HDB towns that buck the price trend

By
Nicholas Mak
,
ERA Research & Consultancy
/ EdgeProp Singapore
|
July 8, 2022 8:00 AM SGT
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SINGAPORE (EDGEPROP) - In Singapore, close to eight out of every 10 persons live in an HDB flat. Prices of HDB resale flats has increased steadily over the past two years. In 2021, the HDB resale price index jumped 12.7% y-o-y, which was the highest annual rate of growth in the past decade. Since the start of the Covid-19 pandemic, prices of public housing in Singapore have grown 18.4%.
The rapid rate of price growth of HDB resale flats was due to the combination of a few factors. The supply chain disruption and lock-downs due to the pandemic had led to shortages of materials and manpower in the local construction industry. As a result, the construction of HDB flats was disrupted and delayed. Some HDB homebuyers who could not afford the long wait chose to buy completed HDB flats from the resale market.
This led to a sharp increase in demand for resale flats. About 31,000 HDB resale flats changed hands last year, 25.3% more than the previous year. That led to a spike in prices.
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Despite the rising prices in public housing, is it still possible to find affordable HDB flats? The objective of this report is to examine where the cheapest HDB flats are located. (Find HDB flats for rent or sale with our Singapore HDB directory)
HDB BUKIT BATOK EAST TOH GUAN MRT JURONG EAST FLYOVER - EDGEPROP SINGAPORE
Bukit Batok is ranked 6th among the HDB towns with the most affordable 3-room flats, and 7th among the most affordable 4-room flats in terms of median prices over the past 12 months from July 2021 to June 2022 (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Methodology

This study will identify the HDB towns with the lowest median transacted prices of four commonly traded HDB flat types. The median transacted prices are based on the available data for the period from July 2021 to June.
For each type of HDB flats examined in this study, the 10 towns with the lowest median transacted prices of each type of flats will be identified and ranked in ascending order.
Although there are seven types of HDB flats based on their sizes, this study will examine the prices of four of the most commonly traded HDB flats, namely the three-, four-, five-room and executive flats.
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The total number of one-room, two-room flats and studio apartments only made up less than 4% of the entire population of resale flats island-wide. There is insufficient transaction data of these three types of smaller flats for this study. By contrast, the number of four-room flats alone is more than 10 times the combined number of these three types of flats.
Jurong West - EDGEPROP SINGAPORE
Jurong West (pictured) was among the top five towns with the cheapest three-room HDB resale flats in the time period of this study (Photo: Samuel Isaac Chua/EdgeProp Singapore)

HDB towns with the cheapest three-room flats

Based on the median transacted resale prices of HDB flats, the top five towns with the cheapest three-room HDB resale flats in the time period of this study were Geylang, Toa Payoh, Jurong West, Woodlands and Bedok. The ranking of the towns with the cheapest three-room flats based on the median transacted prices in ascending order is shown in Table 1.
The lowest median prices of resale for three-room flats was in Geylang at $305,000 while the median price of the seventh to tenth towns with the lowest prices of such flats ranged from $345,000 to $348,000.
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Four of the 10 towns with the lowest median prices of three-room flats were HDB mature estates. They were Geylang, Toa Payoh, Bedok and Ang Mo Kio.
TABLE 1 - EDGEPROP SINGAPORE
Source: ERA Research & Consultancy, HDB
It may seem unusual for these popular mature estates to offer some of the cheapest HDB three-room flats in Singapore. Toa Payoh, Ang Mo Kio and Geylang are mature estates located near the city area. Toa Payoh and Ang Mo Kio are centrally located while Geylang is only a 10-minute drive to the CBD.
A key reason for the relatively cheap three-room HDB resale flats in these four mature towns was the age of these flats. The median age of the three-room flats in these mature towns were older than the median age of the three-room flats in the other six non-mature towns in the list.
The median year of lease commencement of the transacted three-room flats in these four mature estates were before 1981, while the median year of commencement of the lease in the non-mature towns started after 1981.
Toa Payoh is one of the four mature HDB estates with the lowest median prices of three-room flats (Photo: Samuel Isaac Chua/EdgeProp Singapore)

HDB towns with the cheapest four-room flats

The HDB town with the lowest median price of four-room HDB flats was Woodlands at $435,944. It was followed by Sembawang, Jurong West, Yishun and Jurong East in the second to fifth position respectively, based on the ranking of the towns with the cheapest median prices of four-room flats in ascending order.
TABLE 2 - EDGEPROP SINGAPORE
Source: ERA Research & Consultancy, HDB
Among the 10 towns with the cheapest median transacted prices of four-room flats, Bedok was the only mature HDB estate. Not surprising, the median age of the four-room flats in Bedok was relatively older than the others. The median price of the seventh to tenth towns with the lowest prices of such flats ranged from $460,000 to $475,000.
The median price of four-room HDB flats island-wide was $490,000. The median prices of four-room flats in these 10 towns were still lower than the island-wide median price for such flats, illustrating the affordability of such flats in these towns.
The HDB town with the lowest median price of four-room HDB flats was Woodlands at $435,944 (Photo: The Edge Singapore)

