The HDB flat is arguably the most popular type of real estate in Singapore. About eight in every ten persons residing in Singapore live in HDB flats.
The prices of HDB resale flats have increased steadily over the past two years. In 2021, the HDB resale price index jumped 12.7% year-on-year, which was the highest annual rate of growth in the past decade. In the past two years since the start of the Covid-19 pandemic, the prices of public housing in Singapore have grown by 18.4%.
Cause of Rapid Price Growth
The rapid rate of price growth of HDB resale flats was due to the combination of a few factors. The supply chain disruption and lockdowns due to the pandemic had led to shortages of materials and manpower in the local construction industry. As a result, the construction of HDB flats was disrupted and delayed.
Before the pandemic, most applicants of HDB Build-to-order (BTO) flats would expect to receive the keys to their new flats about three to four years after they applied for their flats. The disruption in the construction industry extended the wait for BTO flats beyond four to five years.
Some HDB homebuyers who could not afford the long wait chose to buy completed HDB flats from the resale market. This led to a sharp increase in the demand for resale flats. About 31,000 HDB resale flats exchanged hands last year, which was 25.3% more than the number of resale flats transacted in 2020. As the stock of available resale HDB flats is inelastic in the short term, prices increased as a result.
Despite the rising prices in the public housing market, is it still possible to find affordable HDB flats? The objective of this report is to examine where the cheapest HDB flats are located.
This study will identify the HDB towns with the lowest median transacted prices of four commonly traded HDB flat types. The median transacted prices are based on the available data for the period from July 2021 to June 2022.
For each type of HDB flats examined in this study, the ten towns with the lowest median transacted prices of each type of flats will be identified and ranked in ascending order.
Although there are seven types of HDB flats based on their sizes, this study will examine the prices of four of the most commonly traded HDB flats, namely the 3-, 4-, 5-room and Executive flats. The total number of 1-room, 2-room flats and Studio Apartments only made up less than 4% of the entire population of resale flats island-wide. There is insufficient transaction data of these three types of smaller flats for this study. By contrast, the number of 4-room flats alone is more than ten times the combined number of these three types of flats.
HDB Towns With Cheapest 3-room Flats
Based on the median transacted resale prices of HDB flats, the top five towns with the cheapest 3-room HDB resale flats in the time period of this study were Geylang, Toa Payoh, Jurong West, Woodlands and Bedok. The ranking of the towns with the cheapest 3-room flats based on the median transacted prices in ascending order is shown in Table 1.
The lowest median prices of resale for 3-room flats was in Geylang at $305,000, while the median price of the seventh to tenth towns with the lowest prices of such flats ranged from $345,000 to $348,000.
Four of the ten towns with the lowest median prices of 3-room flats were HDB mature estates. They were Geylang, Toa Payoh, Bedok and Ang Mo Kio. It may seem unusual for these popular mature estates to offer some of the cheapest HDB 3-room flats in Singapore. Toa Payoh, Ang Mo Kio and Geylang are mature estates located near the city area. Toa Payoh and Any Mo Kio are centrally located, while Geylang is only a 10-minute drive to the CBD.
A key reason for the relatively cheap 3-room HDB resale flats in these four mature towns was the age of these flats. The median age of the 3-room flats in these mature towns were older than the median age of the 3-room flats in the other six non-mature towns in the list.
The median year of lease commencement of the transacted 3-room flats in these four mature estates were before 1981, while the median year of commencement of the lease in the non-mature towns started after 1981.
Table 1: Ranking of HDB Towns With the Cheapest Median Prices of 3-Room HDB Flats
Source: HDB, ERA Research, and Consultancy
HDB Towns With Cheapest 4-room Flats
The HDB town with the lowest median price of 4-room HDB flats was Woodlands at $435,944. It was followed by Sembawang, Jurong West, Yishun, and Jurong East in the second to fifth position respectively, based on the ranking of the towns with the cheapest median prices of 4-room flats in ascending order.
Among the ten towns with the cheapest median transacted prices of 4-room flats, Bedok was the only mature HDB estate. Unsurprisingly, the median age of the 4-room flats in Bedok was relatively older than the others. The median price of the seventh to tenth towns with the lowest prices of such flats ranged from $460,000 to $475,000.
The median price of 4-room HDB flats island-wide was $490,000. The median prices of 4-room flats in these ten towns were still lower than the island-wide median price for such flats, illustrating the affordability of such flats in these towns.
