Resale of older HDB flats continue to be on the rise amid lingering concerns of decaying leases.
Older HDB flats that are 40 years and older continued to be in demand in Singapore, with a record 2,537 of such flats transacted in 2018, according to a study by property consultancy OrangeTee & Tie.
This comes amid “lingering concerns about depreciating value of older flats and some adverse impact from the latest cooling measures”.
In the first quarter of 2019, 628 older flats were sold, or constituting 13.9 percent of total resale transactions. The property consultancy noted that this is the highest percentage of older flats sold on record.
It added that sales of older flats could be observed across many towns, indicating that such flats are generally well-received island-wide.
OrangeTee & Tie attributed the higher sales of older flats to the narrowing of price expectation gap between buyers and sellers, given that prices of older flats has been easing over the years.
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The average price of older flats dropped by around six percent in Q1 2019 when compared to Q1 2017 and by about seven percent when compared to Q1 2018.
It could also simply be that more flats are growing older, resulting in more of such transactions in general, said OrangeTee & Tie.
The consultancy also observed that flats between 20 and 40 years old tended to be larger in size.
“For instance, of resale transactions that took place in Q1 2019, standard four-room flats that were less than 20 years old averaged at around 90 sq m (969 sq ft). Meanwhile, resale flats between 20 and 40 years old that were sold in the same period averaged at around 99 sq m (1,066 sq ft).
Similarly, standard five-room flats that were less than 20 years old and were sold within the same period averaged at around 119 sq m (1,281 sq ft), smaller than the average 124 sq m (1,335 sq ft) for flats between 20 and 40 years old.
As such, some buyers may consider older flats “to be of good value for money given their lower price tags,” said the consultancy.
Fiona Ho, Digital Content Manager at PropertyGuru, edited this story. To contact her about this or other stories, email firstname.lastname@example.org