Shocked over $1.5 million HDB Let’s put things into perspectives

It’s no wonder the recent sale of a jumbo HDB flat in Tiong Bahru for $1.5 million made headlines—the 1,894 sqft flat is the most expensive HDB in Singapore’s property market to date. But is this price as eye-watering as it sounds? Breaking it down to price per square foot (PSF) reveals other factors which may make this price more reasonable.

The HDB at 50 Moh Guan Terrace went for $791 PSF. Compared to another transaction for a 3-room flat in the same block at $807 PSF earlier this year—which has a lease of less than 49 years—the $1.5 million price-tag doesn’t seem so shocking. In fact, three years ago, we saw a transaction at $896 PSF—without any raised eyebrows.

For Singapore’s most expensive PSF in HDB history, look no further than Pinnacle @ Duxton in Tanjong Pagar. In April 2023, a high-floor 4-room flat at 1C Cantonment Road sold for an eye-watering $1,369 PSF—a staggering 73% higher than the Tiong Bahru flat. Though at $1.4 million, the total price of the smaller 1,022 sqft flat was still less.

It’s not just the PSF that contributes to the price. The scarcity of jumbo HDB flats—especially in central areas like Tiong Bahru and Bukit Merah—plays a part too. In 2023, only 37 HDB flats exceeding 1,800 sqft have been transacted. Out of these, just one was in Tiong Bahru, making it a much sought-after property. Couple this with the area’s proximity to the central business district and future development from the URA Master Plan 2019 and you have an attractive investment.

The Havelock MRT Condo allows residents the convenience of a convenient commute, accompanied by the views and lush greenery of the adjoining Zion Road park.

But let’s keep things in perspective. Despite their rising prices, HDBs remain the most economical housing option in Singapore. New condos in Tiong Bahru such as Highline Residences, Regency Suites, and Twin Regency are transacting upwards of $2,000 PSF. The same-sized condo to the jumbo HDB flat would set you back $3.5 million! Even older developments like Central Green Condominium, Harvest Mansions, and Meraprime average at $1,500 PSF.

The Singapore government’s set of cooling measures implemented in September 2022 may be dampening the flagging effect of the million-dollar HDBs. Since October 2022, the average price of 5-room HDBs have remained flat, compared to a 2% appreciation in 3-room and 4-room HDBs. Disturbingly, the number of million-dollar HDB transactions has remained stable.

But when it comes to the Tiong Bahru HDB flat, its rarity, comparatively reasonable PSF and affordability of HDBs all come into play. Lastly, it’s important to note that while million-dollar HDBs may be cause for concern at face-value, buyers and homeowners should always keep a discerning eye on the numbers beyond headline figures.