Ready To Make The Jump From HDB To Condo? This Guide Has All The Answers!
TLDR When upgrading from an HDB flat to a condo, consider factors like location proximity, amenities, and regulations. Decide whether...
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TLDR
The real estate market for HDB flats in Singapore has witnessed significant growth, with prices reaching new highs. The West Region saw the highest price increase, particularly in Bukit Batok, which experienced a remarkable surge. On the other hand, Kallang/Whampoa saw a decline due to increased BTO flat launches. Four-room flats remain popular, with Bukit Batok and Bukit Timah showing notable price growth. Clementi lagged behind due to its higher prices and older flats. Factors influencing buyers’ decisions include MOP completion, connectivity improvements, and BTO launches. Strategic real estate advice and understanding market trends are crucial for making informed decisions in the dynamic real estate landscape of Singapore.
The real estate market for HDB flats has been on a constant upward trajectory, with prices soaring to new heights. Last year, the overall average resale price for these flats hit a staggering $564 per square foot (psf), representing a 6% jump from the previous year’s $532 psf and an astounding 27.9% surge from 2014’s $441 psf.
Thanks to robust demand and a steady rise in household income, experts predict that HDB resale prices will continue to climb, albeit at a slower pace. In fact, 2021 saw a record-breaking 29,065 resale transactions, only to dip to 26,805 in 2022 before slightly decreasing to 25,990 last year. This is in stark contrast to the years between 2014 and 2020, where the number of transactions remained below the 24,000 mark.
But what’s fueling this fervent demand for HDB resale flats, you ask? Look no further than the two government policies that are giving the market a much-needed boost. The first is the 15-month wait period imposed on individuals who have previously owned private residential properties and are now seeking to purchase a resale HDB flat as their replacement home. For those who sold their private properties when the regulation was first introduced, the wait period has just come to an end. And for potential buyers eyeing the upcoming Prime and Plus categories for Build-to-Order (BTO) flats, the longer minimum occupation period (MOP) of 10 years may just push them towards the resale market. This is in contrast to resale flats, where the MOP remains at five years, making it a more attractive option for buyers looking for a quicker move-in option.
Through our thorough analysis in this article, we unravel the top and bottom performing HDB towns and regions in terms of resale price growth, empowering potential buyers with valuable insights to guide their decision-making process.
Through our thorough analysis in this article, we unravel the top and bottom performing HDB towns and regions in terms of resale price growth, empowering potential buyers with valuable insights to guide their decision-making process.
West Region Tops The Growth Chart
In the past year, the Central Region showed modest price growth of 5.2% year-on-year, while the West Region soared with the highest increase of 7.2%. Despite this, the Central Region claimed the crown for highest average price at $684 per square foot, leaving the West and North Regions trailing behind with average prices of $524 psf and $511 psf, respectively.
Bukit Batok: Sitting At The Top Of The Growth Chart
Last year, the West Region of Singapore saw an impressive surge in resale HDB flat prices, with the charming town of Bukit Batok leading the pack with a remarkable 14.1% year-on-year growth. Trailing behind in second and third place were the prestigious Central Region towns of Bukit Merah and Bukit Timah, boasting respective growth rates of 10.7% and 9%.
What’s truly remarkable is that Bukit Batok has consistently maintained its position among the top three HDB towns with the highest price growth over the years 2014, 2021, and 2022. This unwavering upward trend has undoubtedly propelled the West Region to claim its well-deserved spot at the top of the price growth chart.
The skyrocketing prices and demand for flats in Bukit Batok can be attributed to the town’s rising popularity. Last year, a record-breaking 1,415 HDB transactions were recorded, thanks to the buzz surrounding the neighboring new town of Tengah and the government’s ambitious plans to transform the nearby Jurong Lake District into a bustling regional center.
Furthermore, the numerous flats in Bukit Batok that reached their Minimum Occupation Period (MOP) last year also contributed to the surge in demand. With a longer remaining tenure, these newer flats are highly coveted by eager homebuyers, willing to pay a premium for the added convenience and comfort. In fact, a staggering 42,000 flats in Bukit Batok obtained their MOP in the previous year alone, adding to the town’s already alluring appeal.
Not only is Bukit Batok one of the smaller HDB towns, but it also boasts a unique charm that sets it apart from the rest. According to the latest HDB annual report, a mere 4.3% of the total HDB stock in Singapore can be found within its boundaries, with a total of 45,261 flats as of March 31, 2023.
