By Timothy Tay/ EdgeProp Singapore|March 13, 2020 7:30 AM SGT
SINGAPORE (EDGEPROP) – More than 24,000 HDB flats will have reached the end of their Minimum Occupation Period (MOP) this year, and a few of these flats in prime locations have already changed hands for more than a million dollars on the resale market.Some of these highly desirable units can be found in the eight blocks at Skyville @ Dawson and Skyterrace @ Dawson. Elsewhere, familiar developments with earlier MOPs like City View @ Boon Keng continue to record new million-dollar resale transactions.But the rate of price growth for resale flats, especially in newer areas like Dawson, is likely to be tempered by the relatively swift increase in public housing supply over the next few years.
In the mature Queenstown estate off Margaret Drive, some flats at Skyterrace @ Dawson and Skyville @ Dawson reached the end of their MOP earlier this year.
The top floor view from Skyville @ Dawson towards Jervois Road and River Valley. (Picture: Albert Chua/The Edge Singapore)
Between the two developments, one unit to cross the million-dollar threshold on the resale market is expected to be a five-room unit on the 19th floor at Skyville @ Dawson. The unit will reportedly change hands for $1.01 million, pending HDB’s official completion of the sale. The sellers are a family with three young children, who need more space as their children grow up, and will be moving to a four-bedroom unit in a nearby condominium. They were represented by Janice Farm, senior marketing director at ERA Realty.“Renowned architects WOHA Architects have done an excellent job in designing the facade, and in a practical sense, each unit is beam- and column-free, which allows owners to creatively reconfigure their home to their own needs and comfort,” says Farm.
Skyville @ Dawson comprises three blocks and the development is designed by award-winning local architects WOHA Architects. The firm is behind iconic projects such as Park Royal on Pickering and the School of the Arts. (Picture: Albert Chua/The Edge Singapore)
She also describes the view from the roof garden on the 47th floor as “simply stupendous”, and some buyers she has encountered have mistaken the development as a condominium. “Although this unit is on the 19th floor, the north view facing the [neighbouring] greenery is almost guaranteed, regardless of future developments,” says Farm. She adds that demand for prime units in this estate is also driven by its proximity to Queenstown MRT Station on the East-West Line. Meanwhile, another five-room on the 35th floor of Skyterrace @ Dawson was sold for $1.038 million on Feb 20.
In addition to its excellent architecture, the flats in Dawson boast million-dollar views that look towards the Ridley Park GCB area. (Picture: Valerie Kor/EdgeProp Singapore)
Over at City View @ Boon Keng, a trio of 40-storey residential blocks in Kallang, some top-floor units continue to command million-dollar prices on the secondary market. According to HDB data, at least 14 units in the 714-unit development have crossed the million-dollar threshold since the development reached its MOP in 2018. So far this year, two units there are expected to fetch more than a million dollars each. One is a five-room unit on the 36th floor which will reportedly change hands for $1.26 million, and the purchase option is pending a revaluation of the property as part of the transaction procedure. Based on the latest publicly available data from HDB, this could be the most expensive resale HDB transaction recorded in January and February this year.
A five-room unit on the 36th floor at City View @ Boon Keng is expected to change hands for $1.26 million. (Picture: Samuel Isaac Chua/The Edge Singapore)
The sellers were represented by Brandon Tay, branch division director at ERA Realty. Tay says “the sellers are looking to upgrade and invest their money in other property, and wanted to achieve a price that is reflective of the value of the area”. The unit was snapped up by a young couple who was attracted to the unit’s space and location, he adds.“The age of the property is also a factor [to consider], since most of the five-room flats around the area are older. Other units which we have sold for above $1 million have been buyers who are beneficiaries of en bloc sales, while some are moving from private properties,” says Tay. The key attributes that make this a million-dollar property include the view and its location. Tay says that all of the million-dollar HDB units he has sold in his career – 10 in all – are on high floors and have very good views.
“Being close to the city centre is also a factor as HDB flats near the city generally fetch higher prices. There’s also a lot of amenities nearby and most buyers today value proximity to the malls and working areas,” says Tay. The other million-dollar unit sold this year at City View @ Boon Keng is a five-room unit on the 35th floor which fetched $1.04 million on Feb 13. Other million-dollar transactions elsewhere in the last two months included the $1.1 million transactions of a five-room unit at Commonwealth 10, a five-year-old development on Commonwealth Drive. At the 27-year-old Toa Payoh Palm Spring, an executive unit fetched $1.025 million when it was sold on Jan 20.
