The phrase โlocation, location, locationโ is a frequently heard mantra. It echoes the importance of location when buying a new property. While thatโs undeniably true, the next most important consideration for the conscious homebuyer is most assuredly price.
Due to concerns about HDB resale flats reaching the million-dollar mark, homeowners feel discouraged. One of the priciest recent sales was a $1.45 million 4-room unit on Cantonment Road. This trend makes finding an affordable HDB flat on the secondary market challenging.
Turning back the clock to 2012, news broke about the first-ever million-dollar HDB flat when an executive flat in Queenstown sold for seven figures. And ever since, the number of resale HDB flats sold at the million-dollar mark has steadily risen.ย
In 1Q 2024, buyers acquired 183 resale HDB flats in the million-dollar range based on lodged transactions. In 2Q 2024, they purchased an additional 236 units.
Should you worry?
In a vacuum, these figures are daunting for anyone concerned about affordable homeownership in Singapore. Be that as it may, this perspective deserves a second look, this time on a wider scale.ย
Out of 13,203 resale HDB flats sold in 1H 2024, only 419 sold for over a million dollars. This amounts to just 3.2% of all transactions.
Or put another way, for every million-dollar HDB flat sold in the first half of 2024, about 31 others sold for less. This means that, across various price ranges, most transactions remained below the seven-figure benchmark.
Hence, in response to the million-dollar question of finding affordable resale HDB flats today, we confidently say โyes.โ
Still, the proof of the pudding is in the eating (yum!). Below, we spotlight locations in Singapore where both 4-room and 5-room resale HDB flats are available for under a million dollars.
How did the resale HDB flat market perform in the first half of 2024?
Before exploring where to find affordable resale HDB flats, here are some quick facts about the current market as of 1H 2024:
โข Buyers transacted more resale HDB flats in the first six months of 2024 than in the same period last year.
As of 30 June, transactions lodged show modest year-on-year growth in resale HDB flat sales for the first half of 2024. Resale HDB flats sold totaled 13,203 in 1H 2024. This figure represents a 2% increase over 1H 2023, which recorded 12,940 resale HDB transactions.
This year-on-year increase indicates a steady growth in demand for resale HDB flats.
โข The average price for a 4-room resale flat was $608,299 whilst the average price for a 5-room resale flat was $712,604 in 1H 2024.
Hence, based on these average prices, we set the thresholds for โaffordable pricesโ at $650k for 4-room flats and $750k for 5-room flats.
โข Buyers sold 5,663 4-room resale HDB flats in the first six months of 2024.
In the first half of this year, there were a total of 5,663 4-room resale flats transacted. Amongst them, 4,244 units (or roughly 75% of them) were sold for under $650k.
Let us examine the segment of affordable flats by flat age:
Chart 1: Breakdown of 4-room resale HDB flats sold for under $650k in 1H 2024 by ages more than a million dollars.
Units that are 15 years and below (32%) made up the bulk of 4-room resale HDB flats transacted under the $650k mark. This is followed by units that are 36 โ 45 years old (27%) and 26 โ 35 years old (20%).
โข There were 3,050 5-room resale HDB flats sold in the first six months of 2024
As for 5-room resale HDB flats, 3,050 units changed hands in the first half of 2024. And of this number, 2,133 units (or approximately 70% of them) were transacted with a price tag thatโs less than $750k.
Below, a more detailed overview by flat age:
Chart 2: Breakdown of 5-room resale HDB flats sold for under $750k in 1H 2024 by age
Unlike the 4-room resale HDB market in 1H 2024, the most affordable 5-room HDB homes sold are between 16 and 25 years old (38%). Units between 26 and 35 years old follow with 25%, and those between 36 and 45 years old make up 18%.
Where can you find affordable 4-room resale HDB flats for less than $650k?
Of the 26 towns where 4-room resale HDB flats under $650k can be found, the top three are Yishun (416 units), Woodlands (406 units), and Sengkang (373 units).
Map 1: Locations of 4-room resale HDB flats sold for under $650k in 1H 2024
In these satellite towns, residential properties tend to be sold at more pocket-friendly prices than those in the heart of Singapore.
However, this doesnโt mean finding 4-room HDB flats for under $650k in mature towns is impossible. In 1H 2024, Tampines saw 277 units sold, Bedok had 144, and Pasir Ris recorded 113 units. Note, though, that many of these units may be 35 years old or older.
Which towns saw the most sales of 5-room resale HDB flats under $750k?
Similarly, amongst the 21 towns where 5-room resale HDB flats under $750k can be found, the bulk of sales activity mainly took place in suburban locales.
Map 2: Locations of 5-room resale HDB flats sold for under $750k in 1H 2024
In 1H 2024, Sengkang led with 292 units of 5-room flats sold for less than $750k. Woodlands followed with 265 units, and Jurong West had 259 units. These towns also saw significant volumes of 5-room resale flats transacted below the $750k price point.
Once again, Tampines, Bedok, and Pasir Ris topped the charts for mature towns with the most 5-room HDB units sold for under $750k. Tampines led with 158 units, Bedok had 60 units, and Pasir Ris recorded 70 units.
In which towns can you find affordable 4-room and 5-room resale HDB flats that are also relatively young (15 years old and below)?
While price is a major concern for most resale HDB flat buyers in Singapore, they should also consider the age of the homes. Ideally, a resale property should be 15 years old or younger. This ensures a longer remaining lease and helps maintain its value in the future.
Map 3: Resale 4-room HDB flats, 15 years and below, sold for under $650k in 1H 2024
In the case of 4-room resale HDB flats that are 15 years old and younger, these units are most likely to be available in non-mature towns. Topping this list is Punggol with 254 units, followed by Sengkang with 211 units, and Yishun with 191 units.
Map 4: Resale 5-room HDB flats, 15 years and below, sold for under $750k in 1H 2024
Compared to other towns where 5-room HDB flats sold for below $750K in 1H 2024, Yishun, Punggol, and Choa Chu Kang stand out. These towns had the most transacted units that are 15 years old or younger. Yishun accounted for 58 of these units, Punggol had 52, and Choa Chu Kang had 50.
Or in other words, budget-conscious homebuyers have a greater chance of finding a resale HDB flat with more time left on its lease in the abovementioned non-mature estates, and for a reasonable price too!
So, what can aspiring resale HDB flat buyers take away from these findings?
To sum it up, if youโre looking for an affordable 4-room or 5-room HDB resale flat, start your search in suburban Singapore. Generally, home prices are lower in these newer, less-developed estates. This makes it easier to find an HDB resale flat that suits your budget.
Also, finding a resale HDB flat thatโs relatively young will give you the most value for your money. This matters because remaining tenure is a key factor in a leasehold propertyโs sale value. It is especially important if you plan to upgrade in the future.
And finally, not to forget what could be the most important takeaway of all: Donโt lose hope. Because even with the constant buzz surrounding million-dollar housing transactions, affordable resale HDB flats do exist out there somewhere.
Contact me with any questions or for further assistance on Singapore property.
