Downtown HDB ‘lottery effect’, how true is it ?

“Prospective home buyers hoping to cash in on future public housing flats in prized downtown locations may be disappointed, as the Government mulls over ways to tighten resale conditions for such units.” (Source:-

Is it that true that getting a downtown HDB is as good striking lottery and you can make a lot of money out of it ?

Let’s take a 4 Room HDB flat from Pinnacle @Duxton in Cantonment Road and a 4 Room HDB from Sengkang Central, both launch around 2004 and compare them.

(Source :, Sengkang Atrina 1/2 is located in 270/1/2 @ Sengkang Central.)


Purely looking at the past 6 months transaction prices, it can be seen that the price differences between a 4 rooms HDB flat in both location can be as much as $540,000. Does this mean that people who bought a unit in Pinnacle @ Duxton had striked lottery and made a lot of money from their HDB flat ?

Let’s drill deeper and analyse more about the 2 location. When BTO was launched in 2004 for The Pinnacle@Duxton and Sengkang Atrina 1 & 2,  HDB took into account of the premium location of The Pinnacle @ Duxton, and price it higher than the Sengkang Atrina.

The Pinnacle @ Duxton launched price ranged from $289,200 to $380,900 of 4 room flats. (Source:-

Comparatively, the launched price of Sengkang Atrina 1/2 ranged from only $129,000 – $202,000. (Source:-


Now, let’s put that into perspective.


Surprisingly, it’s not the Pinnacle @ Duxton’s 4 Room flat that has the highest % gain. A 4 Rooms HDB Flat in Sengkang easily surpass the max gain of a downtown flat by 94% point.

Some people may argue that the Pinnacle net a max gain of $670,800, whereas the Sengkang only net a max gain of $421,000, a whooping $250k differences.

We’ll need to take a step back and look at the launched price. Pinnacle cost more than twice the initial launched price of Sengkang Flat. It’s only right that the quantum differences is higher.

Downtown Flat striking lottery ? Maybe not.

However, if you are looking at quantum, then yes, it’ll give you a larger capital gain in term of quantum.

Points to ponder :-Should you buy the most expensive HDB BTO flat you can afford in order to have a larger quantum of capital gain ?

If taken into account of BSD, Loan Interest, the % gain of a Sengkang flat may be as much as 153% point higher than that that of a Downtown HDB Flat.


Other consideration. An extra $654.10 mortgage payment is required for the Duxton Flat. Over a period of 5 years if this amount is left accumulating in the CPF OA, it’ll earn an extra $2512.10 in compound interest as well at rate of 2.5% interest.