$1m for flat? Not interested

$1m for flat? Not interested

By Desmond Ng

WHAT would you say to a whopping $850,000 profit on the sale of your flat?

Thanks but no thanks, say some owners of the Shunfu Road flats.

This quiet estate off Thomson Road recently hit the headlines when an HUDC flat in Block 315 was sold for a jaw-dropping $1.1 million in July, the highest ever transacted in Bishan for an HDB project. The cash-over-valuation (COV) of about $200,000 is believed to be the highest ever paid. The unit was valued at about $900,000.

That sky-high price prompted another owner to put his unit on sale at an even higher price of $1.28 million.The two units are 1,668 sq ft each with three bedrooms. ERA senior marketing director Sandy Lim was involved in marketing both of them.

The estate, at blocks 314 to 319, is set to be privatised by the end of the year.

Surprised

Most of the residents The New Paper spoke to were surprised that the units breached the $1 million mark. But it seems that amount is still not good enough for them to even consider selling.

Only one of the 10 residents interviewed said he would consider selling at the recently transacted price. Others, like Ms Soh G S, would rather hold on to their homes. The housewife, in her 50s, said she first heard about the $1.1 million sale a few months ago.

She said: "I thought it was just a rumour. But when I found out that it was true, I was surprised that (the unit) got such a high price."

Even during the 1997 peak, prices in the estate never went beyond $800,000, she said.

A check on HDB's website showed that transacted prices for HUDC units in Shunfu ranged from $720,000 last October to $1.1 million last month.Ms Soh added that her family bought their unit from HDB for about $250,000 in 1985. They are the first owners.If she does sell it for $1.1 million, her gross profit would be about $850,000. She said: "If I sell at that price, I would not be able to find a replacement unit of this size and in this location." She likes the area for its amenities - it's a brisk five-minute walk to Marymount MRT station, a wet market/food centre and a 15-minute drive to town.

Ms Soh reckoned that she'd have to pay about $1.7 million for a condo unit of similar size in the area.

"It'll make sense for someone here to sell and downgrade to a smaller unit," she added.

Another original owner, retiree James Sek, said he'll only consider offers of at least $1.5 million.

He explained: "This estate can potentially be sold en bloc in the future. I think I can get a better price then."

Civil servant Mark Tan said that he's now calculating if it's worth selling his unit and buying a smaller flat elsewhere. But he thinks that the Government's cooling measures introduced in August will make it trickier to hit the $1 million mark now. His parents bought their unit for about $250,000.

Said the 48-year-old: "It's indeed tempting. If we can sell in excess of $1.2 million, we'll probably do so."This will unlock some cash for my parents, who are retired."

HUDC flats were built in the 1970s and 1980s as an option for middle-income Singaporean families.

There are 18 HUDC estates here. All, except Braddell View, have been privatised or been identified for privatisation, reported The Straits Times on Wednesday.

Property agent Ms Lim said that when she submitted the paperwork for the $1.1 million unit, a suspicious HDB officer contacted her to verify the information. "The HDB officer called to ask me if I did indeed sell the unit for over $1 million. It was quite funny," she said.

Ms Lim said that response to the sale was very good, with 90 people viewing in just three weeks.

She took about three weeks to close the deal, which is the norm for a popular HDB unit.
The $1.1 million unit was owned by an elderly couple who were the second owners, she said.

They sold this unit - which was left vacant for a few years - to live with their children.

The buyers, a Singaporean couple, are downgrading from their landed property, MsLim said.

The buyers and sellers declined to be interviewed for this article.

Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said the values in Bishan have gone up partly because of the opening of the MRT's Circle Line.

He said: "But to receive over $1 million for an old project with a shorter lease boggles the mind."

Mr Tan was not surprised that residents there are reluctant to sell because of the high cost of getting a replacement home.

"This is unless they own more than one property," he added.

The New Paper - Oct 11, 2010

My Opinion:

The people who buy such units are buying because of size. This particular couple are reported to be downgrading from a landed property so I surmise they must have been attracted to the generous proportions of the rooms in HUDCs. The recent cooling measures by the government will not have much effect on this group of people - as they are typically buying for occupation rather than rental. The cooling measures will affect those who are buying a second unit for rental purposes - and those units are typically 1000sqft or less.

So can TC reach such levels? of course! Shunfu is older and not even privatised. There are pros and cons to every estate, it is no better than ours. Watch and wait. As the number of large flats dwindle, TC will become ever more attractive.