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As some of you may already know, prices of resale HDB flats can continue to go up even after 50 years. But does that mean they’re a safe bet in the long run? The real concern for many buyers is whether these older flats will hold their value or start losing it down the road.

To help you make a more informed decision, let’s dive into the appreciation trends of older HDB flats and see how they stack up against their newer counterparts:

Looking at price movements from 2013 to the present

We looked at the price movements of HDB flats in five different categories, over the past decade: 

• 0 to 9 years old
• 10 to 19 years old
• 20 to 29 years old
• 30 to 39 years old
• 40+ years old 

Note that we’ve excluded HDB landed properties, 1 and 2-room flats and 3Gen flats as these are more niche properties, with low transaction volumes that will skew results. We’ve also excluded any flat that was transacted before its five-year MOP, as these flats are sold under special circumstances (e.g., divorce or death).

Total number of transactions:

Year	3 ROOM	4 ROOM	5 ROOM	EXECUTIVE	Grand Total
2013	4,770	5,816	3,558	1,322	15,466
2014	4,977	5,963	3,451	1,064	15,455
2015	4,871	6,535	4,086	1,351	16,843
2016	4,811	6,848	4,396	1,489	17,544
2017	4,671	6,816	4,582	1,624	17,693
2018	4,537	6,631	4,973	1,876	18,017
2019	4,517	6,514	4,600	1,669	17,300
2020	4,209	5,881	4,517	1,882	16,489
2021	4,904	7,065	5,693	2,259	19,921
2022	4,847	6,745	4,975	1,885	18,452
2023	4,731	6,629	4,285	1,503	17,148
2024	3,476	4,823	3,335	1,219	12,853
Grand Total	55,321	76,266	52,451	19,143	203,181

Here’s a quick look at the overall performance so far:

This general snapshot is based on HDB flats that reached their MOP by 2013, and were transacted. As you can see, the ROI over a 10-year period is unimpressive. This is likely due to a big change in 2013, which sent resale prices into a decline until around 2019.

In 2013, HDB resale prices were at an all-time high. To cope with this, the government imposed a Mortgage Servicing Ratio (MSR), which capped monthly loan repayments to 30 per cent of the buyer’s monthly income. The MSR continues to be a major factor in restraining prices today. 

Another change was HDB’s decision to no longer publish Cash Over Valuation (COV) rates. Buyers and sellers now have to agree on the price first, and the valuation is revealed by HDB afterwards. This has lost some of its effects, however, as COV has once again become the norm (and prices are based on previous transactions, which would be the whole price including any COV.)

Following the housing supply crunch during COVID-19 and its aftermath (2020 to 2024), these flats have since made up their losses. You can see the ROI is once again positive. 

Now, let’s look at how older flats fared by comparison

Let’s have a look at how older flats (30+ years old) have performed. We’re going to use price per square foot instead of the overall quantum, as for these flats there are more variations in size.

3 Room Flat Price Appreciation (By Age)

4 Room Flat Price Appreciation (By Age)

5 Room Flat Price Appreciation (By Age)

Executive Flat Price Appreciation (By Age)

1. Older flats were more heavily affected during the downturn

If we look at the 2013 to 2019 period, we can see that the oldest flats (40+ years old) were the most adversely affected. One possible reason is that, during a buyer’s market, prospective buyers can afford to be more picky. There are plenty of affordable alternatives nearby, and in such situations, the flat’s age becomes harder to overlook. 

Keep in mind that when a flat has 60 years or less on the lease, the maximum financing (from banks) will decrease; and once a flat has 30 years or less on the lease, loans may no longer be possible. This also comes with restrictions on CPF usage for older flats. So if you buy a 40-year-old flat and stay in it for another 10 to 15 years, you shouldn’t expect much from future buyers. 

That said, you’ll notice that 5-room and larger flats appear to buck the trend during downturns. This leads us to the next observation:

2. 5-room and executive flats show better resistance to downturns

You’ll notice that 3 and 4-room flats saw the worst declines between the 2013 to 2019 downturn. Older 5-room flats, however, saw smaller declines compared to 10 to 19 year-old flats. 

In addition, 5-room and executive flats saw the best overall growth rates, if we look at a 10-year time frame (from 2013 to 2024). This suggests that size plays a significant role: it may be that the combination of more square footage, coupled with affordability, allowed these bigger homes to maintain their prices or see a boost; even in difficult times like Covid. This could be a trend that may continue to persist if bigger HDB flats are no longer built.

