Where HDB resale flats won’t break the bank

Feeling priced out of the property market? Here’s a look at which HDB towns house 3, 4 and 5-room flats that are transacting at lower prices than the rest of the market.

PRICES of HDB resale flats have increased steadily over the past two years. In 2021, the Housing Development Board resale price index jumped 12.7 per cent year-on-year, which was the highest annual rate of growth in the past decade. In the past two years since the start of the Covid-19 pandemic, public housing prices in Singapore have grown 18.4 per cent.

The rapid rate of price growth of HDB resale flats was due to the combination of a few factors. Construction delays from pandemic-induced supply chain disruptions and lockdowns extended the wait for Build-To-Order flats to beyond 4-5 years, from the usual 3-4 year wait after application.

Some HDB homebuyers who could not afford the long wait chose to buy from the resale market instead, leading to a sharp increase in demand. About 31,000 HDB resale flats exchanged hands last year, which was 25.3 per cent more than the number of resale flats transacted in 2020. As the stock of available resale HDB flats is inelastic in the short term, prices increased as a result.

Despite the still rising prices and news of more HDB resale flats transacting at over S$1 million - with the latest benchmark set by a unit in Dawson that sold for S$1.418 million in July, is it still possible to find affordable HDB flats?

This report will identify the HDB towns with the lowest median transacted prices of four commonly traded HDB flat types - namely 3-, 4-, 5-room and executive flats. The median transacted prices are based on available data for the period from July 2021 to June 2022. While smaller flats cost less, the total number of 1-room, 2-room flats and studio apartments only made up less than 4 per cent of the entire population of resale flats islandwide. By contrast, the number of 4-room flats alone is more than ten times the combined number of these three types of flats.

3-room HDB resale flats

Based on median transacted resale prices of HDB flats, the top five towns with the cheapest 3-room HDB resale flats in the time period of this study were Geylang, Toa Payoh, Jurong West, Woodlands and Bedok.

The lowest median prices of resale for 3-room flats was in Geylang at S$305,000, while the median price of the seventh to tenth towns with the lowest prices of such flats ranged from S$345,000 to S$348,000.

Four of the ten towns with the lowest median prices of 3-room flats were HDB mature estates. They were Geylang, Toa Payoh, Bedok and Ang Mo Kio. It may seem counter-intuitive for these popular mature estates to offer some of the cheapest HDB 3-room flats in Singapore, especially with Toa Payoh, Ang Mo Kio and Geylang all located near the city area.

A key reason for the relatively lower prices in these four mature towns was the age of these flats. The median year of lease commencement of the transacted 3-room flats in these four mature estates were before 1981 - making them over 40 years old, while the median year of commencement of the lease in the non-mature towns started after 1981.

4-room HDB resale flats

The HDB town with the lowest median price of 4-room HDB flats was Woodlands at S$435,944. It was followed by Sembawang, Jurong West, Yishun, and Jurong East. Among the ten towns with the lowest median transacted prices of 4-room flats, Bedok was the only mature HDB estate. Unsurprisingly, the median age of the transacted 4-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 S$460,000 to S$475,000. The median price of 4-room HDB flats islandwide was S$490,000.

5-room HDB resale flats

Sembawang was ranked first among the HDB towns with the most affordable 5-room flats at S$510,000, which was 13.6 per cent cheaper than the islandwide median price of S$590,000 for such flats. Among the ten HDB towns with the lowest median prices for 5-room flats, Pasir Ris was the only mature HDB town and ranked in eighth place.

The median prices of the 5-room flats in the top eight towns were still cheaper than the islandwide median price of this flat type, which stood at S$590,000. This indicates that homebuyers have more than 50 per cent chance of finding 5-room flats in these eight towns that are cheaper than the islandwide median price.

At the median price of S$600,000, Punggol ranked last among the ten most affordable HDB towns. This is because generally, the 5-room flats in Punggol are the newest among similar flats in the ten towns.

Executive flats

Executive flats are the largest type of HDB flats and hence, generally the most expensive type of public housing flats. Currently, there are about 65,000 such flats, making up 6 per cent of the total population of HDB flats in Singapore. Such flats are a favourite among homebuyers who prefer more space.

The town with the lowest median price of transacted executive flats was Sembawang at S$589,000, compared to the median transacted price of executive flats across the island at S$718,000 in the last twelve months. Ranking in the second to fifth position for the lowest median prices of executive flats were Jurong West, Punggol, Sengkang and Choa Chu Kang respectively.

Location, location, location

In general, the most affordable bigger flats, such as the 4-room, 5-room and executive flats, could be found in Sembawang. This town in the north region came top in the ranking of lowest median prices for 5-room and executive flats, and second position for 4-room flats.

Three other towns surfaced among the lowest median transacted prices for all four types of flats. They were Jurong West, Woodlands and Yishun. Homebuyers could have a better chance to find affordable resale flats of different sizes in these three towns.

Jurong West had the most affordable flats of different sizes. At the opposite end, Ang Mo Kio only appeared once in the top ten "most affordable" list, in the 3-room flat segment where the town ranked in seventh position.

The writer is ERA Realty's head of research and consultancy

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