$1m HDB flats 'best value' for money

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#1
OK OK, I know lawyers and their spouses earn a very good salary, but does it justify saying that $1 million HDB flats are a "decent deal"? Confused

The Straits Times
www.straitstimes.com
Published on Oct 09, 2012
$1m HDB flats 'best value' for money

More cash-rich buyers seek such homes as condo prices rise faster

By Rachel Chang

A GROWING group of cashed-up home buyers - armed with a budget of $1 million or more - is waiting for premium Housing Board flats.

They are usually private-property downgraders or young couples armed with budgets that would previously take them to condominium showflats only, said real estate agents.

With the growing price differential between private property and HDB flats in prime locations such as Bishan, Queenstown and Clementi, they find that a premium HDB flat which commands a seven-figure sum is actually the best value for their money.

Data from the Singapore Real Estate Exchange showed that in five HDB towns - Clementi, Bukit Merah, Bishan, Toa Payoh and Queenstown - the price per square foot (psf) of flats has increased 15.5 per cent in the past two years.

In contrast, the price psf for non-landed private properties in those areas has increased by 27.7 per cent in the same period - giving rise to a widening price gap.

Nationwide, the gap has also grown but at a slower pace. Over the past two years, the psf price of resale flats grew 16 per cent, while that of private residential units grew 23.4 per cent.

It is also difficult to find condo units above a certain size in these locations, said agents.

The executive flats which have sold for more than $900,000 this year average about 1,600 sq ft.

The $1 million Mei Ling Street executive maisonette, at 1,615 sq ft, cost $620 psf. This is about half of what units in the nearby Queens condominium go for.

Real estate agent Henry Wong, who recently sold an executive apartment in Toa Payoh Lorong 2 for $910,000, said that such buyers usually start off looking for private property, sometimes even in further-off locations.

"After comparing options, they find that an HDB flat is much more worth it. It's difficult to find a four-bedroom condo and it will not cost you less than $2 million," he said. He is now looking for such flats for two separate buyers in Toa Payoh.

Certain flats, like the executive maisonettes in Queenstown and Bishan, cause a feeding frenzy among agents every time one comes up for sale.

Agent Thomas Hee, who represented the buyers of a $980,000 Bishan Street 13 flat, said that there are about 20 to 30 buyers waiting for a similar unit to come up for sale.

Agent Irene Ho, who represented the sellers of the $1 million Mei Ling Street unit, said that she is in touch with several other residents of such flats on Mei Ling Street, although these residents are not currently planning to sell their flats. "I call them every few months, just to keep in touch and see if things have changed."

Residents report real estate agents' fliers slipped daily under their doors, phone calls every week, and even late-night house visits from agents.

"Some don't like it," said Mrs Pamela Tao, 55, who lives on Mei Ling Street. "They come quite late. You're just relaxing at home and don't want to entertain them."

But interest looks unlikely to abate as young professionals like Ms Oh Chai Yee, 26, take their house hunt to top-end HDB flats.

The lawyer and her boyfriend have a first-home budget of $1 million to $1.5 million, which they have found can get them only a two-bedroom or smaller condominium in locations like Clementi or Mountbatten.

"With our combined income, we are not eligible for Build- to-Order flats or even executive condominiums like Heron Bay," she said. "And we want a place that is at least 1,000 sq ft, in a good location."

As they have gym memberships, they do not mind forgoing the amenities of a condominium, and find the absence of management fees a bonus.

"From our point of view, these HDB flats which go for $1 million are a decent deal."

rchang@sph.com.sg
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#2
Everything is relative.

In Athens, after paying the equivalent of SGD $16 for a plate of spaghetti and $10 Macdonald set meals, my Greek colleagues find our hawker food "dirt cheap"!

But my Thai colleagues find it incredible that a plate of fried rice is so "expensive" at SGD $3!

Just imagine how our Johor neighbours must feel about Singaporeans snapping their properties... So affordable! HDB 4 room can exchange for corner landed terrace? I almost tempted...

Unfortunately, the reality is not how much things cost... But how much money we have Sad

10 years later if the same Queenstown maisonette rise to $2 million, the couple will say it's a value buy at $1 million!
Just google singapore man of leisure
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#3
all musical chairs as per Arthur.

in 99 when we sold our condo and went to live rented apartment people said we were crazy who would do such a thing? In early 2001 I remember PM Goh was talking about a slow down in the US economy that may affect us but it was a very low chance he said.

Then September 11 happened after that everything took a hit and crashed, property took long time to die real estate agents were making only 1.5k-2k a month and that was considered very good fortune already. Three years later we bought our current place the size can consider an executive/mansionette unit at rock bottom prices the previous owner just didn't want to pay for the lift upgrading program understandable as times were bad so quickly wanted to dispose and we felt it wouldn't go much lower so we got it for around valuation.

Today with this climate so many people with cheap money are chasing after assets I think wait a while maybe can sell for 1.2 million and go live rented again whahahaha Big Grin

Today in the papers PM Lee saying there's a low chance we may avoid a technical recession in Singapore sounds familiar? Deja vu yikes ... gave me a chill down my spine when I read it Tongue

musical chairs see who the lucky one when the music stops
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#4
(09-10-2012, 08:48 PM)sgd Wrote: PM Goh was talking about a slow down in the US economy that may affect us but it was a very low chance he said.

PM Lee saying there's a low chance we may avoid a technical recession in Singapore sounds familiar?
They are talking about different thing. PM Goh say low chance of slow down. PM Lee say low chance of AVOIDING recession. So that means there will be no technical recession.
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#5
sgd,

Congrats!

Value investing applied is much better than expoused.
Just google singapore man of leisure
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