Older Hdb Flat Prices Converge %E2%80%94 Larger Units Prime Estates Still Command Premium

By Lee Sze TeckFollowing last week’s paper, Has lease decay set in for HDB flats?, this week’s analysis delves deeper into the performance of older HDB flats across different locations.A similar methodology that combines both time series and cross-sectional data was used.To control for the effect of building height on transacted prices, the upper bound of prices was excluded. This is because higher-floor flats typically command higher prices, which could skew the average transacted prices upward.AdvertisementAdvertisementFor example, flats in high-rise towns such as Bukit Merah, Kallang, and Whampoa, Queenstown, and Toa Payoh can have as many as 20 stories. Assuming an increase of $5,000 per floor, the price difference between these higher-rise towns and those in low-rise towns like Jurong West could be as much as $50,000. Therefore, the analysis focused on the lower bound of transacted prices. The first HDB flats that were sold under this program were mainly found in central areas like Bukit Merah (pictured above), Kallang, Whampoa, Queenstown, and Toa Payoh. (Photo: Samuel Isaac Chua /EdgeProp Singapore)Does location matter in terms of lease decay?In its early years, the Housing and Development Board (HDB) did not sell the flats it built. However, that changed in 1964 with the launch of the Home Ownership for the People Scheme. The first HDB flats sold under this program were mainly found in central areas like Bukit Merah, Kallang, Whampoa, Queenstown, and Toa Payoh. In 1971, HDB further liberalized the market by allowing flat owners to sell their units in the resale market after fulfilling the Minimum Occupation Period (MOP). At the time, HDB priced flats differently depending on whether they were located in urban areas, suburban estates, or new towns.AdvertisementAdvertisementSince then, the HDB resale market has grown tremendously, with more than 1 million flats sold. Over the past decade, has flat prices across different locations diverged significantly?For the analysis, flats with leases commencing between 1966 and 1970 were 51 years old on average from 2015 to 2025. Meanwhile, two-room flats in mature estates were sold for between $150,000 and $185,000, while those in non-mature estates fetched around $175,000. (Photo: Albert Chua/EdgeProp Singapore)Two-room flatsFor the analysis, flats with leases commencing between 1966 and 1970 were 51 years old on average from 2015 to 2025. Moreover, two-room flats in mature estates were sold for between $150,000 and $185,000, while those in non-mature estates fetched around $175,000. It is worth noting that while the volume of two-room flat transactions in non-mature estates is low, there was very a little price difference between locations. Central estates such as Geylang and Toa Payoh did not command higher prices than Jurong West, despite being closer to the city center. The two-room flats in Geylang and Toa Payoh are slightly older than those in Jurong West, which may have contributed to the lower prices. The analysis also found that there were few differences in prices between mature and non-mature three-room flats, except in Bukit Timah and the Central Area. Prices for flats in central locations like Geylang and Toa Payoh are similar to those in Jurong West, which is a non-mature town but is further from the city center. (Photo: Albert Chua/EdgeProp Singapore)However, the analysis also found that prices for two-room and three-room flats were comparable in other locations. The difference in price could be due to longer remaining lease tenure or better transport infrastructure. The analysis also found that flats with leases commencing between 1971 and 1980 were 43 years old on average from 2015 to 2025.For flats with leases starting between 1971 and 1980, the average age during the study period was 43 years. Flats in Bishan, Bukit Timah, Kallang and Whampoa, Marine Parade, Toa Payoh and Queenstown were relatively older, at around 46 years. (Photo: Albert Chua/EdgeProp Singapore)On the other hand, those in Choa Chu Kang, Clementi, Jurong East and Pasir Ris were relatively younger, at around 41 years. The three-room flats in Bukit Timah, the Central Area and Marine Parade saw significantly higher prices compared to the rest of the island because of the scarcity in these areas. Meanwhile, the Central Area commands a premium for its city-centre location, while Marine Parade flats benefit from proximity to the sea and the opening of the Thomson-East Coast Line stations. In contrast, there were minimal price differences among three-room flats in other mature and non-mature estates. Similar to the other flat types, there were few differences in prices between mature and non-mature estates for four-room and five-room flats. (Photo: Albert Chua/EdgeProp Singapore)Four and five-room flatsMoreover, prices