In Singapore, 80% of the residents stay in HDB flats. Some buy new launches while others buy resale flats. In any case, Singaporeans can’t be blamed for having the mindset of wanting to profit from their capital appreciation of their flats.
In recent years starting from 2013, housing prices have started a decline when the government implemented multiple rounds of cooling measures. This came about because of various rounds of cooling measures ranging from Additional Buyer Stamp Duties (ABSD), Seller Stamp Duties (SSD) and Additional Conveyance Duties (ACD).
The HDB resale market was not impacted as severely as the private residential market, but it was still not spared from the wider market slowdown.
This post seeks to shed some light on prices and trends in the 4 room HDB flat resale market. Specifically, some questions can be answered
- How have HDB 4 room resale flat prices performed for the last 10 years?
- Were there any towns (as defined by HDB) that performed better or worse than average?
- In which town are prices the highest? The lowest?
All information is taken from HDB’s resale statistics website.
We’ll start from A to Z for the towns and show all the charts graphically.
Few points can be noted from the charts
- Prices in all the towns generally flatlined from the beginning of 2013. No surprise because of the cooling measures that hit the private property market.
- Few towns had price increases. For example Bishan, Bukit Merah, Clementi, Kallang/Whampoa and Queenstown. One common feature are that these towns are generally older/more mature, and are located closer to the city centre. This suggests that the old adage: location, location, location holds true.
- More towns saw flat or declines in prices. For example Bukit Panjang, Choa Chu Kang, Jurong West, Pasir Ris, Sembawang, Sengkang and Woodlands had prices which decreased quite a fair bit. Reflecting point 2 previously, locations of these towns are generally further from the city centre.
- The best three performing townsbetween 2Q2007 (earliest date of data) and 2Q2017 are
- Clementi (prices rose from S$302,000 to S$610,000 or a 7.1% annual increase)
- Kallang/Whampoa (prices rose from S$295,000 to S$568,000 or a 6.6% annual increase) and
- Bukit Merah (prices rose from S$371,000 to S$688,000 or a 6.2% annual increase)
- Conversely, the worst three performing estates (though not negative) between the same period are
- Sembawang (prices rose from S$240,000 to S$350,000 or a 3.7% annual increase)
- Choa Chu Kang (prices rose from S$232,000 to S$345,000 or a 3.9% annual increase)
- Woodlands (prices rose from S$225,000 to S$346,000 or a 4.3% annual increase)
- Prices are the highest in Queenstown (S$695,000) and lowest in Choa Chu Kang (S$345,000)
- Only 7 out of the 22 listed towns have prices higher than the average of S$455,000. They are Queenstown, Bukit Merah, Clementi, Kallang/Whampoa, Bishan, Toa Payoh and Ang Mo Kio.
- The remaining 15 towns have prices lower than average. This suggests that when people have a good view towards the popularity and attractiveness of an area, others share the same sentiment, and it is usually priced in.
The findings generally aren’t rocket science, but bears out in numbers the hypothesis that location plays a factor in price trends.
The next question is – Since prices have risen quite a fair bit in the better performing estates of Clementi, Kallang/Whampoa and Bukit Merah, will they continue to rise in future? Or could better value be found in the poorer performing estates of Sembawang, Choa Chu Kang and Woodlands where prices have not risen as much?
My suspicion is that prices can’t rise that much more, except in line with inflation and cost of materials. This is because the estates where prices have performed well are generally where flats are older e.g. 30 year old.
The government has a ruling that only a certain portion of a buyer’s CPF can be used for flats that are older, so that would mean the present owners need to find someone who is relatively cash rich to buy their present flat should they wish to sell.
I know that Singapore has the highest population of millionaires in the world and Singaporeans are generally cash rich, but it would definitely be easier to find a buyer who wants to use cash + CPF to pay for their purchase.
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