Price gap between 4- and 5-room flats in Singapore down to 15% in Q3

This is the narrowest price differential on record.

The price disparity between 4- and 5-room flats has been rapidly diminishing. During the pre-pandemic years, the average price of 5-room flats stood at S$538,133 in Q1 2018, representing a 22.6% premium over 4-room flats, priced at S$438,892. 

Subsequent to the onset of the pandemic, this margin contracted to 20.2% in Q3 2020 and further reduced to 16.9% in Q3 2023. In the third quarter of this year, the price differential narrowed to 15%, which is the narrowest price gap on record, smaller than the previous low of 16.7% in Q4 2023. 

The closing price gap could be attributed to a faster pace of price growth for 4-room flats. Prices of 4-room flats jumped by 43.3% from S$445,472 in Q3 2020 to S$638,566 in Q3 2024. Comparatively, the price of 5-room flats rose at a slower pace of 37.1% from S$535,462 to S$734,126 over the same period. 

Compared to a year ago, prices of 4-room flats rose by 8.2% from S$590,299 in Q3 2023 from Q3 2024, whereas 5-room flats climbed by 6.4% from S$689,904 over the same period.

Moreover, there has been a noticeable increase in 4-room flats commanding higher transacted prices. Surprisingly, 687 resale flats were transacted for at least $900,000 in the first three quarters of 2024, surpassing the number of 5-room flats sold at this price tag, which stood at 591 units, and executive flats at 477 units (Chart 3). 

Only 44 4-room flats were sold at this price point in the full year of pre-pandemic 2019, as opposed to 153 5-room flats and 45 executive flats.

The price appreciation observed in 4-room flats can also be attributed to an increasing number of units reaching MOP, and newer flats tend to command higher prices. In contrast, 5-room MOP flats have declined since fewer large flats have been launched for sale over the past decade.