But that’s not all – the allure of this town is set to skyrocket with the imminent improvements in connectivity. With only two MRT stations, Bukit Gombak and Bukit Batok, serving the entire town, it may seem modest in comparison to other bustling areas. However, with the upcoming Jurong Region Line, both stations will be a single stop away from an interchange station, providing easy access to other parts of Singapore.
To add to the convenience, Bukit Gombak MRT Station is just one stop away from Choa Chu Kang MRT Station, while Bukit Batok MRT Station is a mere hop away from Jurong East MRT Station. With such seamless connectivity, it’s no wonder that Bukit Batok is quickly becoming a sought-after destination for both residents and visitors alike.
Why Did Kallang/Whampoa Underperform?
Despite its popularity as a desirable HDB town, Kallang/Whampoa experienced a rare decline in its average price last year. The unexpected 1% year-on-year drop can be attributed to a weakening demand for resale flats within the town. This was evident in the decrease of sale volume, from 929 units in 2022 to just 790 units last year.
But what caused this decline in demand? It seems that the answer lies in the bumper crop of approximately 5,000 BTO flats launched in Kallang/Whampoa last year. With the option of purchasing a more affordable BTO flat, buyers without an immediate need for housing were drawn to this option instead of a resale flat. This trend is further reinforced by the fact that all BTO flats launched in the town were oversubscribed, a true testament to Kallang/Whampoa’s enduring popularity.
Meanwhile, in contrast to the bustling activity in Kallang/Whampoa, the neighboring town of Bukit Batok saw no new BTO launches last year. Could this be a contributing factor to its stagnant real estate market? Only time will tell.
A Deep Dive Into Four-Room Flats
HDB flats in Singapore come in a variety of sizes, but the four-room flats reign supreme as the ultimate choice for many homebuyers. They strike the perfect balance between spaciousness and affordability, making them the most sought-after flat type. In the bustling town of Bukit Batok, these four-room flats have been the talk of the town, with a whopping 13.5% year-on-year price growth. Unsurprisingly, this vibrant town has emerged as one of the top three areas with the highest price growth for all flat types. However, not all regions saw a rise in prices for these four-room abodes, as the West Region had two towns with the lowest price growth last year.
In the previous year, the four-room apartments nestled in Bukit Timah experienced a remarkable 13% increase in prices, marking it as the second-highest growth in the city-state. This can be accredited to its central location in a prime district, making it a desirable living space for many. However, the HDB’s latest annual report reveals that this well-positioned town only boasts a mere 2,554 apartments, out of which a meager 920 are four-room units, accounting for a mere 0.2% of all four-room flats in Singapore.
In stark contrast, the four-room abodes in Clementi lagged behind with a meager 1% price growth. Similarly, sluggish price growth was also observed in other areas, such as Choa Chu Kang (1.3%) and Kallang/Whampoa (1.5%).
As of March 31, 2023, the total number of four-room apartments in Clementi stood at 10,513, making up 2.4% of the total four-room flats in the country. Despite its popularity due to its abundant amenities and convenient connectivity through public transportation, the average age of 39 years for HDB flats in this town may have deterred some potential buyers. This is evident in the low sales figures, with only 227 and 221 four-room apartments being sold in 2022 and last year, respectively.
It is believed that those seeking newer living spaces may have applied for BTO apartments in neighboring towns instead. The adjacent town of Tengah, which witnessed the launch of several BTO projects last year, could have also drawn some buyers away from Clementi. Additionally, the buzz surrounding the transformative plans for Jurong Lake District may have swayed buyers towards Jurong East, a town in close proximity to Clementi.
Moreover, the average prices of four-room flats in Clementi are substantially higher than in Jurong East, with last year’s figures standing at $675 psf and $477 psf, respectively. This could have prompted budget-conscious buyers to opt for Jurong East instead of Clementi.
In a surprising turn of events, the modest town of Bukit Batok claimed the highest price growth, thanks to a multitude of apartments reaching the Minimum Occupation Period (MOP), imminent improvements in connectivity, and an increase in buzz surrounding the area.
On the other hand, the HDB flats in Kallang/Whampoa are expected to offer weaker capital appreciation. This can be attributed to the numerous BTO apartments in the area, which may have diverted potential buyers away from the resale market. Similarly, demand and price growth were also lackluster for four-room apartments in Clementi, with buyers possibly being drawn towards the more affordable BTO apartments in nearby Tengah and the promising plans for the nearby Jurong Lake District.
Should You Buy, Sell or Wait?
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
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