$1 million HDB flats 'best value' for money

More cash-rich buyers find that a premium HDB flat commanding a seven-figure sum is the best value for their money. -ST 
Rachel Chang

Thu, Oct 11, 2012
The Straits Times

A growing group of cashed-up home buyers - armed with a budget of $1 million or more - is waiting for premium Housing Board flats.

They are usually private-property downgraders or young couples armed with budgets that would previously take them to condominium showflats only, said real estate agents.

$1m HDB flats 'best value' for money Click on thumbnails to view

With the growing price differential between private property and HDB flats in prime locations such as Bishan, Queenstown and Clementi, they find that a premium HDB flat which commands a seven-figure sum is actually the best value for their money.

Data from the Singapore Real Estate Exchange showed that in five HDB towns - Clementi, Bukit Merah, Bishan, Toa Payoh and Queenstown - the price per square foot (psf) of flats has increased 15.5 per cent in the past two years.

In contrast, the price psf for non-landed private properties in those areas has increased by 27.7 per cent in the same period - giving rise to a widening price gap.

Nationwide, the gap has also grown but at a slower pace. Over the past two years, the psf price of resale flats grew 16 per cent, while that of private residential units grew 23.4 per cent.

It is also difficult to find condo units above a certain size in these locations, said agents.

The executive flats which have sold for more than $900,000 this year average about 1,600 sq ft.

The $1 million Mei Ling Street executive maisonette, at 1,615 sq ft, cost $620 psf. This is about half of what units in the nearby Queens condominium go for.

Real estate agent Henry Wong, who recently sold an executive apartment in Toa Payoh Lorong 2 for $910,000, said that such buyers usually start off looking for private property, sometimes even in further-off locations.

"After comparing options, they find that an HDB flat is much more worth it. It's difficult to find a four-bedroom condo and it will not cost you less than $2 million," he said. He is now looking for such flats for two separate buyers in Toa Payoh.

Queenstown flat hits $1 million mark Click on thumbnail to view

Certain flats, like the executive maisonettes in Queenstown and Bishan, cause a feeding frenzy among agents every time one comes up for sale.

Agent Thomas Hee, who represented the buyers of a $980,000 Bishan Street 13 flat, said that there are about 20 to 30 buyers waiting for a similar unit to come up for sale.

Agent Irene Ho, who represented the sellers of the $1 million Mei Ling Street unit, said that she is in touch with several other residents of such flats on Mei Ling Street, although these residents are not currently planning to sell their flats. "I call them every few months, just to keep in touch and see if things have changed."

Residents report real estate agents' fliers slipped daily under their doors, phone calls every week, and even late-night house visits from agents.

"Some don't like it," said Mrs Pamela Tao, 55, who lives on Mei Ling Street. "They come quite late. You're just relaxing at home and don't want to entertain them."

But interest looks unlikely to abate as young professionals like Ms Oh Chai Yee, 26, take their house hunt to top-end HDB flats.

The lawyer and her boyfriend have a first-home budget of $1 million to $1.5 million, which they have found can get them only a two-bedroom or smaller condominium in locations like Clementi or Mountbatten.

"With our combined income, we are not eligible for Build- to-Order flats or even executive condominiums like Heron Bay," she said. "And we want a place that is at least 1,000 sq ft, in a good location."

As they have gym memberships, they do not mind forgoing the amenities of a condominium, and find the absence of management fees a bonus.

"From our point of view, these HDB flats which go for $1 million are a decent deal."

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