The Straits Times reported today that at least 3 HDB flats had broken the S$1 mil mark this year, hitting some of the highest prices on record even amid declining prices in HDB resale market. Click here to read the article.
Mr Nicholas Mak rightfully pointed out that such cases are “outliers and not the norm”. Majority of the buyers of HDB flat would probably fall within the combined income ceiling of S$12,000 per month and it would probably be financially challenging for them to afford a S$1 mil HDB (unless they are cash-rich).
So, who are these group of buyers who can afford to pay more than S$1 mil for HDBs? In terms of income, these group of buyers would probably have already exceeded the HDB income ceiling of S$12,000 a month but they are still eligible to buy HDB resale flats without any grants. Their options for housing would probably lie between choosing a HDB resale flat or a private condominiums/executive condominium.
When we look at the headline price of S$1 mil for a HDB flat, our initial reaction would probably be thinking why someone would pay such a high price for public housing!
But what if we put ourselves in the perspective of these buyers? If SPK puts himself into the shoes of these buyers, he would probably think why someone would pay a high price for a small private condominium unit when they could have bought a bigger HDB flat in the same area. Yes, it is all about the perspective that you look at things.
Let’s use the S$1.03 mil 5-room HDB flat at Holland Drive as a case study. Size of the unit is approximately 1,259 sq ft (a HDB 5I unit type) and price per square foot works out to be S$818 psf. This particular unit is a relatively new unit that was completed in 2012. The unit has a very efficient and regular layout, ample lighting and natural ventilation. Another important selling point is its “million dollar view”! Breathtaking isn’t it. This unit would probably make a very good long-term home for a young family.
What if the buyer choose a private condominium in the area with a similar budget instead? The nearby D’Leedon could be a choice, but what the buyer could probably afford would be a smaller 635 sq ft, 1+Study unit with open kitchen, planter space and bay window. This unit would have cost around S$1.1 mil to S$1.2 mil in today’s market. In return, the buyer gets to enjoy an exclusive living environment with facilities.
Well, at the end of the day, it is all about identifying the factors that matter most to a person in choosing his home. Ultimately, it boils down to the kind of lifestyle that each individual wants. No one could say whether the decision is a good or bad one, other than the buyer himself.