CAPTION: A five-room flat at SkyTerrace@Dawson was transacted for $1.418 million in July, the most expensive HDB resale flat to date (Source: Albert Chua/ The Edge Singapore)
SINGAPORE (EDGEPROP) - A record 295 million-dollar HDB resale flats were transacted from January to October this year. This is based on a PropNex Research report released on Oct 19 on the survey findings gathered from 30 PropNex salespersons who brokered the sales of million-dollar HDB resale flats between 2021 and August 2022.
“The million-dollar HDB resale flats that changed hands in 2022 were largely located in mature estates with a comprehensive range of amenities and convenient access to public transport nodes,” the report says. Bishan saw the most number of million-dollar HDB resale flats transacted in 2022, at 41, followed by the Central Area and Toa Payoh at 37 and 34 transactions respectively.
Being on a high floor was ranked the top attribute for million-dollar HDB resale flats, according to the survey findings. Flats located on mid- to high floors accounted for the majority of the million-dollar resale flats sold in 2022: 33% were on the 10th to 20th floors, while over 42% were on 20th floor and above.
Proximity to MRT stations and interest in the specific neighbourhood or town are tied for second place, with views of the surrounding following closely behind – for example, flats at Marine Parade or Pinnacle@Duxton with views of the ocean or city skyline. Other key attributes include good orientation, generous floor area and good physical condition of the flat.
Over 38% of the million-dollar resale flats transacted in the first nine months of 2020 have a floor area of more than 1,292 sq ft, with only 9% of the flats smaller than 1,076 sq ft in size. In terms of flat types, the majority, or 64%, are five-room units, 27% are executive flats and 9% are four-room units.
The survey findings show that over two-thirds of the buyers of million-dollar HDB flats are married couples (with or without children), while singles and widows account for the remaining one-third.
Over 50% of buyers work in white-collar or professional vocations, followed by manager and administrative vocations at 19% and unemployed at 12% – mainly semi-retired or retired buyers above 50 years old. Self-employed buyers account for 11%.
More than half of the buyers (54%) cited the motivation as downgrading from an existing residential property, according to the survey. Most of the downgraders are from buyers aged 40 years old and above, who previously lived in a condominium or landed property and purchased the million-dollar flat as a right size for retirement home. This group of buyers is able to pay higher prices as well as cash-over-valuation (COV) from the sale proceeds of their disposed private home.
In addition, the findings show 60% of the transacted million-dollar resale flats received two or more offers from interested parties and the buyers paid a higher COV of above $50,000 to secure the unit. A sizeable portion (48%) among the buyers who had paid COV had cited downgrading as a reason for purchasing the flat. Twenty-seven per cent of the buyers did not pay any COV for their flat purchase.
“The new cooling measures introduced from Sept 30, 2022, specifically the 15-month wait-out period before those who sold their private homes can buy a resale HDB flat, will lead to a slight moderation in demand for HDB flats,” the report says. Larger units will be disproportionately affected, as they tend to be favoured by private property downgraders.
“The new 15-month wait-out period, introduced as part of a slew of cooling measures on Sept 30, will soften the demand for million-dollar HDB flats, keeping prices in check,” the report says. However, despite the slight dip in October for million-dollar HDB resale flat transactions, PropNex believes they will remain sought-after given their attractive attributes.