Skyscraper resale flat prices in Singapore hit new highs despite Covid-19 crisis

Skyscraper resale flat prices in Singapore hit new highs despite Covid-19 crisis

Sep 13, 2020

But these mega deals are still the exception and account for only a fraction of overall transactions

Grace Leong
Business Correspondent

https://www.straitstimes.com/busines...despite-crisis

Pandemic or not, buyers are still paying top dollar for skyscraper HDB resale flats, particularly those at Pinnacle  @   Duxton and other prime areas.

New price records were hit even as the number of million-dollar HDB resale deals fell year-on-year in the first seven months as the pandemic took its toll on the economy and employment.

Defying the odds, a five-room flat at Pinnacle  @  Duxton in Cantonment Road fetched a record $1.232 million in March, while a four-room unit sold for $1.186 million in June. Both were on the 40th-42nd storeys, with a remaining lease of almost 90 years.

"No doubt we are in a recession but there are still buyers with substantial savings, or are more confident about their job prospects. (Then there are those) who, due to the downturn, may wish to downgrade from private property to these prized resale flats," said Ms Wong Siew Ying, head of research at PropNex.

But these mega deals are still the exception rather than the norm and account for only a fraction of overall HDB resale transactions.

In the first seven months of this year, the number of resale flats that sold for at least $1 million fell to 33 in the first seven months this year - just 0.3 per cent of a total of 11,217 HDB resale transactions - compared with 44 in the same period last year, PropNex noted.

This is in line with the slowdown in overall HDB resale volumes following the two-month-long circuit breaker and the weak economic outlook.

In comparison, there were 64 such deals last year, 71 in 2018 and 46 in 2017. The years 2018 and 2019 were stand-out years with the highest number of $1 million deals due to collective sale flat owners looking for replacement homes who did not mind paying above $1 million for HDB flats with great attributes, said analysts.

Even now, they say resale flats in prime locations with panoramic views, or large units on high floors with longer remaining leases, or units near MRT stations within a 15-minute ride of the Central Business District, can continue to command the million-dollar price tag.

"If a 500 sq ft to 800 sq ft new condo unit at One Pearl Bank can cost an average price of around $1.6 million or $2,538 psf, it's not surprising that some buyers won't mind paying $1 million for larger and newer HDB resale flats in areas near the CBD like Pinnacle @ Duxton and Boon Tiong Road," said Ms Christine Sun, head of research and consultancy at OrangeTee & Tie.

Other than Pinnacle  @  Duxton, there has not been much new Build-To-Order stock in the central area - another factor supporting prices, she added.

Four-room flats began hitting the million-dollar mark, starting in June 2018, with a 1,033 sq ft unit at Pinnacle  @  Duxton, which snagged $1.028 million. Eight more four-room flats were transacted at $1 million and above later that year.

Last year, there were 10 such sales: nine in Cantonment Road and one in Boon Tiong Road.

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From January to July this year, there were six such sales - four in Cantonment Road and two in Boon Tiong Road. Interestingly, not all were high-floor units. One unit on the 16th-18th storeys, with 95 years of remaining lease, in Boon Tiong Road sold for $1.008 million in January this year.

While the number of four-room million-dollar flats sold as a proportion of the total is inching up, these still account for less than 20 per cent of the total of 33 sold in the first seven months of this year.

Of the 33, 21 units or 64 per cent were five-room flats, while six others were executive flats.

Analysts said it is uncommon for four-room resale flats to transact at over $1 million and those that do tend to have very unique attributes.

Pinnacle  @  Duxton is the world's tallest public housing development and has the longest sky gardens; while the Boon Tiong Road flats are near the CBD, have at least 95 years of lease left, a panoramic view of the downtown area and Tiong Bahru's heritage charm.

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ERA Realty's head of research and consultancy Nicholas Mak noted that the location of the million-dollar flats could shift as more HDB flats in prime areas complete their five-year minimum occupation period and become eligible for resale.

"But their location must still be accessible to the CBD and near a MRT station. Once the proposed flats are built at the Greater Southern Waterfront, these will likely compete with those at Pinnacle  @  Duxton," he said. Around 9,000 housing units - both public and private - will be built on the site of Keppel Club as part of the future Greater Southern Waterfront on the southern coastline of Singapore.