What Makes A Million Dollar HDB Flat? Do You Own One? - Mortgage Master Blog

What Makes A Million Dollar HDB Flat? Do You Own One?


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by Si Jie Lim on


An HDB resale flat worth a million dollars should be the elusive unicorn in Singapore’s property market. Many of us dream of our flats some day being sold for over a million dollars, but historically speaking, we know it should be almost impossible. But the trend we're seeing today speaks for itself - owning a million dollar HDB flat seems more and more likely.

A New Record Number Of Transacted Million Dollar HDB Flats In Singapore

Over the years, the number of million dollar HDB resale flats have been on a rising trend. 2018 was the first time over 70 million dollar HDB resale flats were sold. The numbers dipped slightly to 64 in 2019 before roaring back in 2020 with a record 82 HDB flats sold for at least a million dollars.

But that record already looks ready to be broken this year. So far, 74 million dollar HDB resale flats have already been sold in the first four months of 2021, far surpassing 2018 and gaining on 2020's numbers.

A record of 23 HDB resale flats were elevated to million dollar HDB resale flats in February alone and another 21 were minted into million dollar status in April. Move aside, Million Dollar Round Table achievers - we've got the Million Dollar HDB Kingdom now.

At this rate, 2021 will easily surpass the previous high of 82 million dollar HDB flats sold in 2020. We might even be seeing the first ever million dollar HDB in a non-mature estate this year! The current recordholder is a nine-year-old 5-room flat in Punggol, which sold at $910,000.

So, what are the traits of an HDB flat that makes it million dollar worthy? And more importantly, does yours fit the bill? Are you sitting on a million dollar HDB flat?

6 Traits That Make An HDB Flat Worth A Million Dollars

1. Location, Location, Location

Location is one of the key traits of a million dollar HDB resale flat. And it’s not hard to figure out why. An HDB in a good location will always be in high demand by homebuyers due to the extra convenience.

We're talking about being able to access shopping malls, hawker centres, and supermarkets without too much trouble. It just makes everyday living easy and convenient. For some families, that convenience extends to to living close to their preferred schools, such as the prestigious school cluster in Bukit Timah.

Another convenience that comes with having a good location is the time you can save from your everyday travels. For example, if you are staying in Tanjong Pagar (e.g. Pinnacle @ Duxton), you are literally within the city centre. The daily commute to your Central Business District (CBD) workplace is at most 30 minutes by public transport. This means that you can save 1 to 2 hours of travel time daily to and from work, and that goes a long way. You may not even feel the need to buy a car, since private car hires are going to be relatively cheaper over shorter distances.

Some of the popular locations that have been blessed with million dollar HDB flats in the past include:

  • Tanjong Pagar
  • Queenstown
  • Toa Payoh
  • Kallang
  • Bukit Timah
  • Clementi
  • Commonwealth
  • Holland Village
  • Bishan

2. Unblocked, Picturesque View

In a city state like Singapore, high rise buildings are inevitable. The consequence of an increased density in high rise buildings is that views from the home often get obscured by the neighbouring buildings. I mean, there might be some demand for the ability to look into your neighbour's flat but I don't think you'd want to sell to those types of buyers...

But seriously, some HDB flats just sell themselves, since they come with picturesque and unblocked views that would make the owners the envy of all their visitors.

For instance, City Vue @ Henderson and City View @ Boon Keng (the originality of the names!) are two prominent examples of HDB/DBSS flats with a view to die for. You get a nice city skyline view of Singapore from the higher floor units. During National Day, you get an exclusive spot to view the fireworks at Marina Bay from the comfort of your home.

4 units at City View @ Boon Keng were sold for at least a million dollars so far this year. All of but one of them were at least 19 storeys above the ground.

3. Limited Flat Supply In The Market

Just like any other market, the property market is also governed by one of the basic fundamentals in economics: Demand and supply. When there’s a low supply and high demand, naturally it will lead to higher prices. For million dollar HDBs, the limited flat supply of certain HDB flat types is driving the price increase.

One of them is the rare HDB terrace housing in areas like Stirling Road, Jalan Tenteram and Jalan Bahagia. With only 285 of them built in total, the sheer number of HDB terraces make them coveted. After all, you get to stay in a “landed” property for an HDB price.

Another scarce HDB housing type is the HDB maisonette. HDB maisonettes are the predecessors of executive condos. The HDB maisonette scheme only lasted for a short while before HDB stopped production in 1995. Today, the only HDB maisonettes that you can find are on the resale market.

A potential HDB housing type that will soon fall into this category is the new loft units that you can find in new developments like Sky Ville and Sky Terrace @ Dawson. Only a few lucky homeowners were able to get their hands on these rare loft units. Given that the HDB loft at Punggol Sapphire estate was sold for $900,000 in 2020, it is only a matter of time before an HDB loft gets sold for a million dollar.

