For an asset class that is meant to be affordable for the general masses, it’s understandable why HDB flats transacting for a million dollars and above often make the headlines. The above-average price tag is often justified because of their large unit size (i.e., jumbo flats of sizes above 1,500 sq feet) or being located in prime locations next to amenities.
Despite their uniqueness, in some cases, like in the recent transaction where a 4-room resale flat at Tiong Bahru sold for a record $1.5 million, we can’t help but wonder if the purchase was indeed good value for money.
This made us ponder the best value-for-money flat types in each estate. Typically, for a BTO flat, there’s a price difference of about $120,000 for 3- and 4-room flats and about $150,000 for 4- and 5-room flats. Therefore, it stands to reason that if we can pay a smaller difference for a bigger flat, we could be getting better value, with all else remaining the same.
Best HDB Flat Type(s) For Each Estate
To determine the best value HDB flat type for each estate, we compared based on the HDB median resale transacted prices.
The flat types that are “bolded” in Table 1 below represent the best value for money in each estate.
Disclaimers:
- We have excluded 2-room and Executive/Jumbo flat types and the Marine Parade estate from our list due to insufficient published transacted prices.
- There is no price comparison between 3- and 4-room flat types in Bishan and Pasir Ris as well as between 4- and 5-room flat types in Central, Geylang, Queenstown, and Serangoon due to a lack of published transacted prices.
| Towns | 3-Room | 4-Room | 5-Room |
| Ang Mo Kio | $380,000 | $605,900 (+$225,900) |
$785,000 (+$179,100) |
| Bedok | $365,000 | $486,000 (+$121,00) |
$660,000 (+$174,00) |
| Bishan | – | $677,500 | $900,000 (+$222,500) |
| Bukit Batok | $370,000 | $597,500 (+$227,500) |
$771,500 (+$174,000) |
| Bukit Merah | $396,000 | $813,900 (+$420,300) |
$870,000 (+$56,100) |
| Bukit Panjang | $380,000 | $492,500 (+$112,500) |
$620,000 (+$127,500) |
| Central | $450,000 | $728,000 (+$278,000) |
– |
| Choa Chu Kang | $415,000 | $490,000 (+$75,000) |
$580,000 (+$90,000) |
| Clementi | $418,000 | $648,000 (+$230,000) |
$746,500 (+$98,500) |
| Geylang | $344,400 | $549,000 (+$204,600) |
– |
| Hougang | $385,000 | $518,000 (+$133,000) |
$665,900 (+$147,900) |
| Jurong East | $369,000 | $470,000 (+$101,000) |
$650,000 (+$180,000) |
| Jurong West | $339,000 | $478,000 (+$139,000) |
$578,900 (+$100,900) |
| Kallang/Whampoa | $380,000 | $735,000 (+$355,000) |
$805,000 (+$70,000) |
| Pasir Ris | – | $535,000 | $643,000 (+$108,000) |
| Punggol | $450,000 | $582,900 (+$87,900) |
$666,000 (+$83,100) |
| Queenstown | $403,200 | $864,000 (+$460,800) |
– |
| Sembawang | $435,800 | $524,000 (+$88,200) |
$578,000 (+$54,000) |
| Sengkang | $437,500 | $560,000 (+$122,500) |
$600,000 (+$40,000) |
| Serangoon | $395,000 | $577,000 (+$182,000) |
– |
| Tampines | $414,400 | $555,000 (+$140,600) |
$666,500 (+$111,500) |
| Toa Payoh | $385,000 | $779,000 (+$394,000) |
$897,500 (+$118,500) |
| Woodlands | $395,000 | $485,000 (+$90,000) |
$583,000 (+$98,000) |
| Yishun | $380,000 | $480,000 (+$100,000) |
$630,000 (+$150,000) |
| Average Price Difference: $215,926 | Average Price Difference: $116,295 |
Table 1 – Source: Q12023 HDB Median Resale Prices
Observations:
- The average price difference between 3- and 4-room flats is $215,926. There are 8 estates with resale prices of 4-room flats above the average price difference.
- The three estates with the highest price difference between 3- and 4-room flats are: Queenstown, Bukit Merah, and Toa Payoh.
- Similarly, the three estates with the lowest price difference between 3- and 4-room flats are: Choa Chu Kang, Punggol, and Sengkang.
- The average price difference between 4- and 5-room flats is $116,295. There are 9 estates with resale prices of 5-room flats above the average price difference.
- The three estates with the highest price difference between 4- and 5-room flats are: Bishan, Jurong East, and Ang Mo Kio.
- Similarly, the three estates with the lowest price difference between 4- and 5-room flats are: Sengkang, Sembawang, and Bukit Merah.
- Among all the estates, the price difference for 4- and 5-room flats in Sembawang is smaller than the average price difference for both types, respectively.
Though the median prices give us a first-level understanding of which flat types offer the best value, in reality, the transacted prices could vary greatly depending on the location of the flat within the estate, its size, and its age, among others.
To examine how some of these factors may impact our earlier findings, we deep dive by focusing on two factors that may affect prices of the different HDB resale flat types at Bukit Merah estate.
