Wednesday, October 6, 2010

Shunfu HUDC flat sells for $1.1m

Oct 6, 2010

Record deal done in July, before new rules

By Esther Teo

AN OLDER HUDC flat at Shunfu Road has been sold for $1.1 million, a record high in Bishan for this phased-out type of Housing Board (HDB) project.

At least two other similar-sized HUDC flats have sold for slightly higher prices, but they featured condominium-like facilities not on offer at the Shunfu Road flat.

The 1,668 sq ft apartment on a high floor of Block 315 sold at $659 per sq ft (psf). It won HDB resale approval last month but was sold in July, before government cooling measures took effect.
ERA senior marketing director Sandy Lim, the agent who brokered the deal, said the home was valued at about $900,000, which means an impressive $200,000 cash-over-valuation (COV).
She said the buyers, Singaporeans, liked the flat's location and spaciousness, even though it was close to its 'original condition'. The buyers also agreed to pay the $30,000 in privatisation costs.
The estate, at blocks 314 to 319, is set to be privatised by the end of the year.

HUDC flats were built in the 1970s and 1980s as an option for middle-income citizen families. HDB phased out building them in 1987 as demand fell. There are 18 HUDC estates comprising 7,731 residential and 23 shop units. All but Braddell View have been privatised or identified for privatisation.

The latest price has raised eyebrows as it is unlike Braddell View, which has a clubhouse and swimming pool despite not being privatised yet.

Two 1,701 sq ft Braddell View HUDC flats at Block 10H sold for $1.2 million each in June and August this year.

A check on HDB's website showed that the Shunfu HUDC estate has seen a premium in prices over neighbouring HDB flats, even though the latter might be closer to Marymount MRT station. For example, a slightly larger 1,701 sq ft HDB maisonette at nearby Block 301 sold for only $760,000.

Experts are surprised at the $1.1 million price, but say the city-fringe location, its imminent privatisation and collective sale potential could be key to the result.

Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said $1.1 million was a high price to pay for an older flat that had only about 75 years left on its lease.
'The buyer is probably paying for the en bloc potential of the estate and also the generous space of HUDC flats that you can't find anywhere else these days,' he said.

Mr Eugene Lim, ERA Asia Pacific associate director, agreed the rarity of such large format units was a key reason for the bumper price. He added that the value of an HUDC estate would probably rise by at least 8 per cent to 10 per cent once privatised.

'The increase will probably come after the estate is gated up or, if possible, when a swimming pool, gym or clubhouse is built...This work to enhance the property will definitely make the estate more appealing,' he said.

ERA's Ms Lim said she is currently marketing another 1,646 sq ft HUDC unit in the Shunfu estate for $1.28 million. This unit, however, is fully renovated with designer furnishing, she said.
A resident at Block 315, who asked to be known only as Mr Lim, said he was unlikely to sell his 1,770 sq ft flat as it was in 'a very nice neighbourhood'. 'We have seen fliers in the past on sales transacting at over $1 million, but we didn't know whether to believe it...I might sell if an en bloc offer with the right price comes along, but probably not individually.'

Privatisation means HUDC residents become owners of their units as well as the common property, and so have better control over the running of their estate.

They will also no longer be subject to HDB's housing policies such as having to seek approval to sublet their flats.

HDB said in July that privatisation costs that owners might incur - legal and survey fees, for example - will be capped at $30,000 per flat for the Shunfu estate.

[For those of us with just one flat, we should sell our flat when we no longer want to live there, and want the live elsewhere. Selling for money is a dumb idea. Where would you live then? You would need a new place to stay. You would have to hunt for a new flat. And if you sold your flat for a tidy sum, all other places of equal value will be asking for equal or more cash.And then there's the renovation. Whoever bought this flat for $1.1m should feel that the flat is worth $1.1m to him today, tomorrow and the next few years. If not, he's just paid more than he should have.]

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