According to the latest data released by HDB, the price difference between younger and older flats in Toa Payoh has increased to 40 percent:
Above: Average prices of HDB flats (S$ per sq ft floor area) with remaining lease tenure of less than 60 years and more than 60 years in Toa Payoh. (Graphic: Author provided. Source: Data.gov, HDB. Prices are in S$.)
The steep decline in prices of older HDB flats more than 60 years old began in 2015 and continued till 2018.
You can see from the above chart that the price difference between more than and less than 60 years’ lease left 5-room flats in Toa Payoh is about 40 per cent ($420,000 (approximate) divided $680,000 (approximate)).
The average unit price of 3-room HDB flats with less than 60 years of lease transacted at 8.5 per cent lower in the first seven months of 2018, compared to the average unit price of an equivalent flat that transacted in 2017.
In contrast, prices of 3-room HDB flats with more than 60 years remaining on their leases rose by 3.6 per cent, over the same period of time.
As there are restrictions on CPF use and difficulties in securing a bank loan to purchase a HDB flat more than 60 years old, the pool of buyers for these aging flats is limited and prices are expected to continue dropping in the near future thereby accentuating the price difference between younger and older flats.
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