Surprised by the $1.5 million HDB? Let’s consider the bigger picture

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Singapore’s property market frequently makes media headlines, however our latest report about the auction of a massive (adjoined) HDB flat in Tiong Bahru for $1.5 million generated a lot of controversy. For those who don’t know that a 1,894 square feet HDB apartment at 50 Moh Guan Terrace in the middle of Tiong Bahru shattered records when it was purchased at $1.5 million, surpassing that previous mark that was $1.418 millions for a five-room HDB located at The 92 Dawson Road. The price is more shocking when you consider that the flat was constructed in 1973 and is leased for less than 49 years. What’s the reason for this astonishing cost? Perhaps there are other aspects that make this price acceptable and affordable?

Examining the price on an PSF basis
Yes indeed, the HDB located in Tiong Bahru clinched the title of being the most expensive HDB in the history of. But, when it comes to the price per square foot (PSF) it isn’t even the most expensive for the block it’s located within. The apartment at 50 Moh Guan Terrace went for $791 per square foot. A another three-room apartment located in the same block was sold at $807 per square foot earlier this year. Be aware that this block is on an lease that is just 49 months. Actually, three year ago, the block was part of a deal which was sold for $896 per square foot. There was no question about the lease back then.

For the most expensive PSF for a property in HDB history, you must examine the Pinnacle @ Duxton situated in Tanjong Pagar, arguably Singapore’s most renowned as well as record-breaking HDB development. The development was completed in April of 2023. an upper-floor four-room apartment on 1C Cantonment Road sold for an astounding $1,369 PSF which is 73% greater on an PSF basis, compared to a $1.5 million apartment at Tiong Bahru. The final cost? A hefty $1.4 million, for a flat of 1,022 square feet. This is because the PSF is for Pinnacle and Duxton flats has consistently exceeded the threshold of $1,000. PSF threshold.

The Rareness of the Jumbo HDB Flats within Central Areas
Another factor that contributes to the price is the shortage of huge HDB flats, particularly in central areas such as Tiong Bahru and Bukit Merah. As of 2023 there had been just 37 deals for HDB flats with more than 1,800 square feet. Of those, 31 were in Woodlands four in Yishun and one at Ang Mo Kio, and one transaction located in Tiong Bahru. This is the one we’re talking about.

Tiong Bahru is one of Singapore’s most sought-after neighborhoods and is known for its rich past beautiful architecture, and an array of boutiques and cafes. It also has an excellent connectivity and is close to the city’s business district. It is also close to the central business district. URA Master Plan 2019 has been allocated Tiong Bahru for further development and revitalization, making properties located in the area attractive investments. The limited availability of these apartments in prime locations adds an additional cost to their prices. In the future, as Singapore’s land gets difficult to come by, these massive flats will be even more sought-after.

HDB remains the most affordable housing asset class in Singapore
It is crucial to consider it as a Tiong Bahru HDB within the wider property market. Despite rising costs, HDBs are still the most affordable housing option in Singapore. For a better understanding, new homes in Tiong Bahru, such as Highline Residences, Regency Suites along with Twin Regency can be found selling for upwards of $2,000 per square foot. A comparable-sized apartment similar to the Tiong Bahru large flat could cost buyers approximately $3.5 million! Some older developments such as Central Green Condominium, Harvest Mansions as well as Meraprime have an average of $1,500 per square foot.

The prices of larger HDBs appear to be adjusting
The Singapore government enacted a series of cooling measures for HDBs from September of 2022. In short, they included the obligation for residential private property owners and their former owners to wait 15 months after they sold their property before they can purchase a flat that is not subsidised for resales. In addition, the Loan-to-Value (LTV) ratio reduced to 85% to%. It is likely that these changes will have the most impact on the most expensive HDBs which are usually the five-room or larger HDBs.

From the end of October 2022 until May 2023, the prices of 5-room HDBs have been unchanged. Contrastingly, prices for 4-room and 3-room HDBs have increased by 2%. Additionally, the number of billion-dollar HDB deals has been constant. After having reached a high of 45 million dollars HDB operations in August 2022. The average number for this year is approximately 35.

Conclusion Remarks

The $1.5 million cost of this Tiong Bahru HDB flat is surely eye-catching, a more thorough study provides insights into the factors that determines the cost. The lack of jumbo HDB flats in areas of high demand, the affordable PSF and the relative cost of HDBs are all factors in pricing trends.

In Singapore, as the property marketplace continues to change as it continues to grow, it’s crucial for homeowners and buyers to keep an attention to the figures that go beyond the headline figures.