Old is gold: Singapore HDBs older than 10 years drive price growth in Q1

Flats between 10 and 20 years old recorded the highest price growth of 11.1%.

Vaccine optimism and an anticipated global economic upswing stoked a frenzy of property buying activities around the world. According to OrangeTee, the improving global economic outlook lifted consumers’ confidence and the market sentiment for the HDB resale market. 

Demand for HDB resale flats started gaining traction from the second half of last year and resale prices have been inching higher in recent months. 

Here’s more from OrangeTee:

Due to the strong demand for housing, property prices have been escalating in many advanced cities. HDB resale prices rose higher last quarter in tandem with the rising home values observed globally. The supply and demand imbalance of flats has also caused prices of HDB resale flats to climb in many locations. 

According to the HDB public housing data for Q1 2021, prices of HDB resale flats rose a fourth consecutive quarter by 3.0 per cent quarter-on-quarter (q-o-q). Year-on-year (y-o-y), prices rose 8.1 per cent. HDB resale prices are now inching closer to the peak price in Q2 2013. Last quarter, prices were just 4.8 per cent lower than the highest price recorded in Q2 2013. 

According to the HDB resale data from data.gov.sg, average price of resale flats rose q-o-q in 22 of the 26 towns in Q1 2021. For instance, 244 flats were transacted in Toa Payoh last quarter and the average price rose 17 per cent. Similarly, prices rose 11.2 per cent q-o-q in Bukit Timah (28 units) and 8.0 per cent in Bedok (402 units). 

A drill down into the HDB data from data.gov.sg reveals that prices rose across all age range with the highest price growth recorded for flats between 10 and less than 20 years old (11.1 per cent) and between 30 and less than 40 years old (3.5 per cent). Therefore, newer flats are not the key driver behind the recent price surge. In fact, prices of younger flats below ten years old rose marginally by 0.1 per cent last quarter, indicating a price resistance for younger flats possibly because prices of younger flats have run up quite significantly over the past year (9.8 per cent y-o-y increase in Q1 2021).