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Authorities Investigating Sengkang “Jumbo” HDB Flat That’s Asking for $2 Million

2024-05-10 , 1:37 pm

Imagine ordering a pair of size L pants online only for two pairs of size S pants to be delivered to you.

Sounds kinda whack, right?

What is an L size person supposed to do with two pairs of size S pants? It’s not like the person can wear one pair of pants per leg or sew them together.

Reader: If sew together, the pants will have four leg holes leh…

Well, as whack as it sounds, something like this happened recently with a HDB “jumbo flat”.

Fake “Jumbo Flat”

Misleading Listing

The property listing of a $2 million “jumbo flat” in Sengkang caught the attention of the authorities, who said the listing is misleading.

What was so misleading?

The fact that there are no existing jumbo flats in the address stated in the listing.

The 2,400 square feet (sq ft) property listed on the online portal PropertyGuru was for a “jumbo flat” at Block 314C Anchorvale Link.

The “jumbo flat” supposedly had six bedrooms and four bathrooms.

The Ministry of National Development (MND), Housing Development Board (HDB), and Council for Estate Agencies (CEA) said the “jumbo flat” was actually two adjacent five-room flats that cannot be converted and sold as a single unit.

Very Overpriced

The authorities said the $2 million listing price for the “jumbo flat” was also well above the recent transacted prices in the precinct.

According to MND, HDB, and CEA, five-room flats in the precinct transacted for around $580,000 over the last six months.

The price of two five-room flats would be about $1.16 million, making the $2 million listing price of the “jumbo flat” more than $800,000 above the combined value of the two flats.

Truly a “rabak sia” moment. $800,000 can already buy another flat.

The “jumbo flat” listing on PropertyGuru has since been taken down after CEA pointed out the misleading advertisement to the agent’s property agency.

The authorities said CEA is investigating the matter and will take firm action if any breaches are established.

$2 Million Five-room DBSS Flat in Toa Payoh

If you thought that was the end of the story, you’re wrong, because there’s another flat that was going for $2 million as well.

A Design, Build and Sell Scheme (DBSS) flat in Toa Payoh was listed with a price of $2 million, which, according to the authorities, is nearly half a million dollars above the highest transacted price in the area.

DBSS Flats

DBSS flats are built by private developers with each development characterised by unique external features. The interior resembles a private condo unit more than a HDB flat, but these are still classified as HDB flats.

As HDB did not control the pricing of DBSS units being sold, the flats were sold at a price way higher than what most middle-class families could afford.

And affordable housing is, well, basically the point of public housing.

The scheme was poorly received because of its pricing, and those who had purchased DBSS units raised complaints over issues such as design, workmanship, and defects despite them paying a premium.

The DBSS scheme was subsequently suspended in 2012, just seven years after it was launched in 2005.

$2 million DBSS Flat Is Overpriced

The 1,258 sq ft five-room Toa Payoh DBSS flat in question was described as value for money by the agent who listed it, said authorities.

Despite this, the authorities said a large number of property experts consider this unrealistic, even with the attractive attributes of the unit.

“Currently, there is no Intent to Sell registered with HDB for this particular flat, which means that the potential seller(s) of this flat are not able to grant any Option to Purchase at this stage,” MND, HDB and CEA said.

Those who wish to sell a flat must register an Intent to Sell, which is valid for 12 months.

An Option to Purchase, which is a valid legal agreement signed between the prospective buyer and the seller, can only be granted if the seller has a valid Intent to Sell registered on My Flat Dashboard and has met the seven-day cooling-off period after registration.

Significant Upfront Cash Payment

The authorities also noted that the two flats come with significant cash over valuation.

Cash over valuation refers to the difference between the purchase price and HDB’s valuation of the HDB resale flat, which is to be paid upfront in cash.

For example, if the purchase price of a HDB resale flat is $530,000 and HDB’s valuation of that flat is $500,000, the cash over valuation incurred by the buyer is $30,000, which has to be paid upfront in cash.

Acknowledging that resale transactions are on a “willing buyer-willing seller” basis, the authorities strongly advise prospective buyers to carefully evaluate their finances and housing options carefully.

Being rational and prudent in decision-making is important, especially in the current economic and geopolitical climate, they added.

The authorities said property agencies and agents have an ethical obligation to act in the best interests of their clients and the public, including prospective buyers, while upholding the integrity and professionalism of the real estate industry.

CEA will look into the information presented by property agents when they market HDB flats to protect the interests of the public and promote information transparency.