HDB flat sold at S$1.7 million! (RM5.91 million)

HDB flat sold at S$1.7 million! (RM5.91 million)

HDB builds homes for Singaporeans

The Singaporean government builds majority of all the new homes in Singapore every year. This is done via the Housing Development Board (HDB). In fact most Singaporeans would stay in a HDB unit because it’s the most affordable property they could afford. Beyond that, there are private condos but those are very expensive and majority could not afford these units and definitely would prefer to buy a HDB unit instead.

Around 16 percent of Singaporean households stay in private apartment and condos. Source: straitstimes.sg However, what if there is now a transaction for a HDB unit at S$1.7 million? Private condos are usually more expensive than a HDB unit and HDB units have been transacted at S$1 million before but this S$1.7 million is a totally new height.

Article in todayonline.com

• Real estate company ERA announced in a press release on Monday (July 22) that it sold a premium five-room flat at Margaret Drive at a record-breaking S$1.7 million
• This sale surpasses the previous highest HDB transaction of S$1,588,000 recorded just last month of a five-room flat at City Vue@Henderson
• Property analysts cautioned that the publication of such record-breaking one-off sales could lead to unrealistic expectations among homeowners and buyers who might believe such prices are reflective of the overall market
• Experts also said that further government intervention is needed to prevent such outlier sales from becoming a trend

To read the full article, it’s here: Article in todayonline.com

Record may be due to many personal reasons too

When the price is way higher than all other transactions, then it’s clear that there are some other reasons for the price to be much higher. Perhaps this particular unit is really out of the ordinary and there’s very limited units in the market. Thus, as soon as one unit is available, people would do whatever they could to snap it up.

Perhaps the buyer did not know what should be the market price and he / she could afford it, so it does not matter to him / her. This happens all the time even for cars. Some cars which are ‘limited edition’ are sold for super high price just because the buyer wants to feel exclusive.

Perhaps this particular unit is right above or below or beside his / her parents unit? Of course he / she could not let go of this opportunity of staying close by not within the same unit. Sentimental value is very hard to resist too. Maybe the buyer used to stay there and would like to keep his / her memory of the past, alive.

Perhaps the real estate agent was very persuasive and could sell the value of such a unit that the buyer felt that the price paid for is still below the value of that unit and thus it’s best that he / she buys the unit before someone else did.

Regardless of the perhaps, this is probably a special case unless we start seeing a few more units at this price of S$1.7 million… If it happens a few more times, then it will start to become the norm. It’s how valuations work too. They cannot just rely on one transaction to say the value has changed yet. It’s always a series of transactions and then the valuation for the unit may change accordingly.

I wish the buyer lots of happiness in staying in a S$1.7 million unit.

Thank you for reading! Please do share if you believe others could benefit too. Thank you.

 Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER). 

Alternatively, Follow me on Telegram here.

Please LIKE kopiandproperty.com FB page to get daily updates about the property market beyond kopiandproperty.com articles.

Else, follow me on Twitter here.