Five-room DBSS flat in Toa Payoh sells for record $1.56 mil; 470 million-dollar HDB sales in 2023

January 31, 2024

Less than a month into the new year, a new record price for a resale HDB flat has been set. A five-room design, build and sell scheme (DBSS) flat at 139A Lorong 1A Toa Payoh was sold for a record-breaking $1,568,888, based on caveats lodged as at Jan 26. It spans 1,259 sq ft, which translates to $1,246 psf on the floor area.

This beats the previous record of $1.5 million ($792 psf), which was set in June last year when a 1,894 sq ft, adjoining jumbo flat at 50 Moh Guan Terrace was transacted. The Toa Payoh flat is located at The Peak @ Toa Payoh in District 12. According to ERA Singapore agent Kingsley Zheng who closed the sale, the flat’s high storey was a strong pull factor for the buyer.

Speaking to EdgeProp Singapore, Zheng says that the buyers are locals in their mid-40s, who were looking to upgrade into a bigger property now that their two teenage children have grown up. “The couple were attracted by the high-floor unit which offers unblocked views. You can see the city skyline from their unit,” Zheng notes.

The unit’s proximity to amenities, schools and major transport nodes also convinced the buyers. The estate is a short walk to Caldecott, Braddell and Toa Payoh MRT Stations. It is also close to the Pan Island Expressway.

The deal-clincher for the buyers was the unit’s well-renovated interiors. Although the buyers do not want to share photos of their new home, Zheng describes the unit’s design as “homely” and “pleasant”, and adds that the unit is well-renovated and well-maintained. He says the buyers do not intend to extensively renovate the unit.

The sellers had renovated the unit for more than $100,000 when they purchased the flat in 2018, says Zheng. He adds: “The flat was on the market for about a month and received many inquiries before it was sold.”

Eight million-dollar flats sold in Toa Payoh this year

Based on caveats lodged as at Jan 26, Toa Payoh has seen eight HDB resale deals exceed the million-dollar threshold so far this year. These involve DBSS and maisonette flats of 1,001 sq ft to 1,690 sq ft. Generally, these units have long remaining leases of 87 to 95 years.

One unit is at 138B Lorong 1A Toa Payoh, just two blocks away from the record million-dollar flat. It is also a DBSS flat within The Peak @ Toa Payoh. The 1,216 sq ft flat was sold for $1.25 million ($1,028 psf) on Jan 22.

HDB flats that cross the million-dollar mark are typically found in mature estates, says Eugene Lim, key executive officer of ERA Realty. He notes that in 2023, most milliondollar flat transactions were within mature estates such as Bukit Merah (62 units), Toa Payoh (57 units) and Kallang/Whampoa (54 units).

These three towns saw the greatest number of million-dollar HDB transactions, according to Lee Sze Teck, senior director of data analytics at Huttons Asia. He expects more than 500 million-dollar flats in 2024. As of Jan 26, there have been 56 million-dollar units lodged this year. “With the reclassification of flats from October this year, many owners are holding firm to their asking prices as their flats do not come with resale restrictions,” he says.

According to the latest statistics published by HDB last month, there were 134 million-dollar resale HDB transactions in 4Q2023, a quarterly increase of 4.7% from the 128 million-dollar HDB resales lodged in 3Q2023. The whole of 2023 saw a total of 470 of such high-value deals in the HDB resale market, representing a marked increase of 27.4% y-o-y.

The market can expect to see this trend of million-dollar HDB resales continue in 2024, says Thomas Tan, CEO of Singapore Realtors Inc. He adds that the new record price for a resale HDB flat might spur some buyers and sellers to pursue more high-value transactions this year.

“Given the estimated higher number of flats in Sengkang and Sembawang reaching their Minimum Occupation Period this year, and the growing number of transactions exceeding $900,000 in those estates, it is likely we may see our first million-dollar transaction there this year,” says Tan.

HDB sellers lose ground as price resistance sets in

While the group of buyers willing to fork out million-dollar sums to secure their choice flats has gradually increased over the past few years, overall, price growth in the HDB market largely moderated in 2023. The market saw resale flat prices increase by 4.9% in 2023, compared to the breakneck growth of 10.4% recorded in 2022.

“Buyers are increasingly resisting paying higher prices and cash-over-valuation (COV) for a resale flat unless it possesses superior attributes, such as an excellent central location, unblocked views, high floor or a loft design,” says Lee.

COV occurs when a buyer agrees to a purchase price that is higher than HDB’s valuation of the unit. Housing statistics from the Ministry of National Development indicate that only 15% of flat buyers last quarter opted to pay COV on their property purchase, which is a 30% y-o-y decline.

The increased supply of Build-To-Order (BTO) flats launched over the past three years and the strong pipeline of resale flats available in the market this year give buyers more options, says Lee. He adds that the government has also focused on providing more BTO projects with relatively shorter waiting times of less than three years.

Yet, demand for resale flats is expected to remain steady this year, says Tan. This could be attributed to the reduced frequency of BTO sales exercises this year, from four to three annually; and the lower supply of BTO flats offered this year — at about 19,600 units. This is 14% less than the 22,780 BTO flats launched in 2023.

The limited supply of BTO flats could lead to increased competition and potentially higher application rates for each exercise, Tan adds. Huttons Asia’s Lee also notes that the longer waiting time for each BTO sales exercise and lower supply may see more buyers turning to the resale market.

“Couples and families that need to meet their immediate housing needs will continue to be the demand-generators for the HDB resale market this year. Hence, we are expecting an estimated 25,000 to 26,000 HDB resale flats to be transacted in 2024,” says Tan.

The HDB market is unlikely to see the type of double-digit price growth it showed in 2022, says Lim. “The elevated interest rate situation and higher cost of replacement homes may have delayed some HDB owners’ upgrading plans.”

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