Table 2: Ranking of HDB Towns With the Cheapest Median Prices of 4-Room HDB Flats
HDB Towns With Cheapest 5-room Flats
Sembawang was ranked first among the HDB towns with the most affordable 5-room flats at $510,000, which was 13.6% cheaper than the island-wide median price of $590,000 for such flats.
Among the ten HDB towns with the lowest median prices for 5-room flats, Pasir Ris was the only mature HDB town and it is ranked in the eighth position.
The median prices of the 5-room flats in the top eight towns were still cheaper than the islandwide median price of this flat type, which stood at $590,000. This indicates that homebuyers have more than 50% chance of finding 5-room flats in these eight towns that are cheaper than the islandwide median price.
At the median price of $600,000, Punggol was ranked last among the ten most affordable HDB towns. This is because generally, the 5-room flats in Punggol are the newest among similar flats in the list of the ten towns.
Table 3: Ranking of HDB Towns With the Cheapest Median Prices of 5-Room HDB Flats
HDB Towns With Cheapest Executive Flats
Executive flats are the largest type of HDB flats and hence, could be counted as the most expensive type of public housing flats. Currently, there are about 65,000 such flats, making up 6% of the total population of HDB flats in Singapore.
Over time, Executive flats will gradually make up a smaller proportion of the total stock of flats island-wide. Such flats are the rarest among the four types of flats in this report. They are a favourite among homebuyers who prefer spacious homes.
The town with the lowest median price of transacted Executive flats was Sembawang at $589,000. Ranking in the second to fifth position for the cheapest median prices of Executive flats were Jurong West, Punggol, Sengkang and Choa Chu Kang respectively.
The median transacted price of Executive flats in Singapore was $718,000 in the last twelve months. Attesting to the high prices of Executive flats, the median prices of such flats in towns that were ranked in the ninth position onwards were higher than the island-wide median price of this flat type, illustrating such flats are not the most affordable public housing in Singapore.
Table 4: Ranking of HDB Towns With the Cheapest Median Prices of Executive Flats
Source: HDB, ERA Research and Consultancy
HDB Towns With Cheaper Flats
An analysis of the data reveals some interesting results. Table 5 shows the ranking of each type of flats in the respective HDB towns.
If the HDB town is among the ten towns with the lowest median prices of a particular flat type, it's ranking for that flat type will be displayed in Table 5.
First, the most affordable bigger flats, such as the 4-room, 5-room and Executive flats could be found in Sembawang. This town in the north region occupied the first position in the ranking of lowest median prices for 5-room and Executive flats, and the second position for 4-room flats. Therefore, homebuyers who are looking for affordable bigger flats should explore the Sembawang resale market.
Second, three towns appeared in the top 10 ranking for the lowest median transacted prices for all four types of flats. They were Jurong West, Woodlands and Yishun. This shows that homebuyers could have a better chance to find affordable resale flats of different sizes in these three towns.
Third, among the three towns mentioned above, Jurong West had the most affordable 12 flats of different sizes as it was ranked within the top three lowest median prices for all the four flat types. This means that house hunters could have even more opportunities to buy the cheapest HDB flats of various sizes in Jurong West than in the other towns.
Fourth, Ang Mo Kio only appeared once in the top ten list which the median price of the 3-room flats ranked in the seventh position. This means that other than the 3-room flats in Ang Mo Kio, all the other types of flats are not the most affordable.
Ang Mo Kio and Bedok had relatively low median prices for 3- and 4-room flats, while Pasir Ris were ranked in the eighth and ninth places for 5-room and Executive flats respective.
These three mature towns were not ranked within the top 5 cheapest median prices for all four flat types, illustrating that they are not the towns with the most affordable flats in Singapore. However, homebuyers who are hunting for affordable HDB flats in mature estates could search the resale market in these three towns.
Table 5: Ranking of HDB Towns According to Ascending Median Prices of Flat Types
Ang Mo Kio
Choa Chu Kang
Although HDB flats are the most affordable housing in Singapore, the prices of such real estate can differ widely depending on location, age, and sizes of the flats. Typically, the cheaper flats could be found in the non-mature estates located further away from the city centre. However, it is still possible to find affordable flats in the centrally located mature estates if the buyer does not mind that such flats are usually older.