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HDB price trends

HDB Resale Price Index DOUBLED from 2007 to 2013, dropped slightly to 2015 then stabilized. However, due to high supply of flats completed in 2014 that enter on resale market in 2019, prices are likely to drop more in the coming years.

Actually prices are rising in some towns while dropping in other towns. I sourced data from HDB Resale Statistics and compiled an Excel file showing HDB price trends since 2007, and based on it I created the below charts.

The gaps in lines in Excel chart are because HDB do not provide median price if less than 20 flats were transacted per quarter. Especially in case of Executive flats, it do not display prices on Bishan and Queenstown (towns famous for $1 million HDB flats) because they do not have at least 20 transacted flats except in Q2-Q3 2008.

HDB resale flat prices 1990-2015

As you can see in the chart, Singapore HDB flat prices DOUBLED in 2008-2013 due to insufficient supply of new flats.

Would you like prices dropping next 5 years to the early 2000s value? Think about owners who worked hard to pay current flats which will lose half of value! Would you like prices growing so you and everyone else can make profit selling? Think about your kids, how hard they will need to work to buy their first home!

HDB resale flat prices by flat type HDB resale flat prices per sqm by flat type
HDB resale flat prices per square meter by lease year HDB resale flat prices per square meter by storey

Price trends in 1990s and 2000s

During 1990s, the location was not so important. Like today, Bishan and Bukit Timah had the most expensive resale flats, but a thing less known by the young generation, is that Choa Chu Kang and Pasir Ris were also among expensive estates. Mature towns like Queenstown, Toa Payoh and Ang Mo Kio were cheaper.

Larger flats types had higher price per square meter or feet than small flats, in 1990-1992 average resale price of Executive flats being double than average resale price of 4-room flats, at an area 40% larger.

HDB stopped deciding the prices of new apartments based on construction costs, instead they decided based on market prices. Prices of resale flats and new flats entered in a vicious circle, rising 50% in just 6 months of 1993 and tripled to 1996. The gap between small and large flat types in terms of price per square feet has decreased.

The 1997 Asian Crisis came when 80.000 flats were under construction, demand for new flats felt sharply. leaving HDB with about 40,000 unsold completed flats in the year 2000, mostly large flat types. 2003 SARS outbreak affected economy too. Queue selling system (Registration for Flat) was suspended in 2002, Build-To-Order was introduced to prevent oversupply, and Walk-In-Selection was used between 2002 and 2007 to clear the stock of unsold flats.

The old estates built in 1960s and 1970s suffered from dilapidated buildings, aging population and businesses moving out, so HDB launched various upgrading programmes and Selective En-bloc Redevelopment Scheme to bring them in the line with new estates. Resale flat prices in old estates (where most 3-room are located) started rising in 2002, while in new estates they continued to fall until 2006, Executive flats having biggest fall. Price per square foot between small and large flat types equalized in 2005.

Walk-In Selection ended in 2007 and was replaced by Sale of Balance Flats that is only twice per year and in some towns more than 10 people battle per each flat. BTO became main mode of flat supply. People who cannot wait 3-4 years construction time for BTO and fail at SBF, need to go in resale market. Resale prices started rising.

Prices grew faster in pre-1980 estates fueled by upgrading programmes and agents lying people that all old blocks will get SERS, making prices in Marine Parade, Queenstown, and Toa Payoh to rival those in with Bishan and Bukit Timah. Pasir Ris had lowest price growth.

Singapore economy recovered in late 2000s but HDB failed to anticipate, it ramped up the BTO supply too late and too slow, they offered 5500 BTO flats in 2007, 7800 in 2008, 9000 in 2009 (global recession), 12000? 16000 in 2010, 22000 25000 in 2011, 25000 27000 in 2012, plus DBSS flats and Executive Condos. (strikethrough numbers are initial numbers announced at beginning of year).

Rising supply of BTO became visible in 2012, a small reduction in resale prices growing rate.
HDB lowered minimum application rate for BTO to be built from 70% to 50% in 2011, but since mid-2000s to 2013 no BTO had application rate under 100% (except elderly Studio BTO flats).

Analysts predicted that the prices in Singapore will start dropping in 2012 (example), as they predicted in 2011, 2010 too. In my forecast, resale flat prices will NOT fall even in 2012, but will continue to grow for as many years as HDB refuse to build ahead of demand, forcing us to wait 4 years via BTO!

HDB introduced multiple measures to cool down the market, but all failed, for example Minimum Occupation Period lengthen to 5 years for resale flats in 2011 (does anyone know when 5-year MOP was introduced for new flats?) just made less flats to enter resale market and the number of people not eligible for buying directly from HDB (for example PR and singles) is growing.

