Margaret Drive 1.5M HDB SkyOasis@Dawson : Is it worth it?

HDB going for 1.5m at Margaret Drive?

A recent advert on Property Guru has an HDB listed for 1.5m. A price that has
yet to be breached in today’s market.

Why the high asking price?

While many may baulk at the asking price, there are a couple of reasons why
this price may be justifiable.

This is a unit with a lease of 97 years

Most flats have a balance lease of 94 years when on the market. This is due to
the minimum 5 years requirement of the Minimum Occupation Period (MOP) before
you can sell. Before you say – ‘Haven’t reached MOP, how can sell?’ and
make a submission to STOMP, the owner has obtained this flat due to Selective
En Bloc Redevelopment Scheme (SErs). Before June 2022, buyers of replacement
flats under SERS can sell their flats seven years from the date of selection
or five years from the date of collection. As they had already met their 7
years requirement, it is a non-issue.

Since this is the case, the next buyer picks up an additional 3 years of
yield. If you translate that to the rental over 3 years in the same area for a
similar size flat, it would be about $60K a year or a ‘savings’ of 180K over 3
years. Moreover, when the next seller wants to sell, they will still have a decent balance of 92 years.

The most expensive HDB was at $1.418m and It is a stone’s throw away

The most expensive HDB is a 122 sqm (1313 sq ft) Premium Loft apartment at Sky
Terrace @ Dawson, sold last year at 1.418m. While it is slightly bigger, it was
92 years when it was sold.

This unit is located at SkyOasis @ Dawson. With this block located only a
stone’s throw away, this could have been the reference price for this unit.
The only downside is that the Margaret Drive unit is not a loft and does not
have double volume.

The View

Source: Property Lim Brothers

The unit has an unblocked view that has expansive views all the way to
Bukit Timah Reserve and beyond. These views usually command a premium. On a high
floor of above 40 storeys, the views are spectacular. Moreover, the area in
front of the flat is designated as a 2.1 plot ratio flat, which means it is
capped at 24 storeys, thus protecting this view for years to come.

NEW BTO IN QUEENSWAY PRobably will fall under PLH Model

New BTO in Queensway will probably fall under Prime Location Public Housing (PLH) Model. This means the buyer must fulfil 10 years MOP instead of 5. It also comes with rental restrictions and additional selling clauses, such as subsidy recovery. These will also be applied to future resale buyers, making it restrictive and harder to sell. This unit is not impacted by the PLH Model and thus seems more viable as an investment.

Location

It is located 5 minutes from Queenstown MRT, 5 minutes drive to Tanglin, and 15 minutes drive to MBS. It is located in the middle of Bukit Timah,
Holland V, One-North, Greater Southern Waterfront, Orchard and CBD.
Overall, it is a desirable location as it is in the central of
Singapore.

What are the alternatives?

STIRLING RESIDENCE (99YRS)

2 + Study, 2 Bath, 764 sqft at $1,599,999, TOP 2022

If you are looking at Condonimums, Stirling Residence is an alternative.
A listing asking for 1.599m for a 2BR + Study Bath. While smaller, you still get 3 bedrooms and enjoy condo facilities.
The price may be slightly above $1.5 m, but if you want to go private, this
is a good alternative as the project TOP only be in 2022.

Interestingly, the agent is marketing this unit as a 3 BR instead of a 2
+Study. While it is technically possible to fit a bed in the study, there is no space for standard cupboards.

2 Bedroom, 2 Bath, 745 sqft at $1.3m, TOP 2014

The next one to consider is Alexis, TOP in 2014. This Freehold project
with a size of 745 sqft is listed for under 1.5m. A worthwhile deal to
consider if space is not a deal breaker.

SKYVILLE @ DAWSON AND SKY TERRACE (HDB)

Source: Jayne Lim Google Maps

There are units at Dawson (4A) going for around 1.2m. These units are 4A
type, and some have double-volume living rooms. It is around 1044 sqft, slightly smaller than the Maraget Drive. It has a
decent balance lease of 91 years.

LOOK BEYOND QUEENSWAY

The last alternative is to look outside Queensway. With good MRT
connectivity, options are available at the edge of town. You can choose HDB, 99-year condo and even Freehold Condo selling at
less than 1.5 million for similar size apartments.

The question is … would you pay 1.5 million for an HDB?

IS IT WORTH IT?

The original purpose of HDB was to provide affordable homes to Singaporeans. With the speculative elements and expectation of windfalls for BTO, this had eroded the purpose. Moreover, at this rate of increase, it will be harder for future generations to afford resale HDB. Given that BTO is limited, it will be a hard pill to swallow for the masses.

Regardless, the question is, should you buy it. There are limited alternatives if you seek an almost brand-new move-in unit at this location. Private property options could cost $500K to 1 million more for similar size units. At the end of the day, it will be boiled down to affordability and needs. Given that HDB has maintained its stance to provide affordable housing for the masses, it will be hard to see this unit going above 2 million after the next buyer has purchased for 1.5m.