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“Why Is My Spacious 5-Room HDB Flat Priced So Low?”

June 18, 20231 min read

“Buying a property is relatively easy when it comes to the down payment and monthly payments. But what really matters is whether you can sell it easily and at a good price in the future.” - Raymond Tiah

This is what a 5-room HDB owner asked me some time ago.

He was thinking of downgrading from his 5-room HDB flat to a 3 or 4-room resale flat.

But when I shared with him the value of his 34-year-old 5-room flat at Blk 357 Yishun, he was shocked.

The estimated value is only $498k in this UP market now.

property price

He cannot understand why a 4-room BTO flat at Blk 428B Yishun, can fetch almost the same price as his 5-room.

Moreover both the blocks are near each other.

You see, many HDB owners have the mentality that their flat prices will keep appreciating, as long they don’t sell it away.

But most of the owners forgot to take into consideration one IMPORTANT factor:

The remaining lease of the flat.

hdb depreciation

(Source: International Property Advisor, Soh Yun Yee & Straits Times Graphics)

Let's look at a graph above.

It shows that the value of HDB flats can start to drop after around 43 years, or when there are about 54 years left on the lease.

And over time, the value goes down until it reaches zero after 99 years.

That's why it's important to sell your HDB flat as soon as possible to get the best price.

If you hold onto it for too long, the value could decrease, and you might not get the price you want.

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