SINGAPORE (EDGEPROP) – Earlier this month, a five-room HDB flat at 138B Lorong 1A Toa Payoh was sold for $1.5 million ($1,222 psf). The 1,227-sq ft flat is located on the 31st to 33rd storeys. Despite the eye-watering price, four other five-room flats along the same street and in the same HDB project (The Peak @ Toa Payoh) fetched higher prices this year.

We used our analytics tool, "Is it a Good Deal?", to determine whether the buyer of the aforementioned HDB flat on Lorong 1A Toa Payoh managed to secure a good deal.

Everything at your doorstep

There are numerous amenities within walking distance of the flat. Toa Payoh West Market and Food Centre, Toa Payoh MRT Station, Toa Payoh Bus Interchange, and Toa Payoh Town Centre are all within a 500m radius (see Map 1). Additionally, there are three primary schools within a 1km radius, namely Marymount Convent School, Kheng Cheng School, and CHIJ Primary (Toa Payoh). The reputable Raffles Girls' School (Secondary), CHIJ Secondary (Toa Payoh), and Raffles Institution (Junior College) are also located within a 1km radius.

Read also: October BTO exercise offers 8,573 flats for sale, Prime and Plus projects subject to subsidy clawback rates of 6% to 9%

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Plus points including a long remaining tenure and a variety of amenities

Our "Is it a Good Deal?" analytics tool highlighted the variety of amenities near the flat, including a park, a mall, and three MRT stations, one of which is the dual-line Caldecott MRT Station serving the Circle Line and Thomson-East Coast Line (see Screenshot 1).

Our tool also pointed out that the transacted price is not above the average price for The Peak @ Toa Payoh, and the flat has a long remaining tenure of 87 years (see Screenshot 2).

Almost 10% of the  million-dollar five-room flats transacted this year is in Toa Payoh

At the time of writing, 322 five-room HDB flats have been sold for at least $1 million, an increase from 207 transactions last year. Of the 322 million-dollar five-room flats, 32 are located in Toa Payoh (see Chart 1), which is almost equal to the 33 five-room flats in Toa Payoh that were sold for at least $1 million last year.

Despite the similar number of million-dollar five-room flats in Toa Payoh, they represent a smaller percentage of such flats islandwide. For the first 10 months of this year, the 32 million-dollar five-room flats in Toa Payoh account for 9.9% of all million-dollar transactions for five-room flats in Singapore, down from 15.9% last year, indicating that more five-room flats outside Toa Payoh are transacting for at least $1 million.

Excluding the aforementioned flat at 138B Lorong 1A Toa Payoh, four other five-room flats along the same street have sold for at least $1.5 million this year (see Table 1). The other four flats are from the neighbouring blocks of 138C and 139A. All three blocks are adjacent to each other and are part of The Peak @ Toa Payoh (see Map 1).

A flat on the 40th to 42nd floors of 139A Lorong 1A Toa Payoh fetched the highest price of almost $1.569 million ($1,246 psf) in January. The five-room flat measures 1,259 sq ft and is slightly larger than the flat at Block 138B. The higher floor and larger size could have contributed to the higher transacted price. For comparison, a five-room flat in the same block and of the same size was sold in June for a lower price of $1.54 million ($1,223 psf). The only difference is that the cheaper flat is located on a lower floor, between the 31st and 33rd storeys.

Read also: Is it a Good Deal?: $1.3 million for a five-room HDB flat in Bidadari

Price for five-room flats in Toa Payoh higher than central region and islandwide

Despite the recent high transacted prices for five-room flats in Toa Payoh, the average resale price for such flats actually slipped below that of four-room flats (32.9%) in the same town in 2021 (see Chart 2). This could be due to the stronger price growth achieved by four-room flats since 2021 compared to their five-room counterparts (23.3%). The strongest price growth was achieved by three-room flats (37%), but the average resale price for three-room flats ($589 psf) remains the lowest compared to four-room ($804 psf) and five-room ($778 psf) flats.

The average resale price for five-room flats in Toa Payoh ($778 psf) is higher than that of their counterparts in the central region ($775 psf) and islandwide ($574 psf) (see Chart 3). Additionally, the price growth since 2021 for five-room flats in Toa Payoh (23.3%) has surpassed that of five-room flats in the central region (19.8%) and islandwide (19.6%).

It is notable that the $1,222 psf paid for the five-room flat at 138B Lorong 1A Toa Payoh is $444 psf higher than the average resale price of $778 psf for five-room flats in Toa Payoh. It is also $447 psf higher than the average price for five-room flats in the central region ($775 psf) and $648 psf higher than that for five-room flats islandwide ($574 psf).

However, the transacted price of $1,222 psf is significantly below the average resale price of $1,826 psf for 99-year leasehold condo units in Toa Payoh that measure between 1,200 sq ft and 1,300 sq ft (see Chart 4). Additionally, the price difference between both property types has widened from $799 psf in 2021 to $1,048 psf this year, indicating that five-room flats in Toa Payoh have become more affordable compared to their closest alternative. The wider price gap could be due to the stronger price growth achieved by leasehold condos (27.7%) since 2021 compared to five-room flats (23.3%).

Conclusion

The eye-watering $1.5 million price tag for a five-room flat along Lorong 1A Toa Payoh is not surprising, because it marks the fifth transaction this year to cross the $1.5 million benchmark for five-room flats in The Peak @ Toa Payoh. Further examination of transactions indicates that highest price reached was nearly $1.569 million. Our analytic tool also indicates that the transacted price of $1.5 million is in line with the average price for The Peak @ Toa Payoh.

The high transacted prices for five-room flats along Lorong 1A Toa Payoh could be due to their proximity to numerous amenities, several MRT stations, and a number of reputable schools. Additionally, the flat has a long remaining tenure of 87 years.

Read also: October 2024 BTO sales exercise will comprise 1 Prime project, 7 Plus projects, and 7 Standard projects; first BTO launch under location-based classification

While the transacted price of $1,222 psf is higher than the average resale price of $778 psf for five-room flats in Toa Payoh, it is still significantly below the average resale price of $1,826 psf for 99-year leasehold condos of similar size in the same town. As such, paying $1,222 psf for the five-room flat at 138B Lorong 1A Toa Payoh is comparatively more affordable than purchasing a nearby leasehold condo unit of similar size.

To learn more about this transaction, and whether it is a good deal, click here.

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