Most of BTOs launched in the 3 years 2009, 2010, 2011 been completed in only 2 years 2013-2014… 25000 flats completed in 2014 alone + 5 years MOP = possible market crash in 2019. I am not saying that prices will not start to fall earlier, but 2019 may have the biggest price fall (if other variables would not exist).

Note: The above text was written by my personal research at end of 2011. Later I found a similar research on h88.com.sg: Colin Tan: HDB resale flat prices will stay up, dating from Feb 2012, that confirm my hypothesis They say that prices will drop no sooner than 2017! Oh dear…

Prices dropping since 2013

One of the cooling measures, 3 year waiting period for permanent residents to buy resale flats, introduced in August 2013, created fear that the housing market may crash. Resale flat prices dropped in 3rd quarter 2013, for the first time in 5 years. Such minor drop in prices may cause panic, many owners rush to sell their flats before prices fall more, leading to a chain reaction in price drop, OR if the panic may be just temporarily and prices will rise back next year. However, there are no signs to recover. Every quarter of 2014 added 1-2% drop in prices. No significant drop but still enough to make analysts ANGRY that HDB cooling measures were too powerful and requested to be lifted.

Note that HDB can also invent anti-cooling measures in case prices drop with more than 10% in one year, and these anti-cooling measures can fail as most of the cooling measures failed. HDB wants to stabilize prices, a too sudden drop can be disastrous for entire Singapore economy.

Stupidity: instead of providing an adequate supply of flats, they kept supply low during 2000s despite of population increase, and while demand was rising too few flats entered in resale market, then during 2010s HDB artificially slowed down demand for resale flats with cooling measures, and when prices started to drop, instead of keeping supply high and lift the cooling measures, they announced to decrease supply of new BTO flats 24300 units in 2014 to 16900 units in 2015. A stupid decision! BTO launches do not affect resale prices directly so we expect to see prices dropping and further decrease of BTO supply in the next years, thus the 2008-2013 price bubble risk to happen again during 2020s!

Personalty I hope that HDB will let the price index to drop slowly to 150 (2009 level), THEN lift the cooling measures, but keep the supply of at least 25000 BTO flats per year.

New BTO flat prices won’t fall according resale price index, they were traditionally priced 20% cheaper than nearby resale flat prices, but since 2011 they were “de-linked” and became 30-40% cheaper (even if we exclude grants for first timers) as the HDB anticipated market fall. Even if the prices fall 10% for 3 consecutive years, BTO flat owners will still have profit from selling their flats. This does not apply for DBSS flats which were overpriced at their launch in 2011-2012. Raised income ceiling from $10k to $12k in 2015 may allow HDB to push up BTO prices.

See also:
HDB new flat prices database (1984-2018)
BTO prices database (2001-2018)
Resale flat prices database (1990-2018)

https://kendata12345.wordpress.com/category/4-hdb-bto-flats-price-and-cost-analysis/ – Another website did a detailed analysis of cost of building a BTO flat compared with selling price. He copied my Excel file of BTO prices without my approval.

Survey

If you could decide HDB flat prices to fall or rise, what you would do?

10-20% price rise per year to ensure that every flat owner can make profit when will sell the flat. Forget our children and other young couples
max 5% price rise per year
Maintain prices as constant is possible
max 5% prices fall per year
10-20% price fall per year to quickly make the flats affordable for our children. Forget the current owners which will lose money, but public housing is not meant for investment and profit
Other
Please Specify:

Poll Maker


Poll started February 2016. See also results of previous poll (379 votes between April 2014 and February 2015).

What you should know

– Upgrading programmes and upcoming MRT lines also drive up the nationwide resale price index.
– The small size of today flats may encourage people to go in resale market for flats built before 1998 (NOT SURE if this push up the resale prices, record of psf is now hold by resale flats built in 2000s).
– Prices fall faster in young towns than mature towns, Punggol suffered biggest price fall in late 2013, as results of over-speculation during last years, this after it was the cheapest town in mid-2000s.
– In mature towns prices fall faster in the old 10-storey blocks of Queenstown and Toa Payoh that are getting shadowed by the new 40-storey blocks.

Affordability of HDB flats

Yes they are still affordable!
Proof: every launch, the higher priced BTOs (better locations) gets most applicants.
HDB Website shows application rate. See how 3-room remained unsold and how big is the battle for 5-room despite of higher prices. See the TRUTH about shrinking HDB flat sizes!

63 comments

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    • Marcreo Chan on July 1, 2018 at 12:28 pm
    • Reply

    I am living in 3010 and I came back to 2018…in 3010 Thomas Skruner created a time machine that actually works believe it or not. There are no more HDBs in Singapore since 2082.

      • jesline on July 2, 2018 at 3:53 am
      • Reply

      Macreo Chan, so what’s the reason HDB gone since 2082?

