In April, a 1,205 sq ft, five-room, build-to-order (BTO) HDB flat at Tiong Bahru View in Bukit Merah was sold for a record $1.2 million. This is the first time that the price of a standard HDB flat surpassed non-standard flats such as Pinnacle@Duxton units, DBSS (design, build and sell scheme) units, terraces and maisonettes, according to OrangeTee & Tie (OTT).
Tiong Bahru View comprises three 40-storey and one 25/30-storey residential blocks with a total of 700 units of studio apartments and three- to five-room flats. It will reach its five-year minimum occupancy period (MOP) next year. Special approval has to be obtained from HDB for a flat to be sold prior to the end of its MOP.
This is not the first time that the sale of a five-room flat at Tiong Bahru View crossed the $1 million-dollar mark. In December, a similarly sized unit in the same block was sold for $1.15 million in a deal brokered by Cindior Ho and Edmund Tan, both associate directors at PropNex.
“Following this [$1.15 million] deal, some owners of four-room flats in the same development are expecting to sell their flats at similar price levels. However, only five-room HDB flats located on a high floor can command such prices because the valuation supports it. For four-room flats, the valuation is still around $900,000,” says Ho.
Limited resale units at Bukit Merah
The buyer of the unit, on Boon Tiong Road, is a semi-retired en bloc beneficiary looking for a replacement property. The buyer and seller of the unit declined to comment.
The view from the high floor of Tiong Bahru View
Tan reveals that the buyer was looking for a HDB flat that is within close proximity to the city as he was previously staying in the central area. “His children actually advised him against buying the flat because they were in favour of him buying a new condo for capital growth and wealth accumulation,” he says.
He adds: “Such buyers just want to buy the flat and pay for it with cash. They don’t need an exit strategy. They just want a convenient place to stay”.
According to Ho, it is not just en bloc beneficiaries who are attracted to Tiong Bahru View. She also receives many enquiries from young couples who are looking for city-fringe HDB flats.
Many of them are willing to forfeit the HDB’s Proximity Housing Grant that helps families who intend to purchase a resale flat that are close to their parents’ homes. “These buyers opt for convenience and would rather not buy a condo that is further from the city fringe. They are also usually cash-rich,” she states.
When it comes to convenience, Tiong Bahru View is within a three-minute walk to Tiong Bahru Plaza which is also connected to Tiong Bahru MRT Station. Within walking distance is Tiong Bahru Market and Hawker Centre as well as a row of quaint cafes and eateries.
Nicholas Mak, executive director of ZACD Group, points out that convenience and a lack of resale units are the reasons for the million-dollar transactions at Tiong Bahru View. “Tiong Bahru is a small HDB estate and there are very few HDB developments that will come up. If buyers really want to buy a flat in this area, units are limited. The alternative estate is Redhill and even in the resale market, there are not that many units,” he observes.
Meanwhile, the record price of $1.2 million is comparable to that of a 764 sq ft, two-bedroom unit at the 99-year leasehold Central Green condo along Jalan Membina. Based on URA caveats, a 764 sq ft, two-bedroom unit was transacted at $1.18 mil ($1,544 psf) on April 17. The condo was completed in 1995.
“If you are a young couple with a $1.2 million budget and you are looking for a city-fringe location, the resale HDB flats are a good alternative, especially for buyers looking for newer properties. Recently completed condo projects like Highline Residences would be out of their budget,” Mak says.
The most recent transaction at Highline Residences was for a 635 sq ft, two-bedroom apartment at $1.43 million ($2,252 psf). The 99-year leasehold project was completed in 2018.
Tiong Bahru View comprises three 40-storey and one 25/30-storey residential blocks with a total of 700 units of studio apartments and three- to five-room flats (Pictures: Albert Chua/EdgeProp Singapore)
“As far as HDB estates go, Tiong Bahru is a very good place to live because of its proximity to the CBD and connectivity, and you have a mix of the café culture and hawker centre fare within walking distance,” Mak adds.
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Looking ahead, Christine Sun, OTT’s head of research and consultancy, expects to see more resale HDB transactions above $1 million. “We may expect more of such transactions to be inked as many new flats in mature estates like Bukit Merah and Queenstown will be reaching MOP in the coming months,” she says.
Eugene Lim, key executive officer of ERA Realty Network, agrees and adds that the price transacted also depends on the flat’s individual characteristics. For instance, the record-breaking unit at Tiong Bahru View is located on a high floor and is right next to Tiong Bahru MRT Station. “Not all flats in the central area possess these attributes so prices can differ from block to block [within the same estate],” he says.
ZACD’s Mak thinks that it is unlikely for en bloc beneficiaries to make up a large part of the demand for $1 million flats in the near term. He highlights that developers’ appetite for collective sales has slowed following the cooling measures introduced in July. As such, the pool of such buyers will thin out.
PropNex’s Ho and Tan concur. “There are owners who believe that there are still many en bloc beneficiaries looking for their replacement homes. So, they are holding out for such buyers and hoping for $1 million for their flats, but this is not a trend that will continue. By the end of this year or early next year, most of the en bloc beneficiaries would have bought their replacement homes,” says Tan.