This month, Bidadari will officially be a Built-to-Order (BTO) site. Unlike areas like Tampines or Punggol, this is the first time HDB has planned to build flats on the land; we are at square one. This means there are no HDB flats or existing amentities yet, and as with other BTO purchases, you are essentially buying a house based on evaluating a concept rather than a physical house.
(image: ST Property)
HDB benefits from this arrangement in that it does not have to commit to a construction project until it knows it has enough occupants. At the same time, eligible buyers benefit because HDB offers discounts and subsidies. However, even though the proposed BTO in Bidadari is still a concept, you can use fundamental analysis to determine whether buying into the project is the right move for you.
We suggest that you ask and answer four questions:
- Is this the right location for me?
- What is the value of the BTO today?
- Can I afford the BTO?
- Do I believe in the neighborhood?
Is Bidadari the right location for me?
The better the shops, parks, schools, and transportation, the better the neighbourhood. Evaluate these against your lifestyle requirements.
The BTO project is slated to be at the corner of Upper Serangoon Road and Upper Aljunied Road, between Bartley Road and Macpherson Road. On a good day, driving time to Raffles Place would take about 15 minutes, and both Woodleigh and Potong Pasir MRT stations are within walking distance.
Nearby schools include Maris Stella High, Cedar Girls’ Secondary, Stamford American International School, and St. Andrews Secondary School. According to URA Master Plan (2014), the government expects to develop some new amenities in the vicinity. They include a commercial complex, health and medical centre as well as a new park with a pond and heritage walk.
What is the Value of Bidadari BTO?
Whether you are valuing an actual, physical home or a planned home, you start by comparing it with other similar homes in the neighbourhood. This method of valuation is called Comparable Market Analysis (CMA).
CMA estimates the market value of a unit by assuming it existed today and could be sold in the open market. Factors it takes into consideration include location, size, floor level, number of rooms, and age. Since we know that Bidadari BTO will consist of three, four, and five room units, all we need to do is determine the value of similar units nearby. In the table below, we have selected five nearby blocks that contain similar units to that of the planned Bidadari BTO.
The price range of recent transactions for a comparable 3-room BTO unit in the Bidadari area to that of Bidadari BTO would be from $450,000 to $510,000. A 4-room flat in the area goes for a median price range of $640,000 to $740,000, while a five-room costs from $770,000 to $880,000. Estimations do not take into account floor level and other characteristics.
Now that you know today’s approximate value of the BTO, you can evaluate whether HDB’s discount will make it attractive for you to buy a BTO unit and achieve your financial goals. Once HDB announces the pricing for the Bidadari BTO, you can find out how much you'll save when you apply for BTO by minusing off HDB price from BTO value (as estimated via CMA).
Look out for the answers to Questions 3 and 4 here.
(First published in SRX)