In July 2021, a five-room Natura Loft flat in Bishan sold for $1.295 million. Its selling price smashed the previous high of $1.268 million lodged in June 2021 for a 49-year-old HDB terrace in Whampoa. Barely three weeks later, another 5-room DBSS flat at The Peak @ Toa Payoh sold for an astounding $1.238 million.
Fast forward to 31 October: another five-room unit in Natura Loft sold for $1.36 million, setting a new record for "most expensive HDB flat sold ever". The 37th-floor flat was sold just three days after it was listed for sale.
When we saw these transactions occur and observed how the number of million-dollar HDB flats transactions is increasing, our minds went, “!!!!!” After getting over the initial shock, questions such as, “Why are HDB flats so expensive?”, “What makes these HDB flats sell for such a high price?”, “Who and how are people affording these flats?” popped into our minds.
For those who were wondering the same things, you came to the right place. We reached out to Elson Wang, the ERA Realty property agent who brokered the deal for July's $1.295 million Natura Loft unit to sate our curiosity.
Who Are Paying for Million Dollar HDB Flats
When you consider how HDB flats are supposed to provide affordable housing to the masses, you realise dropping a million on an HDB flat is not something the average person would or can do. So, first things first: who are the people able and willing to splash the cash on a million-dollar HDB flat?
In Elson’s experience, the buyer profile is varied. He has come across first-time homeowners, HDB upgraders (from a smaller to larger unit), and condo downgraders. These buyers typically stay long-term and do not see their purchase as an investment property.
At that $1.295 million price tag, these buyers are also able to afford non-landed private property (i.e. condos). However, Elson explains that although buyers who do not manage to purchase a million-dollar HDB flat may “keep an open mind to potential private properties”, they often continue their search for HDB units.
“Buyers can easily compare newer developments like HDBs against private properties within a few clicks. For the same price tag, a buyer can choose to get a bigger-sized HDB compared to a condo with amenities. This is, of course, depending on a buyer’s preferences,” Elson explains.
Like some condos, Natura Loft units come with a balcony.
Some freehold condos have studio apartments, 1-room, and 2-room units you can buy for $600,000 or less. There are mass-market condos in the Outside Central Region (OCR) that are similarly priced. However, it is notable that these prices are rising – Pasir Ris 8 sold 85% of its units at up to $2,000 per square foot (psf) – which might cause some to turn towards more expensive HDB flats.
The push to buy a million-dollar HDB flat then boils down to preference. Some might favour a condo because it has a rooftop infinity pool; others want unique condo facilities. When on the hunt for the ideal million-dollar HDB flat, Elson states buyers look out for:
Maintenance of the interior
Want to buy a property at Natura Loft? Check out the available Natura Loft units for sale on the PropertyGuru website here:
Why the Natura Loft DBSS Bishan Flat Sold for $1.295 Million
Five groups of potential buyers viewed the Natura Loft Design, Build and Sell Scheme (DBSS) apartment. Three short weeks after it was put on the market, it was sold. However, Elson warns that homeowners who are lucky enough to live in a million-dollar HDB flat shouldn’t expect their property to sell like hotcakes.
“While there are many decisive buyers on the market, I don’t think million-dollar HDB transactions move as quickly. This specific flat had the makings of a fast transaction – high floor, sizeable balcony with unblocked view, well-maintained interior, an 89 years lease remaining, as well as an excellent location with Catholic High School directly next to the block,” he explains.
Here’s a quick summary of why the Natura Loft five-room flat in Bishan sold for its hefty price tag.
Factors buyers look out for in a million-dollar HDB flat
Explanation of why the Natura Loft five-room flat sold at $1.295 million
Bishan is a central location, and the flat is a 10-minute walk to Bishan MRT. Residents enjoy connectivity via public transport. There are shopping malls, parks and choice schools within 2km of the flat.
Large five-room flat offers the luxury of space, during a time where more value space due to WFH arrangements
Unblocked city views on a unit that sits above e the 35th floor
Maintenance of the interior
The well-maintained interior creates a good first impression; potentially reduces buyer’s renovation costs
89 years left on flat, as compared to most HDB resale flats having shorter remaining leases
“Based on my experience in the industry, the reason why this flat was sold at such a high price is due to all the above factors being at play. There is rarely one factor that can trump the rest,” Elson adds.
Aside from these factors, the supply and demand of housing in the area affects transaction speeds. Having a good property agent who has the right network and solid marketing strategies help too.
1. Bishan is Centrally-located, Flat is Near Amenities and Choice Schools
Location is a crucial factor when determining the price of a flat. Bishan is centrally located, meaning it is easy to travel around the island from the neighbourhood.
For those who drive, the Lornie Highway and CTE give residents access to other major expressways such as the PIE and SLE. Bishan MRT station is a 10-min walk from the building. You can get to the CBD quickly, as City Hall MRT station is only eight stops away.
From Bishan MRT station, you have access to the Circle Line and North South Line. Serangoon MRT station connects you to the North East Line in two stops; Newton MRT station, an interchange station for the Downtown Line, is four stops away.
Accessibility aside, other amenities such as supermarkets and coffee shops are within a five-minute walk. Junction 8 and Bishan North Shopping Mall provide a wide variety of F&B and entertainment options. If you enjoy living near nature or like to keep fit, the Bishan-Ang Mo Kio Park and MacRitchie Reservoir Park are nearby.
For ‘kiasu’ parents who want the best for their little ones, know the flat is 2km from choice primary schools like Catholic High School, Ai Tong School, and Raffles Institution.
The Bishan-Ang Mo Kio Park is a popular spot to have picnics or walk dogs.