      1. So funny! If time machines will be invented you can travel only in the future but not in the past.

        • Iceboi83 on July 2, 2018 at 2:44 pm
        • Reply

        My guess is Singapore is sink under the water due to global warming

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    • Thomas on June 7, 2019 at 3:14 am
    • Reply

    Its mid 2019 , any update on your hypothesis that market will crash?

    1. As you can see, what I wrote 8 years ago is still valid, https://www.hdb.gov.sg/cs/infoweb/residential/buying-a-flat/resale/resale-statistics#resalepriceindexrpi1383800299748-3 prices are slowly FALLING, the reduction in HDB supply prevented them to fall too much, and the only update I have is that they will continue to fall, maybe fall even faster in the next year.

    • Angeline Koh on June 19, 2019 at 9:49 am
    • Reply

    I just sold my Sengkang private condo and I’m thinking of moving to a maisonette (in a mature estate) for the space and affordability. Do you think this is a bad financial decision or should I just hunt for another private condo?

      • Samuelson Tan on July 6, 2019 at 11:04 am
      • Reply

      Going in line with the report here by Teoalida, I have just sold my condo and is staying in a rented place. I am waiting for HDB prices to drop and then purchase one. I am prepared to wait till early 2020. With the current economic situation and if there is still no sign of any improvement, a recession may also be on its way making this prediction even more likely. Maybe a more controlled recession with lesser woes than the usual norm.

        • Charmaine Liu on July 16, 2019 at 2:57 am
        • Reply

        Hi Samuelson Tan, if you anticipate that recession is coming, then why not have a place of your own right now and rent out for passive income to help you ride over the recession period?

        I do have clients worrying that their job is ‘not secured’ especially when economy is not doing well. It is normal to feel worry. But why do people get worried when they lose their job, is partly because they never do other form of investment to tide them over such situations. That’s why if you have a place of your own to rent out, it will become a Calculated Risk Investment.

        You may like to contact me at charmaine.liu@yahoo.com to know more and I promised it is non-obligatory with no strings attached.

          • Charmaine Liu on July 16, 2019 at 3:03 am
          • Reply

          Sorry, please use my new email liu.charmaine@yahoo.com

      • Charmaine Liu on July 16, 2019 at 2:41 am
      • Reply

      Hi Angline, just sharing some penny of thoughts here as a real estate agent. I have witnessed many couples buying private condo as their matrimonial flat or EC, they are mostly in their 20s-30s. Their reason is that the environment is more conducive with facilities suitable for their young kids or when they are having a house gathering. Security is tighter to keep non-residence out of the compound. All in all, the housing trend has tilted in favor of private housing in Singapore residential scene. Piermont Grand, Woodleigh Residences, The Florence, Riverfront, Treasure at Tampines, The ESTA, Amber Park and many more, their showrooms are packed with people and half of the units are taken within a short timeframe. Why is it so?

      Current HDB value is indeed dropping as what the author of this website has shared using chart & figures, and also you can see from HDB resale statistic that 2019 HDB resale prices has steadily gone down since 2017. I am not mentioning BTO because prices for these housing is fully controlled by the government, therefore, will not be accurate in monitoring the true market value of HDB. Now is 2019, almost half of 99yr lease HDB island-wide is coming to or has gone beyond the 60yrs mark. Government is still unable to provide a peace of mind to current HDB-owners as what is to come when their 99yr lease reaches the end. Although government has introduced SERS, VERS, downsizing scheme or lease-buy-back, it is still not providing a clear answer to all the woes. If you were to purchase back HDB, then you need to think further what is your future plan? Is it purely for your own stay? Do you plan to have a big family? As times goes, will the family members move out to a house of their own, resulting in lesser people staying in a maisonette? By then, is the maisonette space still good enough for the remaining members? Will you consider to downgrade to smaller unit? Are you prepared to accept that your maisonette will fetch lower price than what you have paid for?

      On the other hand, let’s talk about private. Regarding the remaining lease coming to near end, owners do not have as much woes as HDB owners because they are in control whether all owners are agreeable to sell their land to developer. HDB owners can’t sell land back to government and government has not given assurance that they will pay back market price for the units once the land reaches 99yrs. Let’s say, you may want to go into some investment in the future, condo rooms or unit rental are more sought after for the amenities and rules are less stringent than renting out HDB.

      Having shared that private condo are much more valued by buyers than HDB in general, there are also many buyers in the HDB sector too. The needs, budget and purpose are very different for these 2 groups of buyers. For yourself, you need to identify your requirement/needs and prioritize them so that you can come to a conclusion which is suitable for you and family.

      If you would like to know more, I’ll be glad to share with you at no obligation attached. Your can email me at charmaine.liu@yahoo.com

        • Charmaine Liu on July 16, 2019 at 3:03 am
        • Reply

        Sorry, please use my new email liu.charmaine@yahoo.com

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