Read Also: HDB Price Guide: 5 Cheapest HDB Estates For 2023
Price Difference Based On Proximity To Amenities
We first compare the price differences for the different flat types in Bukit Merah based on location or their proximity to amenities like the Redhill MRT station. Naturally, the closer the flat is to key amenities, the more desirable it will be and will command a higher premium.
We have compared the transacted prices as close as possible to the same floor level across the different flat types at each location. Based on our findings, the price difference between a 3- and 4-room flat is about $300,000. On the other hand, the price difference for a 4-and-5-room flat is about $48,000 to $200,000.
| Bukit Merah – Location | |||
| 3-Room | 4-Room | 5-Room | |
| Redhill Close (High Floor) |
– | $920,000 – $955,000 | $988,000 – $1,003,800 (+$48,800 – $68,000) |
| Lengkok Bahru (Mid Floor) |
– | $628,000 | $720,000 (+$92,000) |
| Kim Tian Road (Low Floor) |
$525,000 – $600,000 | $835,000 – $936,000 (+$300,000 – $336,000) |
$1,030,000 – $1,050,000 (+$114,000 –$195,000) |
Table 2: Price Difference Based on Location
The findings show that the price difference between the 4- and 5-room flat types at Redhill Close is smaller than the farther away location at Kim Tian Road. It could be that the popularity of the former location has made 4-room flat types more competitive.
Considering the price difference, it stands to reason that opting for the 5-room flat at Redhill Close would be of better value than at the other two locations. We would not only pay a smaller price difference for an additional room, but we would also get to stay closer to key amenities.
Price Difference Based On Age Of Flat
Another factor that could affect property prices is the age or balance of the HDB flat’s lease. Typically, the longer the lease balance, the higher the price of the flat compared to a flat with a short lease balance.
Again, we compared the price differences of the three flat types as closely as possible to the same floor level across four age bands within the Bukit Merah estate.
| Bukit Merah – Age | |||
| Lease Commence – Remaining lease (Years) / (Location) | 3-Room | 4-Room | 5-Room |
| 2019 – 95 years (City Vue@Henderson) |
$748,000 | $1,040,000 (+$292,000) |
– |
| 2003 – 79 years (Jalan Membina) |
– | $800,000 | $960,000 (+$160,000) |
| 1984/85 – 61 years (Bukit Purmei) |
$455,000 – $475,000 | $650,000 – $690,000 (+$195,000 – $215,000) |
$1,000,000 (+$310,000 – $350,000) |
| 1979 – 54 years (Lengkok Bahru/Hoy Fatt Road) |
$322,000 | $480,000 (+$158,000) |
– |
Table 3: Price Difference Based on Age
The above findings corroborate our general understanding of price differences based on the lease balance. For example, a 3-room HDB flat at City Vue@Henderson with 95 years of lease balance commands a higher selling price of between $293,000 and $426,000 compared to flats at Bukit Purmei and Lengkok Bahru with lease balances of 61 and 54 years, respectively.
However, this difference in premium between younger and older flats may not always hold true. For instance, a 5-room HDB flat at Bukit Purmei with a shorter 61-year lease transacted for $1,000,000, which is similar to a flat at Jalan Membina with a lease balance of 79 years or 18 years more. Based on this information, we could say that the flat at Jalan Membina is of better value due to a longer lease despite a similar price tag.
Read Also: Why HDB Resale Flats Can Be Affordable If We Choose To Purchase Within Our Means
How To Use This Information To Select The Best Value HDB Flat?
We may all want to get the best value for our money, especially when buying a big-ticket item like our homes. In this article, we have presented a simple way to identify the best value flats in each estate.
Even though there may be a variety of factors influencing our decision when buying our homes, we could use the data in Table 1 as a starting point in deciding the type of flat to buy. For instance, if we were initially looking to buy a 4-room flat in Bukit Merah, we could perhaps consider a 5-room flat, provided we have the budget for it. Based on the information, a 5-room flat may present better value for our money, as we could get more space for a lower price.
Next, we could do more analysis on the pricing of 5-room flats in Bukit Merah based on other factors, such as proximity to the location and the age of the flat. Based on our earlier findings, we found that the project sited next to the Redhill MRT station (Redhill Close) transacted at a similar price range as the location (Kim Tian Road) that was farther away. If we value proximity to amenities and transport, then the Redhill Close project is better.
Additionally, when looking at the age of the flats, we also observed that the 5-room flats at Jalan Membina, which have a longer 79-year lease balance, transacted at similar prices as the shorter lease balance 5-room flats at Bukit Purmei. This allows us to identify Jalan Membina as being of better value as we get a longer lease for the same price.
These are preliminary steps that we can take to identify the best value-for-money flats. However, that is not to say there can’t also be other factors that a buyer may perceive to be of higher importance and value when purchasing a particular flat.
Read Also: Is Bukit Merah The Most Overrated Or Underrated Estate In Singapore?
The post Which Is The Best Value For Money Resale HDB Flat Type In Each Estate? appeared first on DollarsAndSense.sg.
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