At Commonwealth 10, a five-year old development on Commonwealth Drive, a five-room unit fetched $1.1 million when it was sold on Feb 4. (Picture: Valerie Kor/EdgeProp Singapore)
Nicholas Mak, head of research and consultancy at ERA Realty, says: “Million-dollar HDB flats are a result of a combination of factors. First, the properties offer a convenient lifestyle, thanks to close proximity to the CBD and availability of amenities. Another factor is that they are new and tend to have recently reached their MOP. Typically, they are also well-renovated and are in move-in condition.”Scarcity is another important contributing factor to a unit’s eventual resale price, and units in a neighbourhood with a low supply of flats on the market tend to have a higher chance of fetching more than a million dollars, says Mak. In addition, the designs of newer HDB estates are more aesthetically pleasing and could be comparable to condominiums, for example at Pinnacle @ Duxton in Tanjong Pagar, he says.
The Alexandra Canal Linear Park runs beside the flats at Dawson, and links Commonwealth Avenue to Tanglin Road. (Picture: Valerie Kor/EdgeProp Singapore)
According to Mak, the eight HDB blocks that makeup Skyville @ Dawson and Skyterrace @ Dawson fulfil all the criteria that enable some units to achieve a million-dollar price tag. “They are in a city-fringe location, surrounded by amenities and are relatively new. There also aren’t that many new blocks in that location, which means that demand will be high,” he says.
New resale supply tempers price increase
Christine Sun, head of research and consultancy at OrangeTee & Tie, says: “It seems like there were fewer HDB flats sold for $1 million and above in 4Q2019. However, this number may pick up slightly when more flats at Dawson reach their MOP this year. Some of the high-floor, unblocked units in that estate may be able to command million-dollar price tags.”Other HDB estates that could also see million-dollar sales this year include those in Bukit Merah and Toa Payoh, says Sun.cBut she expects to see some price resistance this year for flats valued above $900,000. This is because there has been an increasing supply of flats reaching their MOP in recent years, and many owners have decided to offer their properties on the resale market. In addition, the government plans to release more Build-To-Order (BTO) flats, and some executive condominium (EC) projects have been launched in recent months. The latest EC projects are Ola in Sengkang and Parc Canberra near Sembawang.
Projection of number of flats reaching MOP as at January 2020
Chart: OrangeTee Research“The increased housing supply and competition for potential buyers may have caused prices of million-dollar flats to plateau,” says Sun, adding that the private market also offers housing alternatives that come close to the million-dollar price tag. “As of last year, we have noticed more units sold between $900,000 and $1 million, while the number of units sold above $1 million has either plateaued or dipped,” she says. Based on public housing data, there were 246 flats that transacted for more than $800,000 last year, and six of those units are in non-mature estates. “It is noteworthy that of the six units in the non-mature estates which were sold above $800,000, three are new flats in Punggol,” says Sun.
She says this is because there had been concerns that the ramp-up in the supply of flats in these non-mature estates could have resulted in flat prices in these areas to stagnate. But recent transactions may indicate that flats with good attributes can still command attractive prices in non-mature estates. Assuming the units possess the right attributes, there may be more flats transacting at “near million-dollar” prices, despite being located in non-mature estates and further away from the city centre, she says.
HDB resale outlook amid Covid-19
In spite of the ongoing Covid-19 virus outbreak, Sun is optimistic about the performance of the HDB resale market this year. “Historically, past epidemics had little impact on the demand and prices of HDB resale flats. Moreover, it is still early days to adjust our original projections given that we are only in the third month of 2020,” she says. Mak says that the government will continue to ensure that HDB flats are affordable for Singaporeans. “Although the resale price index has been going up due to some policy changes in 2019, it is not the government’s intention to push up prices,” he says.
Christine Sun, head of research & consultancy at OrangeTee: “Past epidemics had little impact on the demand and prices of HDB resale flats. Moreover, it is still early days to adjust our original projections.” (Picture: The view from Skyville @ Dawson towards Alexandra Road. Albert Chua/The Edge Singapore)
Based on 4Q2019 statistics from HDB, the resale price index rose by 0.5% from 130.9 in 3Q2019 to 131.5 in the following quarter. For the full year, the HDB resale index climbed 0.1%.Recent policy changes for that allow property buyers to utilise more of their CPF monies to get bigger HDB housing loans for ageing HDB flats are unlikely to affect the prices of million-dollar flats, says Mak. “So far, units that have transacted for more than a million dollars are typically fresh out from their MOP. Therefore, the high prices are still largely due to high demand, and based on factors such as location, amenities, size, views, interior and exterior appearances, and scarcity,” he says. Rather, the enhancement of CPF Housing Grants and ongoing Home Improvement Programmes will continue to create demand for other flats in the secondary market, says Sun. She expects the resale volume to range from 23,000 to 25,000 transacted units this year, compared to the 23,714 resale transactions for the whole of 2019.— With additional reporting by VALERIE KOR
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