Strong demand from young families pushed prices of 4-room HDB flats up by 35% over last 5 years, say analysts
More buyers are looking for homes that suit their growing families, while not bursting their budget, analysts told CNA.
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SINGAPORE: The prices of four-room flats in Singapore have risen by about 35 per cent over the last five years, climbing slightly faster than that of five-room flats.
Despite the climbing price range, four-room flats are still more sought-after than other Housing and Development Board (HDB) flat types, amid a booming property market.
This is because more buyers are looking for homes that suit their growing families, while not bursting their budget, analysts told CNA.
MORE INTEREST IN FOUR-ROOM FLATS
Production manager Kang Zhi Wei and his wife, for instance, recently bought a four-room flat in Bukit Batok for around S$600,000 (US$447,000).
Before that, they lived in a three-room flat in the same area but wanted more space to start a family. While looking at the options available, they found that a five-room flat is out of their financial reach.
“I did try to look for a five-room flat but it is definitely more expensive than my budget, so I can only look at four-room flats,” said Mr Kang, who considered various factors such as affordability and accessibility before purchasing his current flat.
He is among the many buyers looking for a four-room flat in the last few years.
“(Since) 2022, we have seen more and more four-room flats being sold quicker. As of last year, this number has gone up about 15 per cent as compared to 2022,” said real estate agent Tay Jooann, adding that prices are expected to continue to go up steadily.
“In essence, we did see more buyers coming through looking at four-room flats.”
HIGHER DEMAND FOR FOUR-ROOM HDBs
Over the last few years, four-room flats are selling faster than five-room flats, said real estate agents.
On average, they are getting up to seven inquiries a week for a four-room flat, but only about four per week for a five-room flat.
Four-room flats are still typically more affordable than the bigger flats, and appeal to younger families and some seniors who are looking to downsize to a smaller unit, said observers.
Per square foot prices of four- and five-room flats both spiked during the COVID-19 pandemic years, according to past transactions.
But those for four-room flats grew at a faster pace, and this trend continues to date.
“We see that the year-on-year increase in price for four-room flats is about 5.4 per cent, based on our computation using the HDB transactions,” said Dr Lee Nai Jia, head of real estate intelligence at PropertyGuru.
“For five-room flats, it is slightly lower at about 4.1 per cent.”
FIVE-ROOM PRICES A DETERRING FACTOR
Buyers are resisting the higher prices of five-room flats, said Dr Lee.
“The demand pool is getting smaller because we do see that some of the prices are kind of reaching above S$1 million in some instances,” he noted. “So that actually kind of pivots some buyers to the four-room flats.”
For instance, a five-room flat in Toa Payoh was sold for a record-breaking S$1.57 million this month.
Mr Lee Sze Teck, senior director of data analytics at Huttons Real Estate Group, also expects more families to continue opting for four-room flats.
“A family’s average size is about 3.1 now, and a four-room flat would suit the purpose of most families,” he said.
He added: “If a family doesn't really need a bigger size, then they would actually go for a four-room flat. Of course, a four-room flat is generally more affordable than a five-room flat.”
Analysts believe flats in central locations, as well as bigger flats in older estates, such as Queenstown, Toa Payoh, Kallang and Whampoa, may continue to attract a premium.
However, they also expect prices in less sought-after areas to stabilise moving forward.
