[ENG SUB] 百万元组屋容易卖？Why it's not easy to sell Million-dollar HDB flats

For this house that was just sold, I would say it's very special

because it's what I would call a dual-key maisonette.

It's honestly my first time seeing this in Singapore.

The increasing number of million-dollar HDB flats

inevitably makes people worry whether HDB flats are still affordable.

We are the victims of the already spoiled post-COVID market,

considering that prices were hundreds of thousands of dollars cheaper in the past.

Now even 3-room HDB flats are being asked for millions,

are they asking for an exorbitant price?

I told the homeowner,

if you let me sell, I'll try to sell a million for you.

The homeowner's excited after hearing it and

he sold it after signing a three-month contract.

News of resale HDB flats changing hands for more than a million dollars

made the headline pages of newspapers.

Is it really easy to sell HDB flats for millions of dollars nowadays?

Are they really so attractive that people are willing to spend a lot of money on them?

With this question in mind,

I approached a real estate agent who once sold a million-dollar HDB flat

for an answer.

Hi Natasha, we are here at your seller’s estate,

where they managed to sell their million-dollar resale.

But can you briefly introduce to us

what are some of the million-dollar features of this estate?

How come your sellers are able to fetch such a high price for their unit?

Firstly, welcome to Bishan.

I would say Bishan is a very highly sought after estate in Singapore.

It has excellent connectivity and top notch amenities.

So it's very popular amongst families especially,

because there are three very highly sought after schools in the area.

On top of that there's also Bishan-Ang Mo Kio Park,

so it's perfect for nature lovers.

And for units over here on like middle to higher floors,

they have a beautiful greenery view of Bishan-Ang Mo Kio Park.

Perhaps most million-dollar flats need to have like an X Factor.

For this house that was just sold, I would say it's very special

because it's what I would call a dual-key mansionette.

So you know mansionette, they are usually two stories.

By dual key, I mean that

there's a main door entrance on both the lower floor and the upper floor.

So it's very very special.

It's honestly my first time seeing this in Singapore.

Bishan has always been one of the areas with the highest number of million-dollar HDB flat transactions.

But this doesn't mean that

all the HDB flats there cost a million dollars.

Why?

I followed Natasha to another part of Bishan

to hear her explanations.

Natasha, we are here at another corner of Bishan, Sin Ming road.

But why is it more difficult

for units within this estate to fetch a similar price?

Especially when most of the units here

are also 4 rooms, like where we were at previously.

Just by observation you can kind of tell that this area doesn't quite have the same level of development and accessibility

as compared to the previous estate that we were in.

A second point that I can think of is that the buildings over here are slightly older,

so the block we’re at now is

around almost 20 years older than the previous block that we were at.

So the number of leases left is lesser as well.

And thirdly I guess in terms of reputation, Sin Ming is very well known to be an industrial area,

so it's very popular for Sin Ming Industrial Park.

Right now a lot of people associated it as an industrial area,

so it might not be the top choice for families.

But at the same time,

we can see that there are some BTOs coming up,

so perhaps with the place becoming more vibrant,

it could lead to higher transactions in the future.

The first million-dollar resale HDB flats

appeared in Queenstown in 2012.

The number has been increasing year by year, especially in the last three years,

and has also begun to spread to other towns.

It must be emphasised, however, that even now

million-dollar HDB flats still only account for a small percentage of total transactions.

In 2023, there were 26,735 HDB flats for resale

with 470 being million-dollar HDB flats,

accounting for about 1.8 per cent of the total.

In terms of housing type, the majority of million-dollar HDB flats are 5-room flats,

accounting for about 43%,

executive flats for about 30%, and 4-room flats for 26%.

3Gen HDB flats and HDB Landed Terrace Houses accounted for less than 1% each.

There are various forces in the market

that actually contribute to the growth of the number of million-dollar flats.

One of them is just inflation.

Secondly, is basically our population is growing also.

So a growing population means

there are more households and greater demand for real estate.

The third one is actually growing household income.

And with a larger household income,

the typical household is able to afford slightly more expensive property as well.

Another factor is actually also the growing prices of private properties.

Now, typically in a certain town, let's say, take Bishan for example,

if a household wants to buy a resale 99-year mass market condominium

and they will typically have to pay, right now the median price is roughly about $2 Million.

And as a result, some of the buyers turned to the resale market.

It's not a given that HDB flats can bid for millions of dollars,

t must be due to the good conditions.

What kind of calculations do homeowners have in mind

when they are able to sell their HDB flats for millions of dollars for cash?

After a few tries,

Natasha and I managed to convince

a former homeowner who sold a million-dollar HDB flat

to come forward anonymously.

Because this has become an empty nest to us.

We stayed there for 33 years.

So basically after deducting 33 from 99,

we are left with 66 years of lease.

Our kids used to stay with us

and since most of them are already married,

and we are left with only two old folks,

and we feel that we don't need such a big place.

Especially our current, or rather the previous house

is a maisonette,

which we need to walk up and down,

and as age catches up, we find there are some difficulties. 随着年龄渐长 我们觉得这是有挑战的

So that is one of the main reasons why we are looking to sell it,

move to a smaller, more convenient, single level house.

We think that 1.5million should be a reasonable rate

because if the neighbouring units are selling 1.6million,

so I think 1.5 is a reasonable amount.

Neither too high or low.