3. The 10 to 29 age category performed better across multiple flat types

If you look across 3, 4, and 5-room flats, the best overall performers were those in the 10 to 29-year age range. This could be related to the premium on “young” resale flats: when a flat is sold right after MOP or soon after, it has a significant advantage. The lease decay is negligible, but it’s still ready to move in. There’s also less renovation work that may be required, hence flats like these are typically sold at a premium.

Also, just from the word on the ground, sellers of these flats are often given this advice by their agents. This suggests that, for buyers looking for a cheaper deal, it may be best to avoid flats which are fresh out of their MOP. 

4. Size and affordability can help to maintain older flat prices

The overall picture suggests that, even if the oldest flats don’t always see the best appreciation, they can be resistant to falling prices. A combination of large sizes, at the right level of affordability, helps to maintain the demand – and this means that some of the oldest flats can at least hold their value, much longer than fears of lease decay might suggest. 

It also means that buying an older but much bigger flat (albeit not of the million-dollar kind) might not be the dead-end many assume it is. 

5. Housing grants can make older flats more attractive

We’ve mentioned this a few times before, but it’s important not to overlook the effect of housing grants. The Family Grant (FG) is currently at $50,000 for 5-room or larger flats and $80,000 for 2 to 4-room flats. 

Here’s how that grant can make an older flat more attractive: consider the prices of 4-room flats during an upturn (2020 to 2024):

Year	0 – 9 Years	10 – 19 Years	20 – 29 Years	30 – 39 Years	40 Years Or More
2020	$512,946	$414,482	$397,010	$399,396	$429,278
2021	$553,996	$470,217	$449,478	$436,666	$419,643
2022	$593,040	$507,211	$487,354	$480,272	$462,376
2023	$638,241	$537,973	$521,237	$502,812	$514,631
2024	$676,377	$570,342	$546,386	$523,132	$508,714

As mentioned, the FG is $80,000 for first-timer households (all Singapore Citizens). Now let’s see how much of the flat’s price this grant covers: 

Note that the grant was only $50,000 between 2020 to 2022.

Year	0 – 9 Years	10 – 19 Years	20 – 29 Years	30 – 39 Years	40 Years Or More
2020	9.7%	12.1%	12.6%	12.5%	11.6%
2021	9.0%	10.6%	11.1%	11.5%	11.9%
2022	8.4%	9.9%	10.3%	10.4%	10.8%
2023	12.5%	14.9%	15.3%	15.9%	15.5%
2024	11.8%	14.0%	14.6%	15.3%	15.7%
Change in Proportion	21%	16%	16%	22%	35%

In 2020, for a flat that was zero to nine years old, a grant of $50,000 covered 9.7 per cent of the total price. But in 2024, when the grant was raised to $80,000, the grant covered 11.8 per cent of the price.

This was for a newer flat. But look at it in the context of an older flat: the grant in 2020 covered 11.6 per cent of the price, but in 2023/4 it covered 15.7 per cent of the price. Proportionally, this is a 35 per cent increase, compared to the 21 per cent increase for newer flats. The FG is making the oldest flats a better deal.

We should also consider that HDB recently reduced the maximum Loan To Value (LTV) ratio for HDB loans to 75 per cent of the flat’s price or value, whichever is lower. This is down from an original LTV of 80 per cent. This can make the initial cash outlay tougher for some buyers, and can make the grant even more important. 

(Although do note that those who use bank loans are unaffected, as bank loans were already at 75 per cent LTV anyway). 

We shouldn’t ignore CPF usage as well

If the flat’s remaining lease won’t last till the youngest buyer is at least 95 years old, the amount of CPF you can use will be prorated. In general, this will discourage younger buyers from purchasing older flats. But as the rule change was quite recent (May 2019), it may be a while before we see this reflected in the data. For now, one thing is clear:

Younger buyers who want a big but old resale flat may be challenged by CPF usage issues, whilst retirees wanting to buy bigger, older flats have financing issues due to age (unless maybe they’re rightsizing from a private property). 

In light of that, the continued performance of older flats is not guaranteed. We know that past performance isn’t always a reliable indicator of future results, and a lot of how things would play out depends on many factors (the upcoming supply, Government intervention and measures, etc.) There’s also fewer flats that have reached the 35+ age group, which provides limited data. We simply can’t be sure that the results we see here will continue to hold true, in the decade or so to come.

For more news on the Singapore property market, as well as reviews of new and resale properties alike, follow us on Stacked. If you’d like to get in touch for a more in-depth consultation, you can do so here.