4. Flat Size

Across the years, properties in Singapore have been getting smaller and smaller. The trend towards smaller flat sizes not only affected condos, but also HDBs.

4-Room Flat Size 5-Room Flat Size Executive Flat Size
1980s 105 sqm 123 sqm 145 sqm
1990s 100 sqm 120 sqm 140 sqm
2000s onwards 90 sqm 110 sqm N/A

Sources: Teolida, HDB

In the 1980s, 4-room and 5-room HDB flats were as big as 105 and 123 sqm respectively. In the 1990s, the size fell to 100 and 120 sqm. From 2000 onwards, the flat sizes are now 90 and 110 sqm.

There are both direct and indirect impact of flat size on HDB prices. The more obvious direct impact is that, since HDB resale prices are a factor of size, bigger flats are inevitably more expensive.

The less obvious impact is that, because of the abundance of smaller HDB flats nowadays, older HDB flats with bigger sizes are rarer and able to command a premium compared to their mordern, smaller HDB counterparts. As such, bigger HDB resale flats like Executive Apartments and the older 4-room/5-room flats are priced much higher than the rest of the market.

But that brings us to the next point.

5. Ample Remaining Lease

Having ample remaining lease is not THE defining trait of a million dollar HDB flat, but it is a fundamental trait that needs to be present. Because of the nature of public housing in Singapore, lease decay is a legitimate concern among homebuyers. Conservatively, the housing lease should last till the younger of you and your spouse reaches age 95. Not just that, the remaining lease on the property also has implications on your housing loan.

If the lease expires before you or your spouse (whoever is younger) reaches age 95, you will not be able to get the full HDB housing loan. If you want to borrow from the bank instead, there are more stringent criteria. For instance, if the loan extends beyond age 65 or exceeds 30 years of loan tenure, you will need to manage with a loan-to-valuation (LTV) limit below the existing cap of 75%.

Did you know there are more differences between an HDB loan and a bank loan?

6. Pseudo Condo Characteristics

One of the aspirations of Singaporeans is to own a property of their own one day. And it is not just any property. In fact, a condo unit is traditionally one of the most aspired property type for some Singaporeans. The opportunity to upgrade from HDB to a condo is like a dream come true. It's one of the "5Cs" that is most relevant today.

But unlike HDBs, condos are not as affordable. And even for condos with an affordable quantum, they are small. This gave rise to the emergence of some "pseudo condo" HDBs. These pseudo condos are HDB flats that were designed to give off condo vibes.

Pinnacle @ Duxton is one of the pseudo condos. The skyscraper attribute and condo-like design makes it feel like you are staying in a condo, but paying an affordable HDB price for it. Another perfect pseudo condo example is the Natura Loft DBSS at Bishan. Like Pinnacle @ Duxton, it has its own underground carpark, balcony and a nice condo-like appearance.

It is no wonder Pinnacle @ Duxton and Natura Loft DBSS holds the record for the top two HDB resale transactions in Singapore. A 5-room flat at Pinnacle @ Duxton was sold for $1.258m in November last year while another 5-room flat in Natura Loft DBSS was sold for $1.25m in April 2021.

Not Every HDB Is A Million Dollar Flat, But Here’s How You Can Make Yours Worth More

Million dollar HDB resale flats are always newsworthy and grab people’s attention. That’s why you often hear or read about them in the headlines. However, the reality is that, even as the numbers grow, million dollar HDB flats are still a rarity when you look at the big picture. In fact, only 0.3% of them are sold at a million dollars.

The hard truth is that not many homebuyers will get to strike lottery with a million dollar HDB resale flat. There is a lot of luck needed to get a good ballot number to even buy a million dollar potential HDB from any BTO exercise.

For the remaining 99.7% who aren’t sitting on the next million dollar HDB flat, don’t despair. After all, there are other proven methods to help you make your real estate asset worth more.

One of them is to reduce the cost of your property with smart refinancing. With smart refinancing, for every 0.1% less interest rate you pay on your home loan, you can save up to 2.5% of your loan amount in interest over a period of 25 years. That's not a small amount, even if you don't own a million dollar HDB flat. After all, the less interest you pay on your property loan, the more profit you'll be earning when you are ready to sell it.

At Mortgage Master, we know the latest home loan packages in the market and sometimes can even offer exclusive interest rate packages that you cannot get directly from the bank. If you're looking to purchase a new property, or refinance your existing home loan, fill up our enquiry form and our mortgage consultants will follow up with a call.

Posted in New Purchase, News on May 14, 2021