http://www.straitstimes.com/Singapor...ry_589470.html
Oct 12, 2010
'Landed' HDB units fetch top dollar
Recent transactions see COVs reaching as high as $98,000
By Daryl Chin
Two-storey terrace houses, such as these in Stirling Road, are rare, with only 285 such units in Singapore today. -- ST PHOTO: CHEW SENG KIM
EXTREMELY rare, highly sought- after and only the cash-rich need apply.
'Landed' public flats, which come with an initial 99-year lease, are in hot demand, with some fetching cash-over-valuation (COV) of close to $100,000.
There are only 285 such units in Singapore and the scarcity of these two-storey terrace units, which are no longer built, explains why buyers are willing to pay the high COVs.
Located in Queenstown and Whampoa, these units come under Housing Board (HDB) rules. They were built in the 1960s by the Singapore Improvement Trust, the HDB's predecessor.
Those in Whampoa - along Jalan Bahagia, Jalan Ma'mor and Jalan Tenteram - were ready for occupation in 1972; the ones in Stirling Road, in Queenstown, were available in 1968.
Most are classified as three-room HDB units, that is, one living room and two bedrooms. Some Stirling Road units are four-roomers, with three bedrooms.
All started with a 99-year lease, so there are 61 years left for the Whampoa units and 57 years for Queenstown ones.
These units, which range from 840 sq ft to 3,000 sq ft, sold for about $12,000 to $21,000 back then.
Now, they are still seen as a sound investment. Current prices start at $570,000 and one was recently sold for $888,000.
Would-be buyers seem to be drawn to such units which - while pricier than typical surrounding high-rise HDB units - have 'landed home' qualities and are cheaper than private properties.
Mr Eugene Lim, associate director of ERA Asia Pacific, said: 'Buyers here are going for the 'landed' lifestyle without having to spend 'landed pricing'.
'These units are very hard to come by as there are very few built and most occupiers do not want to sell.'
Added Ms Janice Chan, director of Asia Breeze housing agency: 'Although they are old estates...you are getting a landed property in a good location with amenities such as eateries and shops, which means residents can expect to retain value - hence the premium.'
Price comparisons per-square-foot (psf) may be difficult, given market fluctuations. But this year, a three-room HDB terrace unit in Stirling Road sold at $670 psf, while a nearby three-room unit in an HDB high-rise block went for $470 psf.
In comparison, a slightly bigger private unit in nearby Queens condominium went for $1,200 psf, while a much larger semi-detached house along Merino Crescent went for $970 psf.
Ms Kayleigh Tan, who has been a property agent for 14 years, started specialising in Jalan Bahagia units last year because of the demand.
'Once you put a unit here on sale, the response is tremendous - twice that of a typical HDB flat. While most are younger couples, the eventual buyers tend to be older and more cash-rich,' said Ms Tan, 38.
The high COV these places command could be a reason. She is currently overseeing the sale of a 2,400 sq ft unit in Jalan Bahagia for $888,000.
The COV? An eye-popping $98,000 over its valuation price of $790,000.
But new measures to cool the property market may dampen demand for these units, which still fall under HDB rules.
Mr Adam Tan, corporate communications manager at PropNex, said: 'This means that although buyers could qualify for government housing loans...new rules like a minimum occupancy period of five years or giving up their private property still apply. Some might prefer to just buy private property instead.'
Another issue is that for HDB properties, the occupant is renting the space from the Government. Ms Chan of Asia Breeze said: 'For private properties, you own the title deed whereas for the HDB units, you are a lessee. If HDB decides to take back the land, you'll have very little choice.'
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