In the past, million-dollar HDB transactions used to only occur once in a blue moon; however, it is slowly becoming a norm in the resale transaction market in recent years. Though the majority of the million-dollar transactions were non-standard flats such as Design, Build and Sell Scheme (DBSS) flats, over the past 2 years, more standard HDB flats are being transacted at outrageously high prices, and “normal” four-room flats started to cross the $1 million mark for the first time in 2018.
Now you may ask why are people willing to pay the 7-figure sum for HDB flats? Well, there may be a few factors contributing to this phenomenon. Let’s delve deeper into these factors.
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Location
Needless to say, a good location definitely translates to a higher resale price for any type of residential housing, be it private or HDB. People are willing to pay a premium for locations with convenient access to amenities such as MRT stations, schools or shopping centres. Therefore, prime locations are constantly attracting buyers and calling high transaction prices. Thus, it is one of the most important factors when it comes to determining the transaction prices and also the deciding factor that affects people’s decisions when they are purchasing a new home.
The following are the few HDB hotspots with the most million-dollar transactions:
- Bishan Street 13
- 7 Boon Keng Road
- 441A Clementi Avenue 3
- 50 Commonwealth Drive
- 18D Holland Drive
- 148 Mei Ling Street
- Natura Loft
- The Peak
- The Pinnacle @ Duxton
- Toh Yi Gardens
From the list above, most people are willing to pay record-high prices for flats in the central areas, where most of the mature estates are located. This is attributed to 2 reasons: firstly, it is because fewer new flats have been launched in these matured estates which usually come smaller and at a higher price, and secondly, flats in these mature estates are usually within close proximity to MRT stations or shopping malls and most people generally favour such convenience.
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Unique architectural designs
The unique designs of these HDB flats definitely appeal to most, and just by looking at the exterior of the building, it definitely does not look like a typical HDB flat. For example, the Pinnacle @ Duxton includes 2 of the longest sky gardens in the world.
Another example would be the Clementi Towers which was the first HDB project to be integrated with a mall and a bus interchange. These are just some of the reasons why people are willing to pay a premium to enjoy such unique features which resulted in record-high transaction prices for HDB flats.
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Age of the building
The property’s age actually affects the valuation of the property so with a younger building age, the property would be able to fetch a higher price as compared to an older building. For example, there was a Queenstown unit that was sold for $1.1million which had a remaining lease of 93 years. Many people are still afraid that they would not be able to sell off their properties should the remaining lease be much lower.
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Sky-high units
Most people are willing to pay a premium if the unit is located on higher floors because they want to enjoy the unobstructed view. This is also evident from the million-dollar HDB transactions where almost all of these units are situated on the higher levels.
Many even chose to give up the option of purchasing private properties just because the HDB flat provides a more spectacular view. The table below is a breakdown of how much a five-room flat has been sold for since 2015, based on the floor of the unit.
| Floor where the unit is situated | Price fetched |
| 40th floor or above | 73% were being resold for $1 million or more |
| 31st to 39th floor | Only 37% were resold for S$1 million and above. |
| Below 31st floor (19th to 30th floor) | A mere 2.7% fetched S$1 million and above. |
Therefore, we can conclude that the higher the floor of the unit, the higher the price it can fetch since many people feel that it is worth it to pay a premium for the dollar view.
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Size of the property
In recent years, the size of new properties – both HDBs and private properties – have been shrinking, so this may be a contributing factor to homebuyers’ preference for larger HDB units, resulting in the prevailing trend of million-dollar HDBs.
Conclusion
Though million-dollar HDB transactions are becoming more prevalent in recent years, they are still considered a minority when it comes to HDB resale transactions. But with cooling measures in place, buyers will most likely tend to be conservative, so there is no need to fear over such headline-making or record-breaking transactions that may take over the HDB resale market.
