Million-dollar HDB flats are hiding a worrying resale price trend. Here’s proof.

11 min read

In November 2020, another 13 HDB flats were transacted in the resale market for a price of $1 million and above—taking the number of million-dollar flats sold in the calendar year to an all-time high of 73 with a month left to go. (The previous high was 72 flats in 2018.)

Notably, we are seeing HDB flats further away from the city centre clock million-dollar transactions. Ang Mo Kio notched its first and second million-dollar HDB transaction this year, whereas Clementi saw four million-dollar transactions this year alone, compared to five from 2016 to 2019.

Million-dollar HDB flats in more towns fits “rising resale price” narrative

The abundance of million-dollar transactions coincides with an apparent rebound of the HDB resale market, which has been one of the key narratives in the property market this year after years of being in a slump according to the official HDB Resale Price Index (RPI).

In Q3 2020, the RPI registered its largest quarterly increase in nearly eight years, rising 1.5%.

hdb resale price index q3 2020
The HDB resale price index as of Q3 2020. Source: HDB


According to the HDB, the RPI is “calculated using resale transactions across towns, flat types, and models.” If the index increases by 1.5% in that quarter, HDB’s logic is that on the whole, prices increased by about 1.5% over that quarter.

Whoa, wait a minute. It wasn’t long ago (2018, to be exact) that our government’s comments had caused public debate about HDB lease decay and declining resale value. It turned out that many Singaporeans had thought the government would bail them out of ageing, 99-year leasehold HDB flats with the Selective En Bloc Redevelopment Scheme (SERS).

Amid the commotion, the government came up with additional proposed measures to “cushion” the depreciation of ageing flats in that year’s National Day Rally. These measures, such as VERS, haven’t been launched yet, but many Singaporean HDB flat owners seem to have gotten well over the initial ‘panic mode’ about their HDB assets.

Why have they calmed down? It could be because, unlike in 2018 when the RPI fell by 1%, the performance of the index this year generated a media narrative that everything’s rosy again on the whole.

Is that the truth, or just a version of it? By looking deeper into data, we discovered that reality is more complex than what the index presents us with. Furthermore, it’s those HDB towns that recently joined the ‘million-dollar club’ that might provide the most worrying picture of the HDB resale price situation.


Ang Mo Kio: Resale values distorted by newer HDB flats

To analyse HDB resale prices in Ang Mo Kio, we singled out the following four different areas in the town:

  • Teck Ghee Vista (Completed in 2011 and made headlines for a $1.09 million transaction in November 2020)
  • Old HDB flats near Ang Mo Kio MRT (Built in the late 1970s with 55 to 56 years of remaining lease; nearer to the MRT than Teck Ghee Vista)
  • Old HDB flats near upcoming Mayflower MRT (Mostly built from 1977 to 1981; within walking distance of Mayflower MRT station)
  • Old HDB flats along Ang Mo Kio Ave 10 (Mostly built from 1979 to 1981; not within walking distance of an MRT station)

Let’s look at the price performance of four-room flat types in each of these areas in Ang Mo Kio:

hdb resale price trend ang mo kio chart 2020
You can click/tap and zoom in to view. Source: Researcher

A lot is obvious at first glance. As Teck Ghee Vista, where a unit changed hands for nearly $1.09 million in November 2020, resale prices are on an uptrend.

But the story is different for the older flats in Ang Mo Kio. Even flats that are better located than Teck Ghee Vista, the ‘Old HDB flats near Ang Mo Kio MRT’ (in purple), haven’t been spared from what’s likely to be the effects of lease decay.

From 2013 up until the end of November in 2020, as average four-room flat prices in Teck Ghee Vista increased by 2.2% (from $618,500 to $631,768), average prices of old flats near Ang Mo Kio MRT fell a staggering 19.6%, from $551,174 to $443,327!

In this time, the overall HDB Resale Price index had fell by about 10%, hinting that any negative change in HDB resale prices may be “cushioned” by the robust prices for newer resale flats.

To prove the point, even as the RPI reported a 1.5% increase in resale prices in Q3 2020, we can see that the average transaction prices of older four-room flats in Singapore declined by 1.46% instead:

hdb resale price trend 4-room 2020
You can click/tap and zoom in to view. Source: Researcher

It’s also highly revealing that, despite there being about three times more number of flats built before 1990 than flats built on or after 2000, resale volume for the latter continues to outpace the former, indicating that Singaporeans much prefer newer flats to older ones. This preference and the resulting differences in demand could further exert downward pressure on prices of older flats.

