Living in an HDB flat near an MRT station in Singapore is the ultimate convenience as the MRT is the most efficient mode of public transport in Singapore. Residents in the vicinity of MRT stations enjoy shorter commutes and close proximity to the shops and amenities clustered around the station.
Naturally, distance to an MRT station can have a significant impact on property prices, with properties within 500 metres of a station commanding a premium. This is more commonly known as the ‘MRT effect’.
New MRT lines, in particular, have generated buzz for properties in the neighbourhoods where they were built, giving property prices a boost and revitalising certain locales as developers and new businesses transform the area.
As it is, rental prices for HDB flats are edging up and HDB resale prices are at a new record high. Whether you’re looking to rent or buy, it’s important to factor in these costs to stay within your budget.
So, exactly how much more do HDB flats near MRT stations cost? Where is the ‘MRT effect’ the strongest? Let’s find out.
HDB Flats near MRT Stations: Key Insights to Prices of the ‘MRT Effect’
It’s no secret that being located next to an MRT station raises the value of homes. But how much of a boost do prices really get?
To answer this question, we looked at HDB resale flat prices in estates dominated by public housing and compared the prices of flats within walking distance (i.e. 500m or less) with those slightly further away (500m to 2km) from MRT stations.
The ‘MRT effect’ isn’t uniform throughout all stations. Data shows that the price and rental premium a flat enjoys when it is located near an MRT station can vary greatly between different flat types and neighbourhoods. Here are some of the key conclusions we have drawn:
1. Overall, HDB Flats near MRT stations Cost 8% More
According to HDB data from January 2021 to August 2021, flats located within 500m of an MRT station (excluding LRT) command a resale price premium of about 8% compared to HDB flats without a nearby MRT station.
The actual price premium varies depending on the neighbourhood. For example, Bukit Panjang and Geylang flats near an MRT command a higher premium of 40% and 30% respectively. Whereas for HDB flats in the central area, buyers prefer apartments further away from the MRT station, so much so that flats with no nearby MRT station cost 42% more than those near the transport mode.
On average, 4-room HDB flats enjoyed the highest premium if they were located within 500m of an MRT station, with resale prices being 10% higher than those of flats without a nearby MRT. Once again, Bukit Panjang and Geylang enjoyed the largest premium for this flat type.
2. Resale and Rental Prices of HDB Flats Near MRT Stations in Non-central Areas Enjoy a Higher Premium
Three out of five of the top five neighbourhoods in terms of resale price premium were located in the Outside Central Region (OCR), while there were no Core Central Region (CCR) neighbourhoods in the top five.
For rental prices, four out of five of the overall top five neighbourhoods were located in the OCR.
Bukit Panjang, in particular, which commanded the highest premiums overall for both resale prices and rent, appears to have benefited greatly from the opening of the Bukit Panjang MRT station on the Downtown Line, before which residents had to rely either on the LRT system or buses. The neighbourhood’s suburban location in the northwest of Singapore previously required a commute of 60 to 80 minutes in order to reach the CBD.
Conversely, properties in the CCR are already priced at a premium due to their central location and generally have a denser public transport network at their disposal. In addition, households tend to be more affluent and may have access to private transport. Hence, CCR property prices may not be as affected by the presence of nearby MRT stations.
3. Small Flats in the CCR Command a High MRT Rental Premium
When it comes to rental prices, 3-room flats HDB flats located in the CCR tend to enjoy the highest premiums.
Bukit Merah, located near the CBD on the city fringe, also commands a strong rental premium, coming in second for 3-room flat types and first for 4-room flat types, as well as second overall.
This could be attributed to the demand for such flats from expats working in the city centre who are willing and able to pay a premium for greater convenience and a shorter commute. Only smaller flat types seem to command such a high premium, indicating that tenants tend to be single or childless, and probably don’t mind co-living spaces.
‘MRT Effect’: Top 5 HDB Towns with the Greatest Resale Price Premiums
While HDB flats in all neighbourhoods enjoy a price premium if they are located near an MRT station, the amount of the premium is not uniform across neighbourhoods.
These are the top five neighbourhoods in terms of MRT resale premium across all flat types:
|Neighbourhoods||Average resale price premium for all flat types|
|Ang Mo Kio||22%|
According to flat-type, here are the neighbourhoods that enjoy the highest MRT resale price premiums:
‘MRT Effect’: Resale Price Premium for 3-room HDB Flats
|Neighbourhoods||Resale price premium for 3-room|
Browse all 3-room HDB flats for sale on PropertyGuru.
‘MRT Effect’: Resale Price Premium for 4-room HDB Flats
|Neighbourhoods||Resale price premium for 4-room|
Browse all 4-room HDB flats for sale on PropertyGuru.
‘MRT Effect’: Resale Price Premium for 5-room HDB Flats
|Neighbourhoods||Resale price premium for 5-room|
Browse all 5-room HDB flats for sale on PropertyGuru.
Resale Price Premium for HDB Executive Apartments
|Neighbourhoods||Resale price premium for executive apartments|
Browse all HDB executive apartments for sale on PropertyGuru.
‘MRT Effect’: Top 5 HDB Towns with the Greatest Rental Price Premiums
On average, HDB flats located within 500m of an MRT station were able to command a rental premium of 3% compared to flats located farther away. Price premium percentages for resale flats are typically twice or more than rental flats.
Perhaps this is because if you buy a home, you’re willing to fork out more for a place near an MRT station for convenience as this is a move that will improve your quality of life in the long term.
Of all the HDB towns, Bukit Panjang and Bukit Merah experienced the largest rental price premiums.
On average, the flat type commanding the highest rental premiums were 4-room and 5-room flats, at 6% to 7%. For 4-room and 5-room flats, the HDB towns enjoying the highest rental premium were Bukit Merah, Toa Payoh and Marine Parade.
Here are the top five neighbourhoods in terms of MRT rental premium across all flat types:
|Neighbourhoods||Average rental premium for all flat types|
According to flat-type, here are the neighbourhoods that enjoyed the highest MRT rental premiums:
‘MRT Effect’: Rental Price Premium for 3-room HDB Flats
|Neighbourhoods||Rental premium for 3-room|
Browse all 3-room HDB flats for rent on PropertyGuru.
‘MRT Effect’: Rental Price Premium for 4-room HDB Flats
|Neighbourhoods||Rental premium for 4-room|
Browse all 4-room HDB flats for rent on PropertyGuru.
‘MRT Effect’: Rental Price Premium for 5-room HDB Flats
|Neighbourhoods||Rental premium for 5-room|
Browse all 5-room HDB flats for rent on PropertyGuru.
‘MRT Effect’: Rental Price Premium for HDB Executive Apartments
|Neighbourhoods||Rental premium for executive apartments|
Browse all HDB executive apartments for rent on PropertyGuru.
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This article was written by Joanne Poh. A former real estate lawyer, she writes about property and personal finance and spends her free time compulsively learning languages and roller skating in carparks.
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