You might have figured from the title… Age is definitely not just a number when we’re talking property.
We’ve looked at the pros and cons of buying an older HDB flat, including how HDB flats generally get cheaper as they age since they’re built with 99-year leases.
But exactly how much cheaper? We calculated the average prices of all the 4-room HDB flats (just because they’re the most common HDB flat size) sold this 2019, according to the year they were built:
The biggest price difference seen in Bishan
And the difference is B-I-G. 4-bedroom flats built between 1970-1979 were sold for an average of $328,000, one of the cheapest in Singapore, while those built from 2000 onwards were sold for an average of $819,000, one of the priciest.
A price difference of almost THREE HUNDRED per cent?! Sounds extreme, but of course, it’s not just an age thing. For one, the location of the younger HDB flats in Bishan are A++++. The newest ones, launched in 2006, sits along Bishan Street 13, a 10 minutes’ stroll to Bishan MRT Station. Definitely a big reason for a big price tag.
But there are exceptions
For instance, in Serangoon, 4-room HDB flats built between 1980-1989 were sold for an average of $468,000 while the figure for those built between 1990-1999 is $395,000.
So clearly, age isn’t the only factor that determines price. Also consider other characteristics like the HDB flat’s location within the district. How close is it to the MRT? The closest supermarket? Is the chicken rice downstairs any good?
HDB’s Home Improvement Programme (HIP)
And if you’re thinking, “But you get what you pay for…”, that doesn’t mean older HDB flats are meh just because they’re generally cheaper.
All HDB flats undergo HDB’s Home Improvement Programme (HIP) twice in their lifetime. The HIP maintains the condition of ageing HDB blocks, and adds improvements where applicable, if your block is selected and at least 75% of the eligible Singapore Citizen households must vote in favour of it.
Possible HIP works are divided into Essential Improvements and Optional Improvements. Essential improvements, such as the repair of structural cracks and replacement of waste pipes are provided at no cost; Optional Improvements, such as toilet upgrading, are highly subsidised (up to 95%!).
But our point is, this helps retain the flat’s value, slowing down the price effects of lease decay.
Price vs age
Perhaps this might change the way you look for your next home, or at least gave you some insight into this whole price vs age thing.
Spot any other patterns? Share it with us in the comments section below!