HDB towns with the cheapest five-room flats

Sembawang was ranked first among the HDB towns with the most affordable five-room flats at $510,000, which was 13.6% cheaper than the island-wide median price of $590,000 for such flats.
Among the 10 HDB towns with the lowest median prices for five-room flats, Pasir Ris was the only mature HDB town and it is ranked in the eighth position.
TABLE 3 - EDGEPROP SINGAPORE
Source: ERA Research & Consultancy, HDB
The median prices of the five-room flats in the top eight towns were still cheaper than the islandwide median price of this flat type, which stood at $590,000. This indicates that homebuyers have a more than 50% chance of finding five-room flats in these eight towns that are cheaper than the islandwide median price.
At the median price of $600,000, Punggol was ranked last among the ten most affordable HDB towns. This is because generally, the five-room flats in Punggol are the newest among similar flats in the list of the 10 towns.
HDB PUNGGOL - EDGEPROP SINGAPORE
The five-room flats in Punggol are among the newest flats in the list of the 10 towns (Photo: Samuel Isaac Chua/EdgeProp Singapore)

HDB towns with the cheapest executive flats

Executive flats are the largest type of HDB flats and hence, could be counted as the most expensive type of public housing flats. Currently, there are about 65,000 such flats, making up 6% of the total population of HDB flats in Singapore.
Over time, executive flats will gradually made up a smaller proportion of the total stock of flats island-wide. Such flats are the rarest among the four types of flats in this report. They are a favourite among homebuyers who prefer spacious homes.
TABLE 4 - EDGEPROP SINGAPORE
Source: ERA Research & Consultancy, HDB
The town with the lowest median price of transacted executive flats was Sembawang at $589,000. Ranked from the second to fifth positions for the cheapest median prices of executive flats were Jurong West, Punggol, Sengkang and Choa Chu Kang respectively.
The median transacted price of executive flats in Singapore was $718,000 in the last twelve months. Attesting to the high prices of executive flats, the median prices of such flats in towns that were ranked in the ninth position onwards were higher than the island-wide median price of this flat type, illustrating such flats are not the most affordable public housing in Singapore.
Choa Chu Kang - EDGEPROP SINGAPORE
Choa Chu Kang (pictured) is among the towns with the lowest median price for executive flats (Photo: Samuel Isaac Chua/EdgeProp Singapore)

HDB towns with cheaper flats

An analysis of the data reveal some interesting results. Table 5 shows the ranking of each type of flats in the respective HDB towns.
If the HDB town is among the 10 towns with the lowest median prices of a particular flat type, its ranking for that flat type will be displayed in Table 5.
TABLE 5 - EDGEPROP SINGAPORE
Source: ERA Research & Consultancy, HDB
First, the most affordable bigger flats, such as the four-room, five-room and executive flats could be found in Sembawang. This town in the north region occupied the first position in the ranking of lowest median prices for five-room and executive flats, and the second position for four-room flats. Therefore, homebuyers who are looking for affordable bigger flats should explore the Sembawang resale market.
Second, three towns appeared in the top 10 ranking for the lowest median transacted prices for all four types of flats. They were Jurong West, Woodlands and Yishun. This shows that homebuyers could have a better chance to find affordable resale flats of different sizes in these three towns.
Third, among the three towns mentioned above, Jurong West had the most affordable flats of different sizes as it was ranked within the top three lowest median prices for all the four flat types. This means that house hunters could have even more opportunities to buy the cheapest HDB flats of various sizes in Jurong West than in the other towns.
Fourth, Ang Mo Kio only appeared once in the top 10 list which the median price of the three-room flats ranked in the seventh position. This means that other than the three-room flats in Ang Mo Kio, all the other types of flats are not the most affordable.
Ang Mo Kio and Bedok - EDGEPROP SINGAPORE
Ang Mo Kio and Bedok (pictured) had relatively low median prices for three- and four-room flats, while Pasir Ris was ranked eighth and ninth in terms of five-room and executive flats respectively (Photo: Albert Chua/EdgeProp Singapore)
Ang Mo Kio and Bedok had relatively low median prices for three- and four-room flats, while Pasir Ris was ranked eighth and ninth in terms of five-room and executive flats respectively.
These three mature towns were not ranked within the top five cheapest median prices for all the four flat types, illustrating that they are not the towns with the most affordable flats in Singapore. However, homebuyers who are hunting for affordable HDB flats in mature estates could search the resale market in these three towns.

Conclusion

Although HDB flats are the most affordable housing in Singapore, the prices of such real estate can differ widely depending on the location, age and size of the flats.
Typically, the cheaper flats could be found in the non-mature estates located further away from the city centre. However, it is still possible to find affordable flats in centrally located mature estates if the buyer does not mind that such flats are usually older.
Nicholas Mak - EDGEPROP SINGAPORE
Nicholas Mak is head of research and consultancy department at ERA Realty Network (Photo: ERA)

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