Over the weekend, a 5-room Natura Loft DBSS flat in Bishan sold for $1.43 million, marking a new price record for HDB resale units of that size.
Despite the hefty price tag, it is not the most expensive HDB flat ever sold in Singapore. Currently, that title is held by a four-room jumbo flat at 50 Moh Guan Terrace which sold for $1.5 million in May 2023.
When we saw these transactions occur, our minds went, “!!!!!” After getting over the initial shock, questions such as, “What makes these HDB flats sell for such a high price?” and “Who and how are people affording these flats?” popped into our minds.
So, we reached out to Marcella Yong and Winnifred Lim, the two property agents from ERA Realty who represented the seller of the $1.43 million Natura Loft DBSS unit, to learn more.
Who Is Paying for Million-Dollar HDB Flats?
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?
Typically, the buyer profile is varied. The introduction of the September 2022 property cooling measures saw a 15-month wait out period for those ‘rightsizing’ from private properties to HDB flats.
While this has tempered the demand from these private property ‘downgraders’ somewhat, first-time homeowners and HDB upgraders who are moving from a smaller to larger HDB unit still fuel demand. These buyers typically stay long-term and do not see their purchase as an investment property.
Even if they do not manage to bid for a million-dollar flat successfully, these buyers may keep an open mind to potential private properties as they weigh the pros and cons between a million-dollar HDB flat vs a condo.
Would You Buy a Million-dollar HDB Flat?
At that $1.43 million price tag, these buyers are also able to afford non-landed private property (i.e. condos). However, if you take a look at PropertyGuru listings, you’ll realise the condos you can afford at this price point are much smaller than the 5-room Natura Loft DBSS transacted.
Some freehold condos have studio apartments and 1-bedroom units you can buy for $700,000 or less. There are some slightly larger 2-bedroom mass-market condo units in the Outside Central Region (OCR) that are similarly priced.
Ultimately, what a buyer would opt for would be based on their priorities and preferences. If they need the space, they would go for a larger HDB flat. If they like more privacy and amenities such as a pool and gym, they would likely pick a condo.
Why the Natura Loft DBSS Bishan Flat Sold for $1.43 Million
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Location |
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 |
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Size |
Large five-room flat offers the luxury of space, during a time where more value space due to hybrid and/or work-from-home arrangement |
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High floor |
Panoramic, unblocked city views for a DBSS flat that sits between the 35th and 40th floor |
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Maintenance of the interior |
The well-maintained interior creates a good first impression; potentially reduces buyer’s renovation costs |
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Lease remaining |
87 years and one month left on flat (long remaining lease) |
Aside from these factors, the supply and demand of housing in the area affect transaction speeds. Having a good property agent who has the right network and solid marketing strategies helps too.
Less than a month after the $1.43 million Natura Loft unit was put on the market, it was sold. At least 10 parties came to view the flat and there was some slight competition during the bidding process. Ultimately, an SME owner in his 50s offered the highest bid and secured the Natura Loft DBSS flat.
However, those who live in an HDB block with million-dollar flat transactions shouldn’t expect their properties to always move quickly.
Marcella shared that she and Winnifred managed to pull this feat off within a relatively short span of time as they have been “working on the ground for the last few years and have a strong buyer database.”
“We work with buyers who are looking at HDB flats in prime locations which have an unblocked view and a large balcony. These buyers see much value in the property and are willing to pay accordingly. As property advisors, we only highlight and try to value-add to what the respective sellers and buyers require.”
The pair have sold more than 10 DBSS units in post-pandemic Singapore, from 2021 to present. Based on their experience, it is a confluence of all factors – location, size, high floor, remaining lease, proximity to amenities, and a great view – that allowed the Natura Loft home to transact at its $1.43 million price tag.
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.
2. Large Size of the Five-room DBSS Flat
Five-room flats are not rare. There are plenty of five-room resale HDB flats in the market. However, it is true that the supply of larger HDB flats on the open market has been dwindling over the course of the pandemic as more sought out bigger homes.
Having to work from home altered our lifestyles and in turn, pushed demand for larger homes up and affected how we shop for property. A comfortable living space has become a priority. This reasoning probably made the 120 sq m (1,292 sq ft) five-room Bishan property more attractive.
Owning a five-room flat makes sense for those who want to have more children. Otherwise, buying a big flat is likely for the luxury of space.
Another bonus of the Natura Loft property is it is a point block, which provides those who reside in it better privacy.
3. High-floor Unit in a 40-storey Block
There are numerous benefits of living on a high-floor unit. These homes tend to see fewer pests and 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 rare, panoramic city view. Other Natura Loft apartments overlook Bishan-Ang Mo Kio Park.
That’s why it comes as no surprise that units on higher floors tend to command a higher price than those on lower floors.
The $1.43 million DBSS flat sits between the 35th and 40th floor and the buyers definitely forked out a price premium for the unit. The best part? The DBSS flat has a good-sized balcony you can admire the skyline from.
4. Well-maintained and Renovated Interior
The sellers of the 273B Bishan Street 24 flat are a couple in their 30s. They are the second owners of the flat and bought it seven years ago when Natura Loft DBSS flats had just fulfilled their Minimum Occupation Period. The reason why they decided to sell their home was because they wanted to upgrade to a private property.
Due to the nature of listings, the original listing for the $1.43 million Natura Loft flat has been taken down. But from saved screenshots, it is apparent that the unit was well-maintained with a white-on-wood colour scheme.
The effect of a clean, uncluttered, spacious home made a good first impression on prospective buyers. This can be a plus point as the home is in move-in ready condition, saving a buyer renovation costs and time.
5. Having 87 Years Left on the Flat’s Lease
Natura Loft TOP-ed in 2011 and fulfilled its MOP in 2016. If you do the math, you know the apartment has 87 years and one month left on its 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.
A good case in point is the 50 Moh Guan Terrace flat which sold for $1.5 million. The 1,894 sq ft Tiong Bahru flat has four bedrooms, two toilets, two living rooms, and two kitchens. Most notably, it has a relatively shorter remaining lease of 48 years and eight months.
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Will Demand for Million-dollar HDB Flats Persist?
According to HDB resale flat transaction data as of 24 July 2023, 228 HDB resale flats have been transacted for at least seven figures this year. There were 103 and 105 million-dollar HDB flat transactions in Q1 2023 and Q2 2023, respectively. If this pace keeps up, we are looking at another record-breaking year for the number of million-dollar HDB flats sold.
In comparison, there were 82 such transactions in 2020, 259 transactions in 2021, and 369 transactions in 2022.
However, it is important to note that such transactions made up 1.54% and 1.67% of overall transactions in those quarters (there were 6,669 HDB resale flat transactions in Q1 2023 and 6,286 transactions in Q2 2023).
More flats will probably hit the $1 million price mark, but it is unlikely that this trend will be the norm. If anything, the Government is closely monitoring the market and is ready to step in (again) with cooling measures if needed.
Want to buy a property at Natura Loft? Check out the available Natura Loft units for sale on the PropertyGuru website here:
- 273A Bishan Street 24
- 273B Bishan Street 24
- 275A Bishan Street 24
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