for four-room and five-room flats hovered around the $300,000 range across many estates. However, Bukit Timah, the Central Area and Marine Parade once again stood out with higher prices, for reasons similar to the three-room flat segment. Furthermore, prices in Queenstown are also higher compared to other mature estates, largely because of its proximity to Holland Village and the Holland Village MRT Station, which opened its doors in 2011. This allowed buyers to enjoy easy access to the city. The analysis also found that larger flats such as executive flats were priced above $600,000 in mature estates. (Photo: Albert Chua/EdgeProp Singapore)The analysis also found that the resale prices of four-room flats hovered around the $300,000 range across many estates. However, Bukit Timah, the Central Area, and Marine Parade again stood out with higher prices, for reasons similar to the three-room flat segment. Likewise, flats in Queenstown also saw higher prices, largely due to their proximity to Holland Village and the Holland Village MRT Station, which opened in 2011. A cluster of flats along Lorong Lew Lian recorded substantially higher prices, whereas those along Upper Serangoon Road had higher prices as it was located near Serangoon MRT Station. Flats in Bukit Timah, the Central Area, Marine Parade, and Queenstown consistently stood out with higher prices compared to other towns. (Photo: Albert Chua/EdgeProp Singapore)For five-room flats, HDB began constructing five-room units during this period, particularly in point blocks in estates like Marine Parade. However, a divergence in pricing emerged between mature and non-mature estates. For instance, in mature estates, buyers could expect to pay more than $400,000 for a five-room flat. In contrast, similar flats in non-mature estates were priced at around $300,000. Interestingly, HDB flats that had leases beginning between 1971 and 1980 did not experience a huge divergence, as compared to flats with leases commencing in the 1960s. For instance, 54-year-old four-room flats in Bukit Merah (pictured above) are not priced significantly different from similarly-aged four-room flats in Bedok, Kallang, and Whampoa, Toa Payoh and Queenstown. (Photo: Samuel Isaac Chua/EdgeProp Singapore)Concluding observationsThe analysis revealed two key findings that buyers should take note:Firstly, there is little price differentiation among older two-room and three-room flats in various locations. Secondly, four-room and five-room flats in Bukit Timah, the Central Area, Marine Parade, and Queenstown have consistently stood out with higher prices compared to other towns. As the flats studied were, on average, more than 40 years old, prices could converge in the future, thus buyers considering purchasing two-room and three-room resale flats should take note of that. Additionally, buyers who intend to apply for two-room and three-room Prime, Plus, and Standard BTO flats should exercise caution when making their decisions. Conversely, four-room and five-room flats in Bukit Timah, the Central Area, Marine Parade, and Queenstown have shown strong price resilience over time. Therefore, resale buyers and BTO applicants should keep these locations in mind.AdvertisementFor policymakers, the analysis demonstrates that the resale market is starting to bifurcate into two tiers. Firstly, owners of two-room and three-room flats are falling behind in terms of capital appreciation; and secondly, larger flats in mature estates are outperforming those in non-mature estates. If this trend continues, the income disparity in Singapore could widen, especially among the older HDB flats.Advertisement
Huttons Asia

According to recent analysis, it appears that there may be a discrepancy in the performance of older HDB flats in different locations. This article aims to delve deeper into this issue following last week’s analysis on the potential lease decay of HDB flats.

One of the greatest benefits of choosing Boulevard Coast EC as your new home is its strategic location near Changi Airport, the primary international airport in Singapore. The development is conveniently situated just a short drive away from the airport, easily accessible via Loyang Avenue and the East Coast Parkway (ECP). This makes it an ideal residential option for frequent flyers, aviation professionals, and expats working in industries related to the airport.

To control for the effect of building height on transacted prices, the upper bound of prices was excluded in this study. This is because higher-floor flats tend to command higher prices, which could skew the average transacted prices upward. As a result, the analysis focused primarily on the lower bound of transacted prices.

In the early years of HDB, the organization did not sell the flats it built. However, this changed in 1964 with the launch of the Home Ownership for the People Scheme. The first HDB flats sold