise on the living space. Although paying $1 million for an HDB flat may sound ridiculous, it may be the best solution for me.

Besides, my parents can rent out their HDB flat and they’ve offered to help contribute to some of my monthly expenses,” says Janice.

Business owner Denise Tan, who lives with her husband and two kids in a five-room flat, is also considering joining forces with her parents who own a fully paid-up four-room flat. “By selling two flats, we’ll definitely have more than enough for a $1 million unit. Besides being able to look after my parents (when we live together), we’ll also save by combining our household expenses,” she says.

 

WHAT ARE HUDCs?

HUDC or Housing and Urban Development Company flats were built in the 1970s and 1980s by the HDB as a housing option for middle-income families. They can be said to be the precursor to the executive condos built by the HDB today. They were phased out in 1987 and many of them have either been privatised or are in the process of privatisation, turning them into private housing that is no longer subject to HDB policies. Examples of privatised estates include Pine Grove, Ivory Heights, and Laguna Park.

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