IT professional K.S. Gee paid $1.068 million for a five-room flat at Clementi Towers, the highest to date for the first Housing Board project to be integrated with a mall.
He believes it is “a fair deal”.
He is the fourth person to have paid over $1 million for a flat at Block 441A Clementi Avenue 3 since the block, which is linked to Clementi Mall, reached its five-year Minimum Occupation Period (MOP) last year.
The first standard flat to sell above $1 million was also at the same block, which is one of two 40-storey blocks of replacement flats under HDB’s Selective En bloc Redevelopment Scheme.
Transacted in August 2016, the 116 sq m five-room flat located between the 16th and 18th floors sold for $1.01 million.
Certain classes of public housing – like executive apartments, those built under the Design, Build and Sell Scheme (DBSS) and flats at the Pinnacle @ Duxton – have regularly fetched high prices.
But standard flats that sell for over $1 million started emerging only two years ago.
Since 2016 to May this year, only 10 standard flats have sold for over $1 million, including six last year.
Three have sold for over $1 million for the first five months of this year.
Analysts believe the buyers were mostly private-property downgraders and displaced sellers from the collective sale market.
Thanks in part to the collective sale fever, last year saw a total of 46 flats that sold for $1 million and above.
Most of these were non-standard flats including Type S2, maisonette, terrace and executive apartments, and DBSS flats. This is more than double the 20 sold in 2016.
For the first five months this year, 18 have made the $1 million mark.
A private-property downgrader, Mr Gee, 45, used proceeds from the sale of his condominium unit at The Gale in Loyang to buy the 119 sq m Clementi Towers HDB flat, which has 94 years left on the lease. The valuation was $960,000.
Mr Gee, who is married with three children, bought the flat in April this year and relocated to Clementi to be closer to his workplace in Tuas. “Condominiums give you a feeling of exclusivity, but I like the busy vibrant feel of Clementi, especially as the flat is near the MRT station, mall, schools, National University of Singapore, and other amenities.
“Because I live on a high floor and have views of the sea and Bukit Timah, there is still a certain degree of exclusivity,” he said. “Even if the lease had been 50 or 60 years, it doesn’t matter to me because this flat has good attributes.”
Mr Gee’s flat, which is above the 30th storey, is cheaper than a condo, which can easily cost $1.3 million in this area.
The seller, who is in his 30s, is upgrading to a condo.
A total of 103 flats have sold above $1 million since 2012.
ERA Realty key executive officer Eugene Lim said: “That year was the peak of the previous collective sale cycle. That year alone, HDB resale prices grew 6.5 per cent.
“The first million-dollar flat was an executive apartment that sold in July 2012.”
Of the 103 flats, 60 per cent were non-standard flats, 30 per cent were DBSS, and the remainder were standard flats.
The 10 standard million-dollar flats are all five-room high-floor units located between the 16th and 42nd storeys, and in mature estates such as Queenstown and Clementi, and are near MRT stations and amenities.
Block 50 Commonwealth Drive, which saw three units sold around $1 million last year, is near the Orchard Road fringe and downtown area. The $1 million flats at Block 23 Ghim Moh Link and Blocks 18C and 18D Holland Drive are near The Star Vista, Rochester Mall and Holland Village.
More resale flats could hit the $1 million mark in the next two years as more flats in Queenstown such as SkyVille @ Dawson and SkyTerrace @ Dawson reach MOP in 2020.
Agents have been getting inquiries from displaced en bloc sellers who have collected their proceeds.
Some don’t mind purchasing million-dollar older flats. They get to keep more cash for retirement, instead of paying much more for a large private apartment.
Also contributing to strong sales: Owners of well-located DBSS flats such as Natura Loft in Bishan Street 24 and City View @ Boon Keng started selling their flats after these reached MOP in 2016, Mr Lim noted. The Peak @ Toa Payoh also started seeing million-dollar sales after reaching MOP last year.
Similarly, Pinnacle @ Duxton saw nine flats sold in the million-dollar range in 2015 after they reached MOP starting from late 2014.
That jumped to 11 in 2016. There is a correlation between MOP and a spike in the number of transactions. Certain buyers will likely pay a premium for these HDB flats, which are usually large, well-located, high-floor units with special layout designs. Even for four units that were older than 40 years, these managed to command over $1 million as they were rare terrace units between 249 and 280 sq m in size.
For a 156 sq m executive apartment at Block 148 Mei Ling Street, which snagged the second-highest record price to date at $1.16 million, its size outweighed the fact that it had 77 years left on its lease.
Mr Lim said million-dollar flats are the exception, not the norm.
“We may see some newer flats hitting the $1 million mark, but these would have to have standout characteristics… For most HDB flats, buyers will pay only at a price that is supported by valuation,” he said.
Adapted from: The Straits Times, 1 July 2018