2. Large Size of the Five-room DBSS Flat
Applying for a five-room makes sense for those who want to have many children. Otherwise, buying a big flat is likely for the luxury of space.
Elson shares there is a demand for larger homes due to the COVID-19 pandemic. Having to work from home has altered our lifestyles. In turn, it has affected how we shop for property. This reasoning probably made the 120 sq m (1,292 sq ft) five-room Bishan property more attractive.
“I think plenty of us are beginning to see the advantages of a bigger home. As more of us are working from home now, comfortable living space is prioritised higher compared to the past. Buyers view large flats as an intention for long-term homestay.”
3. High-floor Unit in a 40-storey Block
The view from another high floor unit in the same block. Browse this 273A Bishan Street 24 listing on PropertyGuru.
Units on high floors tend to see fewer pests, receive more light and be better ventilated. Besides these perks, high-floor homes usually come with unblocked views of the surrounding areas. In the case of the Natura Loft property, it has a panoramic city view. Other Natura Loft apartments overlook Bishan-Ang Mo Kio Park.
“Higher floors always have a more premium price over low floors. We see that in private properties as well. Developers usually have a higher price tag for high floors as compared to low floors.
To Elson, it is worth paying a premium for such a view as they are a rare bonus. Plus, it doesn’t hurt that the DBSS flat has a good-sized balcony you can admire the skyline from.
4. Well-maintained and Renovated Interior
The interior of the Natura Loft flat was well-maintained, which made a good first impression on prospective buyers. According to Elson, the sellers had spent “almost $100,000 on renovation works with frequent touch-ups over the years”.
When buying a home, ask when renovation works were carried out last and for what reasons. This is because you want to ensure the seller is not trying to conceal damage and you’re buying a home free of defects.
Additionally, having a well-maintained interior saves a buyer's renovation costs and time.
“Due to the pandemic, we've seen delays in the renovation period due to social distancing measures. The renovation cost has also increased, and therefore a well-maintained interior may be more crucial compared to pre-pandemic times,” Elson comments.
Related article: 11 Renovated HDB Flats in Singapore That Look like Condos Inside
5. Having 89 Years Left on the Flat’s Lease
Natura Loft TOP-ed in 2011 and fulfilled its Minimum Occupation Period in 2016. If you do the math, you know the apartment has 89 years left on its lease.
On the resale market, Elson has observed many flats with a shorter remaining lease. Typically, newer flats command a higher price. But there are other factors such as location and surrounding amenities in play, which explains why HDB flats typically reach peak market value when they are between 33 to 39 years old.
Will Demand for Million-dollar HDB Flats Persist?
The Pinnacle @ Duxton is one such HDB estate that regularly sees million-dollar listings. Browse all Pinnacle @ Duxton listings for sale on PropertyGuru.
When you compare the Natura Loft flat and the 138A Lorong 1A Toa Payoh DBSS flat located in The Peak, you do see the similarities.
Factors buyers look out for in a million-dollar HDB flat
What features the 138A Lorong 1A Toa Payoh flat has
Toa Payoh is a central location, and the flat is an 8-minute walk to Toa Payoh MRT. Wet markets, supermarkets, cafes, restaurants, shopping malls, parks and choice schools are accessible and within 2km of the property
Large five-room DBSS flat at 1,227 sq ft with balcony
Located between 40th and 42nd storey. Has unblocked views overlooking greenery and/or city
Maintenance of the interior
No pictures are available; however likely to be well-maintained due to the relative newness of the property.
90 years left on the flat; TOP-ed in 2012, MOP-ed in 2016
Interested in owning property at The Peak? Scroll through the available The Peak listings for each block on the PropertyGuru website here:
Million-dollar HDB flats make up no more than 0.01 to 0.03% of the overall HDB transactions. Despite the rarity of the transactions, Elson believes the appetite for million-dollar HDB flats will grow.
“Based on statistics, the household income growth in our population has increased over the years. Coupled with inflation, I feel that it will be more common to see million-dollar HDB flats, but this is also dependent on a multitude of factors such as the location, size, surrounding amenities, etc.”
As of 31 October 2021, 192 HDB resale flats have been transacted for at least $1 million this year, making it the highest number of million-dollar flats sold in a year ever. In comparison, there were only 82 such transactions in 2020.
Additionally, the introduction HDB Prime Location Housing (PLH) model will see HDB flats launched in prime areas, where housing prices are high due to the desirable location. Still, it is unlikely million-dollar HDB resale flats will become the norm.
Under the PLH model, policies such as the subsidy clawback and extended 10-year MOP will likely curb the "lottery effect" of these flats.
It's likely more flats will hit the $1 million price mark, but overall resale flat prices are unlikely to shoot up exponentially. If anything, the Government is closely monitoring the market, ready to step in with cooling measures if needed.
Want more property insights? Read our Singapore Property Market Index Q4 2021.
More FAQs about Million Dollar HDB Flats in Singapore
What Is the Most Expensive HDB?
The current record for the most expensive HDB flat is the $1.295 million Natura Loft five-room flat, transacted in July 2021.
What is HDB Premium Flat?
Premium flats refer to Executive Condominiums (ECs).
Are Resale Flats More Expensive than BTO?
Typically, yes. But a flat’s price depends on the size, location, surrounding amenities, and the number of years left on its lease.
Are $1m HDB Resale Flats Going to Be 'normal' from Now On?
This is unlikely as million-dollar HDB flats make up only 0.01 to 0.03% of the overall HDB transactions.
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This article was written by Cheryl Chiew, Digital Content Specialist for PropertyGuru. Cheryl likes bread and cats, especially when cats tuck in their limbs so they look like bread. Drop her an email that hopes to find her well at firstname.lastname@example.org.