When it comes to pricing of the unit, who gets to have the final call?

I would say the final decision always lies if they're seller.

However as the agent it's my responsibility to so equip them with things like

market insights, comparable sales,

and like past data to help guide them on their decision.

Sometimes we would advise the clients to relook at the price that is listed at it.

It could be slightly too high

and lowering the price could lead to a faster sale.

In Singapore, this process also regulated by CEA,

the Council for Estate Agencies,

who would monitor the market

to make sure that there are no listings that are priced unreasonably.

So if there's a listing that is priced extremely high that is very unreasonable,

CEA will actually inform us agents to perhaps adjust the price.

This is to ensure that there's fairness in the market.

Compared to most flats in the resale market,

a million-dollar HDB flat is still much more expensive.

How committed does a buyer really need to be to pay a high price?

I found a couple in their 30s

who recently bought a million-dollar HDB flat,

to ask them to share their insights anonymously.

The flat that we bought is in the Boon Keng area.

It is a 4-room HDB flat, 1,000 square feet,

with 92 years left on the lease.

The price tag was daunting

but it was justified

given the unique characteristics of that unit

and our positive reactions.

The reason we made this purchase was because

the house genuinely fulfilled many of the criteria that we wanted

in terms of location, amenities,

and characteristics of the house,

for example, the windows and sunlight.

Those made us really happy to find

something that fulfilled all the criteria,

which was why we made the purchase.

Moreover, we also already calculated our financial thresholds,

and this unit was within our means.

As for negotiating on the price,

we could not negotiate for a lower price

because most of the competition had already bid at the listed price.

We were honestly quite fortunate that our seller and our realtor, they were very genuine people.

They just saw that we were a genuine party

and when we outbid the other buyer, just once,

they immediately gave it to us just seeing that we are genuine.

And they didn't start a price war.

For this purchase,

we are the victims of the already spoiled post-COVID market,

considering that prices were hundreds of thousands of dollars cheaper in the past.

Resale flats that start at $1 million

are always spacious executive flats, 5-room flats,

or at least 4-room flats.

But strangely enough, I've seen some 3-room HDB flats on property websites

that are also asking for millions.

I tried to find out from the three agents in charge of sales,

but they all refused to be interviewed for various reasons.

If it's possible,

I think let's not proceed with this interview.

Because firstly, my company might not allow me to do this.

Secondly, this is my friend's house

so I think I shouldn't execute it like this.

Sorry Quan Bin.

The current highest transaction record for a 3-room HDB flat is $870,000.

A million dollars is a lot of money to ask.

For this, I turned to the founder of Homeseller,

a small property company, Xu Guoliang.

In the six years since the establishment of his sales team,

he has made many multi-million-dollar HDB deals

and has his own insights into the market.

I asked him to tell me if this is a reasonable price.

In Telok Blangah,

I bet it won't sell in five years.

It's the three-bedroom style that won't sell for a million dollars in five years.

Because the valuation hasn't reached.

There's a difference between the seller's price and the valuation.

Because if you don't match the asking price with the valuation,

there will be a COV (Cash Over Valuation) generated.

For example,

let's say Dawson Road, McNair Road, that kind of place,

those kind of penthouse type (3-room flat)

maybe up to $770,000 to $850,000 or so.

So you're going to break a million, that means

the first challenge is that I have to find a buyer

to return you the record price, $1 million.

The second challenge is that, does the buyer have

$100,000 to $200,000

to return this COV.

Based on our experience, 3-room flats don't.

Honestly, even five-room flats are rare.

So you're saying selling a 3-room flat for a million dollar,

with the current market, it should still be out of reach.

Why are there million dollar property adverts?

The first argument is that when a homeowner wants to sell a house,

they will look for a few agents.

In order to get your listing,

I have to meet the homeowner's conditions.

One of them is, who can help me sell high?

If I am the agent,

and I really want this listing,

I know the other agents will advice the homeowner

to sell for about $700,000 to $800,000 or so.

I told the homeowner,

if you let me sell, I'll try to sell a million for you.

The homeowner's excited after hearing it and

he sold it after signing a three-month contract.

This is one of it.

Secondly, there are some homeowners who just want

to try for a million.

This agent, in order to get this business,

he doesn't dare to contradict the homeowner.

Some homeowners just don't have that correct information,

so it causes them to waste their time,

logging that price, and wasting two or three months not being able to sell it.

Then they'll adjust the price, but by then it'll be too late,

maybe that market is starting to shift.

Going forward, we may actually see more 4-room flats

being transacted at such a high price.

One reason is because the government has stopped supplying

5-room flats in their BTO projects within the central region.

So going forward, we could actually see

not just a growing number of 4-room flats,

but there might even be some smaller flats that could be,

testing that $1 million benchmark,

like 3-room flats for example.

It will definitely grab headlines

and it could be a bit disruptive

because there will be a ripple effect on the rest of the market.

But the government is also pushing up a large number, a large supply,

almost on average, almost 20,000 flats a year for the last three years.

And hopefully, this can help to cool the market.

So, yes, there is basically market forces that is pushing up the prices.

But we must also keep in mind that the number of million-dollar flats is still a minority,

about 2% to 3% of the overall transactions, although they do grab headlines.

To put it in another way,

it's like, oh Singapore won a few Olympic gold medals,

but it doesn't mean that every Singaporeans are capable of winning Olympic gold medals.