For Ang Mo Kio, there could be silver lining for residents living in older flats near the upcoming Mayflower MRT station. The opening of the new station could help shore up declining resale value (prices in this area has remained flat in the first three quarters of 2020).

However, the same can’t be said about the older flats along Ang Mo Kio Avenue 10. Previously fetching the same average price as the flats near the upcoming Mayflower MRT, the lack of an MRT station has caused prices here to sink below the Mayflower flats.

And, as you can see from the Ang Mo Kio chart, the resale transaction prices for the newer flats in the town distorts the average (the blue line), making it seem like average resale prices for the estate are ticking up when, in fact, many older flats are going in the opposite direction.

So, instead of putting attention on how Ang Mo Kio is entering the big million-dollar league of resale flats, we should rightly be more concerned about the outlook of older flats in the town as they barrel towards the latter half of their remaining leases.

ang mo kio
Some of Ang Mo Kio’s older flats have seen their value decrease by up to 20% in the past three years.

Clementi: New resale HDB flat values rise at the expense of older flats

In Clementi, where four HDB flats have transacted at or above the million-dollar mark this year, it’s very much the same story. Here are the four areas in the town that we singled out for comparison:

  • Casa Clementi (Completed in 2013)
  • Old HDB flats near Clementi MRT (Mostly built in the late 1970s with 56 years of remaining lease; nearer to the MRT than Casa Clementi)
  • Old HDB flats in West Coast (Built between 1978 and 1985)
  • Old HDB flats along Sungei Ulu Pandan (Mostly built from 1979 to 1980; not within walking distance of an MRT station)

Let’s look at the price performance of four-room flat types in each of these areas in Clementi:

hdb resale price trend clementi chart 2020
You can click/tap and zoom in to view. Source: Researcher

The 2,234-unit Casa Clementi, a SERS project, was the town’s first new HDB development since the early 2000s. The year 2017, when owners of Casa Clementi began selling their flats in the open market after their Minimum Occupation Period, we saw prices for all the other areas begin to fall.

While average transaction prices for four-room flats at Casa Clementi have seen a 5.1% uptrend from 2018, prices for ‘Old HDB flats near Clementi MRT’ fell by 3.8% in the same period.

Prices for the cluster of flats in the north of Clementi, ‘Old HDB flats along Sungei Ulu Pandan’, fared even worse, falling by nearly 8.5% in the span of 23 months. Meanwhile, prices for old four-room flats in the West Coast area of Clementi fell by about 6.75%.

2018 was also the year that average resale prices in Clementi became distorted, showing the flat-ish trend that did not convey how older resale flat prices continued falling.

It is also worth noting that HDB launched more than 1,600 new Build-to-Order (BTO) flats in Clementi in 2017—a move that could possibly explain the price falls across the board. That year alone, prices for old flats near Clementi MRT fell by 9.2%.

In the HDB resale market, new flats like Clementi Crest (pictured) might exert severe downward pressure on prices for older flats in the same town.


Taller HDB blocks also distorting resale prices

Higher floor units fetch higher prices. And the arrival of super high-rise flats going up to 30 and 40 storeys in recent years could be amplifying the distortion of prices in the resale market overall, seeing as most older flats are only 10 to 15 storeys in height.

In fact, our data shows that in projects that have had multiple million-dollar transactions, none of those transactions were for flats below the 25th storey. For The Peak @ Toa Payoh, which has seen four seven-figure transactions this year, the median floor level for these transactions is 38th storeys.

To illustrate the effect that floor levels have in distorting HDB resale prices, we singled out four-room units in Ang Mo Kio’s 30-storey Teck Ghee Vista for comparison:

teck ghee vista hdb ang mo kio prices floor level chart
You can click/tap and zoom in to view. Source: Researcher

Evidently, prices of similarly configured flats on higher floors not only fetch a price premium, they may also experience price growth at a higher rate than flats on lower levels.

Also, while prices of units on higher floors are currently experiencing a medium-term uptrend, the same can’t be said of the lower floor units. (Prices of lower floor units at Teck Ghee Vista have been trending down since 2018.)

From this, we can say that HDB resale price trends are being distorted partly because of the increasing number of transactions of super high-floor units in the resale market.

Super-high rise flats, like the ones at Dawson, might distort HDB resale prices and give the appearance of an uptrend where there is none.

Can we still trust the HDB Resale Price Index?

While HDB Resale Price Index is arguably still a reliable gauge of OVERALL price trend for resale flats, the lack of explanation in its methodology means that Singaporeans cannot simply take it at face value.

The index certainly can’t show us what our data has done, which is to prove that overall price trends may be distorted by newer flats with longer remaining leases, as well as floor level premiums from the sale of newer HDB flats that rise to more than twice the storey height of old flats.

