This Sengkang BTO project made more profit than The Pinnacle @ Duxton

Ask Singaporeans to name a BTO project that has made enormous profits for owners on the resale market, and the answer is likely to be The Pinnacle @ Duxton. Launched in 2004, this centrally-located project made headlines in 2016 for breaking the HDB resale record with a $1.12 million transaction price for a five-room flat. Little do most people know that — in terms of percentage profit — another BTO project beats The Pinnacle hands down, and it’s nowhere near the Central Business District (CBD). The name? Aspella, located at Sengkang estate.

What? Are you serious? Sengkang?

Trust us, we’ve got the statistics to back it up. Launched in December 2003 by the Housing & Development Board (HDB), Aspella comprises eight blocks of 862 four-room flats. Because Aspella was positioned as a premium BTO project, with higher-end finishes such as timber-strip flooring in bedrooms, bay windows and vanity tops in the bathrooms, HDB priced it 15 to 20% higher than the standard BTO flats at the time. Here’s the Aspella and The Pinnacle @ Duxton launch prices side-by-side.

• Aspella 1 (275A-D), 4-room premium, launch price in Dec 2003, $169K to $199K
• Aspella 2 (277A-D), 4-room premium, launch price in Dec 2003, $170K to $200K
• The Pinnacle @ Duxton, 4-room, launch price in May 2004, $289,200 to $380,900
• The Pinnacle @ Duxton, 5-room, launch price in May 2004, $345,100 to $439,400

It’s also important to note that Aspella, listed under Sengkang estate, was priced as a non-mature estate, roughly equal to the price of a three-room resale flat at the time. At the time of launch in 2003, Buangkok MRT station, which is right at the doorstep of Aspella, hasn’t even opened for operation yet. According to the site plan below, there were commercial facilities planned, but future residents couldn’t be certain if they’ll get the amenities they need (e.g. kopitiam, supermarket, clinics) in a yet-to-be-developed area.

Nevertheless, the response for Aspella was red hot. According to a 25 March 2004 Straits Times article, there were 1,800 applications for the project’s 862 units. Applicants were quoted to be attracted by the upmarket finishings and were “confident that Buangkok MRT station would open eventually”. (It did in January 2006, well before Aspella residents collected their keys.)

To put Aspella’s appeal into perspective, HDB had 10,000-odd empty flats at the time in towns such as Jurong West, Bukit Panjang and Punggol, ready for moving in. In the end, the couples and households who applied for Aspella and managed to pick their flat thanks to a good queue number got really lucky, here’s why.

Aspella reaches for The Pinnacle

Having gotten their keys in 2007-2008, Aspella residents who wanted to sell their flats could do so after the five-year Minimum Occupation Period (MOP). By then, Aspella had already become a vibrant, self-contained community, with a Fairprice supermarket, coffee shop, childcare and kindergarten, as well as a variety of shops and clinics centered around Buangkok MRT station. The project also won the following awards for design and architecture:

• BCA Design and Engineering Safety Excellence Awards 2010: Merit
• BCA Universal Design Award Bronze
• HDB Design Award 2009: Winner

Looking at the gorgeous photos of Aspella, we must say we’re not surprised. According to architects Surbana Jurong, Aspella was designed to be “physically, visually and socially connected” with “a wealth of easily accessible and meaningful spaces for residents to enjoy”. As with The Pinnacle @ Duxton, Aspella’s sleek blocks, with their spacious landscaped areas, look more like private condos than regular HDB flats:

So, it comes as little surprise that when some residents chose to sell their flats upon MOP, the resale prices spoke for themselves.

In the above chart, we compared 4-room HDB BTO flats that were completed in the same year as Aspella or later, for fairness. Looking at the graph, we see that prices peaked for BTO flats across Singapore, Sengkang New Town and Aspella in 2013 — the year of the property boom that saw the implementation of cooling measures such as the Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR) in June.

Only one flat at Aspella was sold in 2011, at a price below the Sengkang average. In 2012, 25 homeowners chose to cash-in, and prices rose to above the Sengkang average. In January of 2013, a 11th floor unit in Aspella was sold for $645,000, setting a transaction price record for the whole of Sengkang that remains unbroken to this day. That year that saw a further 59 transactions for the eight blocks of flats, meaning that almost 10% of Aspella owners sold their flats in a span of two years.

Fast forward to the first half of 2018, Aspella even managed to buck the soft HDB resale trend with a strong uplift in average transacted price and psf price. During this period, there were a total of 12 transactions, at an average price of $541,815. The highest transaction was $580,000 for a unit located between the 13th and 15th floor — the highest since 2013. Based on this figure, here’s how the Aspella stacks up against the famous The Pinnacle @ Duxton:

Now we know that the Singapore government has repeatedly emphasised that a HDB BTO flat shouldn’t be viewed as asset or investment for profit. Even then, it’d be foolish to ignore the numbers above. If you had told us that a $185k outlay — leveraged by a home loan, no less — can net almost a 200% profit within 10 to 15 years, we’d be in disbelief. Tell us that doing so involves buying a flat in an non-mature estate and we might just ask you if you’ve forgotten your medication.

But here we are, looking at a BTO flat that stands to earn its first owners a profit higher than the legendary The Pinnacle @ Duxton. It must be said though, that hindsight is 20/20 and HDB has wised up since then, pricing BTO flats at non-mature estates somewhat higher in recent years. But if there’s any lesson to be learnt here for property buyers, it is the importance of first-mover’s advantage. You shouldn’t bet on an “non-mature” location, but you should never write it off entirely either.

[See listed Aspella HDB flats for sale on Singapore’s largest property portal, 99.co: https://go.99.co/aspella]

What’s next for Aspella?

Aspella and the properties around it will soon have even more to cheer about. The vast land parcel across the road from Aspella was put up for tender by the Urban Redevelopment Authority (URA), with the intention of transforming it into an “integrated community development” that will house a Community Club, hawker centre, bus interchange and childcare centre along with retail and dining options centered around a pedestrian mall and plaza.

As part of the integrated development, there’ll also be about 700 private residential units. Altogether, this is serious intent to develop the compact Buangkok neighbourhood (of only about 25,000 residents) into some sort of a proxy hub for Sengkang, which is already celebrating the opening of its own general hospital in 2018. This next stage of transformation, we’re sure, is already whetting their appetites of residents in the area as well as that of property watchers. Soon, the once little-known Aspella could be on the tip of everyone’s tongue.

Know BTO projects that outperformed The Pinnacle? Voice your thoughts in the comments section or on our Facebook community page.

 

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