Where do these $1m HDB flats keep coming from?

It is quite crazy if you were to think about it. The very first HDB flat to hit this magical million dollar mark was an executive apartment at Block 149 Mei Ling Street in Queenstown. This unit was sold for $1 million in 2012.

Now in Oct 2020, even with the Covid-19 pandemic hanging over our heads, 13 HDB resale flats were sold for more than $1 million – the highest ever number of transactions in a month.

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In this article, that’s what we’re taking a look at: the million-dollar flats that have effectively minted money for their owners. We know they’re outliers – but nonetheless, it is still an interesting topic:

Again, around 13 flats were sold for $1 million+ in Oct 2020

This is the first time we’ve seen so many million-dollar HDB flats in a single month, breaking the previous record of 11 transactions (June 2018).

In total, 59 resale flats have been sold at the $1 million mark between January to October.

This is on the back of an overall surge in resale flat prices, which are now rising at their fastest pace in eight years.

It seems that it took a global pandemic to finally make the HDB resale market change course, after near-continuous decline since 2013.

These are the 13 flats for the record-breaking month:

Note that unfortunately, we have no records of the flats’ initial purchase price

As there’s limits to what you can tell from one month, we also checked out the top 10 highest resale flat transactions, from 2019 to the present.

Note that these are in addition to the October transactions above. Unfortunately, we don’t have the lease start dates for the following.

In order of most to least expensive, these are:

Transaction date	Address	Flat size (Sq. ft.)	Notable details	Price (psf)	Total price
July 2019	Blk 148 Mei Ling Street	Exec. 1,582	–	$727	$1,150,000
March 2019	Blk 173 Bishan Street 13	Exec.1,754	Maisonette	$653	$1,450,000
August 2020	Blk 43 Moh Guan Terrace	4-room1,410	Adjoined flat	$772	$1,088,000
September 2020	Blk 149 Mei Ling Street	Exec. 1,614	–	$668	$1,078,000
July 2019	Blk 148 Mei Ling Street	Exec.1,582	–	$673	$1,065,000
July 2020	Blk 148 Mei Ling Street	Exec.1,603	–	$658	$1,055,000
September 2020	Blk 245 Bishan Street 22	Exec.1,657	Maisonette	$631	$1,044,888
March 2020	Blk 148 Mei Ling Street	Exec.1,560	–	$660	$1,030,000
January 2020	Blk 99 B Toa Payoh Avenue 2	Exec.1,550	–	$661	$1,025,000
April 2019	Blk 168 Bishan Street 13	Exec.1,754	Maisonette	$575	$1,008,000

What are the traits these flats share?

• The flats are all in central locations
• Most of the flats are huge by today’s standards
• DBSS and Maisonettes continue to make their presence felt
• Million-dollar flats remain outliers

1. The flats are all in central locations

You’re probably wondering, at this point, where Mei Ling Street is and what makes it so special.

Mei Ling Street is located in Queenstown, one of Singapore’s oldest HDB towns.

The famous Block 148 (which you see repeatedly appearing in the list above) is just 550 metres from the Queenstown MRT station via Stirling Walk (about seven minutes away). It’s about a 10-minute drive to Orchard Road.

The Cantonment Road address is the famed Pinnacle @ Duxton, a unique 50-storey HDB development (contrary to popular belief, this is not a DBSS flat; it is just a special, one-off development). It’s located in Tanjong Pagar, close to the heart of the CBD.

Boon Tiong Road is in Tiong Bahru, an old but gentrified hipster district; and Toa Payoh and Bishan probably need no introduction; these are mature, central towns where demand has always been high.

Note that the central location somewhat offsets the drawbacks of age, for some of the older flats.

Given their prime location, they’re more likely to be targeted for exercises like the Selective En-bloc Redevelopment Scheme (SERS); or they may be picked by retirees downsizing from private property; such buyers can afford to pay for the convenience of a central location, and don’t particularly care about lease decay or resale profits.

2. Most of the flats are huge by today’s standards

The average size of a 5-room flat today is about 1,184 sq. ft., while 4-room flats average 969 sq. ft.

From the list above, you can see most of the flats (barring the ones at Pinnacle @ Duxton) are huge compared to the norm. As such, it’s likely that many of them were older flats, built in the 1990’s or before.

In particular, note that Maisonettes are two-storey units; some can go up to 2,300+ sq. ft.

The size makes them appealing to extended families, who sometimes pool their resources to afford a larger, top-end flat.

3. DBSS and Maisonettes continue to make their presence felt

Simple scarcity helps to elevate the prices of these units. Maisonettes, as mentioned above, are no longer produced; the last of them were built in 1995. They’re properly called Executive Maisonettes (EM), and they were the predecessors to today’s Executive Condominiums (ECs).

The Design, Build, and Sell Scheme (DBSS) was started in 2005. These flats have a higher quality of finishing, and are constructed by private developers.

ALSO READ: How to choose the perfect HDB resale flat to buy, checklist included

However, they’re not the same as ECs; they lack full-suite condo facilities like gyms, pools, and so forth. They’re also never privatised, and remain HDB flats throughout. In essence, they’re more upmarket HDB flats.

Trivelis in Clementi, The Peak @ Toa Payoh (Lorong 1 A Toa Payoh on the list above), and Natura Loft in Bishan (Bishan Street 24 on the list above) are some of the most famous examples.

To date, Pinnacle @ Duxton accounts for about 25 transactions that meet the million-dollar mark.

These types of flats cater well to right-sizing buyers, who don’t want to shift all the way from private property down to a regular flat.

They may also be chosen by some buyers who have just come into an inheritance, are beneficiaries of insurance policies, etc.

If the amount they receive is about $800,000, for instance, it may not go far in the condo market – but it’s sufficient to comfortably buy a huge DBSS flat, or a resale flat with a great view of the downtown area (Pinnacle @ Duxton).

4. Million-dollar flats remain outliers

Million-dollar flats make up a tiny 0.3 per cent of HDB flat transactions. They’re outliers, and all the traits above reflect that: these flats tend to be special developments like Maisonettes, DBSS flats, etc., or are among the handful of flats in Singapore’s central region.

However, there’s no denying that the number of these outliers is growing at a furious pace; from just two in 2014, to 72 last year.

With over a 35-fold increase in just six years, resale flats may well become a two-speed market in the next decade or two; one where central region flats are a whole segment apart from “regular” HDB flats.

What does it take to buy a million-dollar flat?

The ability to stomach sky-high Cash Over Valuation (COV).

COV refers to prices above the official valuation by HDB.

This amount is not covered by the home loan, and must be paid in cash. COV numbers are no longer recorded or publicised, but they almost definitely exist for million-dollar flats.

The first ever million-dollar flat in 2012 (on Mei Ling Street) was known to have transacted with a COV of $195,000. The second million-dollar flat (in Bishan) saw a COV of $250,000.

Do remember, you need to agree on the price and secure the Option to Purchase, before HDB will tell you the valuation; so you won’t fully know what to expect. You should be prepared with extra funds.

Million-dollar flats shouldn’t be taken as a reflection of the overall HDB market

There's no need to panic; you and your children won't be priced out of the resale market.

While the number of million-dollar flats are likely to grow, they still don’t reflect the price movements of the resale flat market; they’re peculiarities, not points of reference (unless you live on Mei Ling Street).