As we grow older, it seems like everything was better in the past, perhaps even our HDB flats. We examine how the age of our older HDB flats contribute to their value.
By Chang Hui Chew
Public housing has been part of Singapore’s post-independence history and has been tied inextricably to Singapore’s success. While homes in other countries might have histories spanning centuries, in relatively younger Singapore, when it comes to public housing, 30-year old flats are considered historic. This is because our flats have a limited 99-year lease, before it reverts back to the state.
50 years after independence, many of our oldest flats, built by the Housing Development Board’s (HDB) predecessor, the Singapore Improvement Trust, have already been demolished or are earmarked for redevelopment. In fact, several of Singapore’s oldest estates have already had blocks of flats demolished under the Selective Enbloc Redevelopment Scheme (SERS), their residents rehoused, and newer, taller flats erected where they once stood.
The unique features of older HDB flats, once considered so ubiquitous, are now rarities. Flat types like point blocks and maisonettes are no longer being built, and we look back and marvel at their large sizes and commanding views, even as we get used to smaller units and cookie cutter landscapes. Older flats also commonly had larger, comfortable eat-in kitchens, with the dining table located inside the kitchen. This allowed for interaction between families and the chefs of the home, for jokes over tastings, and stolen pinches of food fresh off the wok. Today, kitchens in Build-To-Order (BTO) flats have shrunk, and would be hard pressed to accommodate more than two people cooking, let alone a dining table, or familial interaction.
What this rarity, this nostalgia brings about to these older flats, is value. Conventionally, we’d expect the prices of short leases to decrease over time, as the lifespan of the property would decrease. However, this is not necessarily the case for older HDB flats (refer to Figure 1). Based on data compiled from HDB resales between 01 Jan 2012 to 01 Sep 2015, we see that the median per square foot prices of flats built in the 1960s and 70s are higher than those in the late 80s to mid-90s. Prices start to pick up again for flats completed in the noughties, as buyers pay for their relative newness, and for innovative new public housing concepts like Pinnacle@Duxton.
Comparing the decades
Figure 2 compares the median sale prices for HDB flats by period of completion over the past 10 quarters.
For the purpose of analysis, the years of completion were classified in three broad periods: the late 60s and early 70s; the 80s and 90s; and, 2000 to date.
Simply comparing these figures, homes built in the 60s and 70s command an average premium of about $74 per square foot over their counterparts built in the 80s and 90s, and about $27 per square foot over flats completed in 2000 to 2012.
At the same time, these 35-plus year old homes are slightly more price resilient than the others. Over the period of analysis, per square foot prices for homes in this bracket fell an average of 1.4 percent each quarter since Q2 2013 due to the implementation of cooling measures on the property market.
Conversely, homes built in the 80s and 90s saw an average incremental loss of 1.5 percent per quarter since Q3 2013, while homes completed in 2000 onwards saw an average loss of 1.9 percent per quarter. This is likely due to a combination of factors of which age of the unit is but one of several others, including size and location.
Peeling back the paint
If we were to zoom in to the centrally located HDB estates of Bukit Merah, Bukit Timah, Central, Queenstown and Toa Payoh, median prices for the older flats are not as clearly higher than in the overall trends reflected across the island. Location therefore plays a large part in their pricing. Flats from the 60s and 70s are only about 1.8 percent higher than flats built in the 80s and 90s.
However, if we were to look at specific examples, the story is slightly different. Tiong Bahru for instance, with some of the remaining SIT-built public housing left on the island, sees flats built in the 60s and 70s transacting at a median price of $666 psf, while those built in the 80s and 90s went for around $579 psf during the period of analysis.
Median prices in these central estates moved up rapidly in the 2000s, leading to a peak for HDB flats completed in 2011, when Duxton’s million dollar flats hit the market.
Aside from Duxton, some of the other newish central estates include former SERS estates, demolished, reconstructed, and now, re-sold. While these flats may no longer be historic, the area certainly is.
Looking forward to the past
Aside from buying a slice of local history with more character, older flats tend to be conveniently located nearer to MRT stations, and have many famous eating places around. However, for all their perks, there are also risks to owning an older flat.
For one, there is a possibility that HDB would requisition your flat under SERS. While HDB pays homeowners a market price that covers the price of a new BTO flat, feedback from the ground is that the flats offered are often smaller than the ones vacated. As such, if homeowners wanted to move to a flat with the equivalent size of their older units, they might still be required to top up money.
Living in an older building considered historical would not prevent homeowners from losing their flats to redevelopment in the future either. Rochor Centre was declared a protected landmark by the Urban Redevelopment Authority (URA) previously. However, in 2011, its protected landmark status did not prevent the building from being earmarked for demolition to make way for the construction of the new North-South Highway. Despite protests, the old SIT flats at Dakota Crescent are also slated for destruction for the construction of new BTOs.
Where value lies
Property, like fashion, relies on cycles. What was once considered old-school and boring, be it the “broken marble” style of flooring so often found in the older flats, or even the look of older flats itself, has found cachet with younger Singaporeans looking for character and history, even in the short time Singapore has been a Republic. If we can decide as a nation that preserving commonplace historical buildings has real worth, and are willing to give up a mentality of ‘development at all costs’, then we can be sure that the value of our older flats would be far more than their mere price.
Ask the Agent: Advice on living in historical estates
What are some of the areas expats looking to experience Singapore culture and history should look at? If you have a question for our network of agents, email News-and-Views@PropertyGuru.com.sg
Geylang Serai
Name: Jennifer Lim
Designation: Assoc Senior Team Director
Company: HSR International Realtors
Agent Profile
“Expatriates who wish to experience local culture may want to consider renting HDB flats in estates like Geylang Serai. It is one of the oldest Malay settlements in Singapore, well-known for its rich heritage. Besides enjoying the multi-cultural aspects of the neighbourhood and unlimited food options, recent developments (e.g. One KM Mall) have made living in the area more convenient.”
Toa Payoh
Name: Richard Ho
Designaion: Senior Sales Director
Company: DTZ Property Network
Agent Profile
“Singapore’s first prototype town centre, Toa Payoh is another ideal estate for expatriates who wish to experience the local culture. Aside from having a bustling town centre,it’s an iconic representation of Singapore’s heartland culture with unique features like the Toa Payoh Town Park Observation Tower, Dragon Playground and famous religious buildings.”
Queenstown
Name: Joey Ong
Designation: Marketing Director
Company: ERA Realty Network
Agent Profile
“Named after Queen Elizabeth II, Queenstown was the first of many HDB towns here. It offers a unique mix of old and new housing options – from black and white bungalows to HDB terrace houses and the 50-storey Sky Terrace project. It is an ideal estate for expatriates who want to experience the real Singapore, and offers access to many amenities and iconic religious landmarks.”
Tanjong Pagar
Name: Jessica Siow
Designation: Senior Associate Director
Company: PropNex Realty
Agent Profile
“Conveniently located in the central business district and within proximity to many arts and cultural attractions, Tanjong Pagar is also a preferred estate for expatriates who want to get close to nature. Situated within the area is the historic Tanjong Pagar Railway station, one of the connecting points to the green rail corridor.”
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