Is it a Good Deal?: $860,000 for a three-room HDB flat

By Elizabeth Choong

/ EdgeProp Singapore |

September 4, 2024 12:33 PM SGT

This year, a total of six three-room HDB flats in Bukit Merah transacted for at least $800,000. (Photo: Albert Chua/EdgeProp Singapore)

SINGAPORE (EDGEPROP) – Last month, a three-room HDB flat at 10A Boon Tiong Road was sold for a record breaking $860,000 ($1,289 psf). The 667-sq ft flat is on the 34th storey and was completed in 2016, making it the highest transacted price ever for a three-room HDB.

We used our analytics tool, 'Is it a Good Deal?', to determine whether the buyer of the aforementioned HDB flat along Boon Tiong Road secured a bargain.

Surrounded by amenities

The three-room flat along Boon Tiong Road is located within the Bukit Merah Planning Area, a popular residential area due to its central location and numerous amenities. The flat is within walking distance of Tiong Bahru and Havelock MRT Stations (see Map 1), Tiong Bahru Plaza, Tiong Bahru Market and Food Centre, Beo Crescent Market, and Havelock Road Cooked Food Centre. Primary schools within a 1km radius include Alexandra Primary School and Zhangde Primary School (see Screenshot 1).

Read also: Hidden Gems: Affordable homes in popular Redhill

Source: EdgeProp LandLens (as at 3 September 2024)

Source: EdgeProp Is it a Good Deal (as at 4 September 2024)

Do amenities and a long tenure justify the higher price?

Our 'Is it a Good Deal?' analytics tool indicates that the transacted price for the HDB flat is significantly higher than the average price for the district. On the plus side, the flat has a long remaining lease and numerous nearby amenities (see Screenshot 2).

Source: EdgeProp Is it a Good Deal (as at 3 September 2024)

Spike in number of three-room flats fetching at least $800,000

At the time of writing, 29 three-room flats have been sold for at least $800,000 in Singapore this year. Of these 29 transactions, six were for flats in Bukit Merah. In contrast, four three-room flats were transacted for at least $800,000 last year, and only one was in Bukit Merah (see Chart 1). It is also noteworthy that prior to 2021, three-room flats islandwide were transacted at prices below $800,000.

Last month, two three-room flats in Bukit Merah were sold for at least $800,000. One of them is the aforementioned flat along Boon Tiong Road. The second flat is located at 57 Havelock Road and fetched $800,000 ($1,078 psf). The 742-sq ft flat is on the 20th storey and was completed in 2013, making it three years older than the flat along Boon Tiong Road. In May, a three-room flat at 58 Havelock Road was sold for $818,000 ($1,102 psf). The flat is on the 34th storey and also measures 742 sq ft (see Screenshot 3).

Source: EdgeProp Is it a Good Deal (as at 4 September 2024)

The lower transacted prices for the flats along Havelock Road could be due to their greater distance from MRT stations (see Map 2), which makes it less convenient for residents who use the MRT for their daily commute. The flats along Havelock Road are more than 500m away from Tiong Bahru and Havelock MRT Stations, while the flat along Boon Tiong Road is approximately 300m from Tiong Bahru MRT Station and approximately 450m from Havelock MRT Station.

Source: EdgeProp LandLens (as at 4 September 2024)

Other amenities near the flats along Havelock Road include Valley Point Shopping Centre, Beo Crescent Market, Havelock Road Cooked Food Centre, and Tiong Bahru Plaza. Primary schools located within a 1km radius include Alexandra Primary School, River Valley Primary School, and Zhangde Primary School.

Weaker price growth for three-room flats in Bukit Merah than Central Region and islandwide

The average resale price for three-room HDB flats ($683 psf) in Bukit Merah has consistently trended below that of their four-room ($852 psf) and five-room ($782 psf) counterparts (see Chart 2). Furthermore, the average price for the three-room flats has grown at a slower pace (27.2%) since 2020, compared to that for four-room (27.4%) and five-room (30.8%) flats.

Source: EdgeProp Market Trends (as at 3 September 2024)

However, the average resale price for three-room flats in Bukit Merah ($683 psf) has consistently trended above that of three-room flats in the Central Region ($638 psf) and islandwide ($591 psf) (see Chart 3). Since 2020, the average price for flats in Bukit Merah has grown at the slowest pace (27.2%) compared to their counterparts in the Central Region (39.3%) and islandwide (39.4%).

Source: EdgeProp Market Trends (as at 3 September 2024)

It is notable that the aforementioned three-room HDB flat along Boon Tiong Road ($1,289 psf) transacted at $606 psf above the average price for three-room flats in Bukit Merah ($683 psf) and $651 psf above that of three-room flats in the Central Region ($638 psf). The transacted price is more than double the average price for three-room flats islandwide ($591 psf).

However, the transacted price of $1,289 psf is significantly below the average resale price of 99-year leasehold condo units in Bukit Merah that measure 750 sq ft or less ($2,131 psf) (see Chart 4). The price difference between the two types of residential properties has widened in recent years. This year, the price gap is $1,448 psf, up from $1,437 psf last year and $1,372 psf in 2020. Furthermore, three-room flats in Bukit Merah (27.2%) have achieved stronger price growth since 2020 compared to small leasehold condo units (11.6%) in the same neighbourhood.

Source: EdgeProp Market Trends (as at 3 September 2024)

Conclusion

Last month’s transaction of a three-room HDB flat at 10A Boon Tiong Road for $860,000 is a record high for three-room flats in the Bukit Merah Planning Area. However, the number of three-room flats fetching at least $800,000 has spiked in recent years. In the first eight months of this year, 29 such transactions were recorded for flats islandwide. Of these 29 transactions, six were for flats in Bukit Merah.

The transacted price of $860,000 ($1,289 psf) for the three-room flat at 10A Boon Tiong Road is significantly higher than the average resale price for three-room flats in Bukit Merah ($683 psf), the Central Region ($638 psf) and islandwide ($591 psf).

Bukit Merah is popular among homebuyers because of its central location and numerous amenities. Many desire to live in the neighbourhood but often find themselves priced out of the market. For buyers determined to live in Bukit Merah, it would make financial sense to purchase a three-room HDB flat instead of a leasehold condo of a similar size. The transacted price for the HDB flat at 10A Boon Tiong Road ($1,289 psf) is $842 psf lower than the average resale price for similarly-sized leasehold condo units in the same neighbourhood ($2,131 psf). Furthermore, three-room HDB flats (27.2%) in Bukit Merah have achieved stronger price growth than their condo counterparts (11.6%) since 2020.

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

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