Over the past 20 years, prices of resale HDB flats increased by 0.82% quarter-on-quarter on average, or an accumulated growth of almost 70%.

Aside from providing a roof over people’s heads, housing is also considered as one of the biggest assets for over 90% of Singaporean households.

In an article posted in Channel News Asia (CNA), Professor Sing Tien Foo, the Director at the Institute of Real Estate and Urban Studies (IREUS) and Head of the Department of Real Estate at the National University of Singapore and IREUS Deputy Director Dr Lee Nai Jia noted that Singapore housing has significantly appreciated over the last 20 years, on the back of steady job growths and sound macro-economic management over the decades.

Resold Housing and Development Board (HDB) flats, for instance, have created significant wealth for households over the past two decades.

This comes as prices of resale HDB flats grew at an average of 0.82% per quarter or an accumulated growth of nearly 70% during this period. Price indices for private landed and non-landed residential property also rose by 71.5% and 58%, respectively.

With this, HDB flats remains attractive as an investment for Singaporeans even as the government imposed restrictive rules for homes under the new prime location public housing (PLH) model.

These include a 6% subsidy clawback to mitigate the risk of excessive windfalls from the resale of the flat and a longer minimum occupation period (MOP) of 10 years. Owners of such flats are also barred from renting their entire homes at any point and could only sell to “a strict pool of eligible buyers”.

“With all these rules, do people still want to buy these HDB flats?” asked Sing and Lee.

“The answer is pretty resounding. The first batch of Build-To-Order (BTO) homes in Rochor has seen healthy demand, at 10.3 times over-subscription.”

They noted that the PLH model follows HDB’s spirit in keeping housing affordable and inclusive.

Given the high land costs at prime locations, many Singapore families “would not otherwise have a chance to live in those places if the building of HDB flats were left solely to the free market,” they said.

“More ordinary Singaporeans would also miss the chance of long-term economic gains of a home with an attractive location.”

Notably, prices of homes at more centrally located neighbourhoods within the Central Area, Whampoa, Queenstown and Bukit Merah have appreciated faster compared to farther-flung neighbourhoods like Pasir Ris, Yishun, Jurong or Hougang.

“Analysing resales of Pinnacle@Duxton homes, the only batch of BTO flats built in the Central Area since 2004, buyers who bought from HDB in 2004 (at $392,100 and $451,500 for four- and five-rooms) and resold in 2021 (at the average resale transacted prices of $851,868 and 1,001,289) saw their asset appreciate at 7.03% each year over the 17 years – a pace that outstripped the STI Index’s 2.4% for the same period.”

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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg.