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Could your HDB flat be worth $1,000,000 too? Here's a checklist

Unless you live under a rock, you would have seen million-dollar HDB flats making the headlines all year round in 2022. The month of September saw a record high of 45 HDB flats sold for above S$1,000,000. It’s an eye-watering number for buyers, but one that lights up the faces of HDB dwellers.

Some might say: whatever happened to HDB flats being accessible to the masses? Like many others, I grew up with the notion that public housing is meant to be an affordable, fuss-free, and decently-sized first home before one upgrades to a private segment. But whether we like it or not, the value of $1 million has changed significantly over the years. Paying S$1 million for a home is no longer as incredulous as before, and in the same way that people have accepted that a CEO costs S$100,000 for 10 years, they’re warming up to the idea of paying ten times that amount for 99-year leaseholds.

We may as well embrace it, and acknowledge that the price tag is no longer the hurdle it used to be for buyers. But who are they and what are their reasons?

Who is “spoiling” the market?

At least until the recent slew of cooling measures were introduced, cash-rich retirees were top fans of S$1 million HDB flats. Before, empty nesters who could no longer maintain a landed home had their eyes set on spacious 5-room HDB flats. Now, they’re looking for new 4-room flats when downgrading, which explains why the “windfall” occasionally befalls the latter.

In my view, the second group is made up of young buyers who have begun to value property on a price-per-square-foot basis (in Tiong Bahru alone, there are condo units that cost twice as much as an HDB flat in the neighbourhood) To this savvier bunch, S$1000 per square foot offers enough value for them to forgo the bells and whistles. Never mind that they’re compromising on a prestigious address or swanky facilities, or that they have to abide by the 5-year MOP. Besides, the grants available can bump their budgets up to S$1 million – something they obviously can’t take advantage of when purchasing private property.

That being said, there’s a third bunch of people who buy S$1 million flats because they have to. It’s no longer a want, but a need, and herein lies your opportunity.

What makes a million-dollar HDB flat?

Below is a simplistic checklist of characteristics:

1. Central location

This is a no-brainer, but just how central are we talking about? Prime areas have seen an increasing number of S$1 million 4-room flats, with Dawson and Duxton as the usual suspects. In the first half of 2022, all the transactions at Pinnacle@Duxton made the mark, hitting close to S$1.4 million for a 5-room unit at one point. The ones that didn’t aren’t shabby either, and mostly hover in the S$900,000 range.

Homeowners in the city’s fringes stand a good chance too. Neighbourhoods like Boon Keng, Kallang, and Whampoa have made the mark and will continue to be well-poised for future $1 million transactions.

2. Older 5-room flats

As new HDB flats get smaller and smaller, 5-room HDB flats have become something of a luxury. Even as the average PSF rose by over 20%, the 2022 BTO launches in mature estates saw soaring demand for 4- and 5-room flats. Since each prospective buyer had to edge out close to 20 other contenders, old 5-room flats have never been more enticing.

In the first half of 2022, these were transacted above S$1 million in neighbourhoods Queenstown, Toa Payoh, Bukit Merah, and Bishan. In mature estates where young buyers can access grants by living close to their parents, their pockets run deeper, too.

3. Proximity to school

Is there a school within a 1km radius of your home? If so, you’re speaking the love language of young parents across Singapore. Convenience weighs heavily on their minds, and if the school in your area happens to be prestigious, you pretty much have an end game on your hands. The Tampines HDB flat that went for S$1.013 million last September, for instance, was within a 1km radius of St. Hilda’s Primary and Secondary Schools.

4. Master plan growth

If your neighbourhood is expecting major changes, you could also be in luck The URA Master Plan in 2019, for instance, hinted at an upcoming residential and industrial district in the East, the redevelopment of Paya Lebar, and the development of a new estate in Tengah. When prices of private property rise in these areas, those of HDB flats will naturally follow suit as buyers expect to recover their S$1 million outlay down the line.

5. Rarity

What homeowners lack in location can be made up for with rarity. Buyers are more likely to pay an arm and a leg for highly coveted flat types, including executive maisonettes, executive apartments, and jumbo flats. In 2022, the latter was sold for as much as S$1.04 million in neighbourhoods like Pasir Ris, Bedok, and Yishun. You heard us right – if a jumbo flat in the infamous Yishun is worth that much, the appeal of these “limited edition” types speaks for itself.

While buying a million-dollar HDB flat isn’t for everyone, and the price tag isn’t representative of the public housing market as a whole, they will become increasingly common in years to come. If you find yourself in a pickle, unsure if you should be forking out $1 million for an HDB flat or topping up to enter the private segment, I’m more than happy to offer my two cents’ worth. Reach out to me (Harvey Chia) at 9199 9141,


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