And as the HDB resale market racks up these million-dollar deals, our ministers are once again beginning to focus talk on the ‘lottery effect’ of these newer flats. Perhaps casting the spotlight on the lottery effect, and in the process coming up with enough reasons to curb it, is a way of papering over the growing price divide of newer versus older HDB flats.

This is a rather cynical view, but one that’s justified. The question we need to ask, as more and more estates are seeing million-dollar flats, should be: “Are new BTO flats having the unintended effect of accelerating the decline of resale value of older flats?”

Such a hypothesis could well be correct, and it’s something that will again invoke even more fear among owners of ageing HDB flats. But we can’t run away from it forever, sweep it under the carpet, and blame the lottery effect. One thing’s for sure, we need more independent insights into the HDB resale market, so that we can continue to identify trends that official indices may hide or gloss over to the potential detriment of Singaporeans.


Are new HDB flats causing resale value of old flats to decline even faster? Let us know in the comments below.

If you liked this article, recommends Is pent-up demand for property a myth? and Is the Greater Southern Waterfront just election-speak?

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Reader Interactions


    • Benson Song

      Yes this article is spot on indeed. Resale values have indeed taken a big hit since the “infamous revelation” by the then national development minister that HDB flat values will fall to 0 when the lease runs out, after the constant boasting by the government about asset enhancement and that HDB flat values would not go down, in the not too distant past. I’ve also noticed this disturbing trend happening in Bedok where I live. Just few years ago, the old 3 room flats in Bedok were transacting at more than $300K, but more recently more and more units are being transacted at below $300K. Certain areas and flat types in Bedok have also experienced price declines of up to 20% or more for the older flats in recent years, while those newer flats in Bedok Central are experiencing an uptrend in resale prices generally.

      So it looks like the government will have another big mess to fix in the HDB resale market, if they really care enough to tackle this major timebomb of lease decay leading to huge destruction of asset values for the hundreds of thousands of Singaporeans who are homeowners of older HDB flats.

    • Benson Song

      Sorry I left a comment earlier but need to amend the first sentence which should be read as:

      Resale values of older HDB flats have indeed taken a big hit since the “infamous revelation”…

    • Damodaran S

      HDB flats were meant to be for families to build a home to love, cherish, and grow.

      Now it seems HDB flats are mere properties for investment purposes.

      Once again, value of things are cut down to dollars and cents only.

      A society should evolve beyond money and value other higher possibilities such as social integration, caring society, a nation of thinking people, and make Singapore our home rather than seeing the land of Singapore as a ruthless money making machine in a never ending spiral of accumulating wealth and lose the possibility of creating an intellectual, loving, nature-sensitive, naturally caring society with a wealth of happiness, joy, and good health

      HDB or Housing Development Board should be responsible for making a house available for the people of the Country to build a home and not create a business opportunity to make money out of somebody’s home.

      Thank you

    • Sutjahjo Ngaserin

      Based on empirical observation, the price decay of older HDB flats has been obvious, but this phenomenon was ignored by all media until this brilliant analysis. Kudos to the writer for such a satisfying read!

    • Terrence

      HDBs will always be good investment as the government has always promised such. No need to worry la

      • James

        Is this comment meant to be sarcastic? If not, do you have any how big a moron you are?

    • Will

      Interesting article, but missing an action point. For example, mature flat sellers would be curious when best to sell before the value drops hugely and still have enough to return to CPF WITH INTEREST.

      Buyers on the other hand probably looking for value, so looks like older flat lower floor seems like best buy that has max lease with lowest psf.

      If everyone expects to buy at 500k, stay free 5 years, sell at 1 mill, I’m glad you’re lucky to double your income at that rate. On the other hand, if all leases near zero get bail out, they buy 50k stay 99 years free and still want to get market rate times hundred flats per block? GST 100% bah. Stick to making public housing affordable please.

    • Philip T

      No one loses money on bto. Avoid resale la

    • JY

      Prices should mean revert once older resale gets cheap enough and newer ones become more expensive. But otherwise it is only normal for the prices of older resale to drop due to an accelerated rate of depreciation.

    • Know It All

      Not all old flats are suffering from price depreciation. If you notice, the ones that are depreciating are the corridor flats of 4 rooms or smaller sizes. So if you want to buy older flats, it better have unique features or advantages over the newer flats, such flats will hedge its value over a longer period of time. Otherwise, if there’s newer flats out there that’s bigger in size than your older flat then your flat will face steep price depreciation, along with very slim chances of SERS if the location of the flat isn’t central.

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