Why Some Central Area HDB Flats Struggle To Maintain Their Premium

Despite their prime location, some central area flats experience price drops due to lease decay, especially when their remaining lease falls below 80 to 89 years, leading buyers to factor in long-term value and financing limitations.

Lease decay causes the prices of four-room flats to remain stable until their remaining lease drops below 80 to 89 years. After that, prices tend to fall sharply, with older flats experiencing a median drop of around 43% from 2020 to 2025.

Prices are affected by remaining lease length and financing restrictions. As leases shorten, especially below 80 to 89 years, buyers become more sensitive, leading to steeper price declines even in desirable central locations.

From 2014 to 2019, prices held up well with mild discounts. From 2020 to 2025, prices declined sharply once lease decay set in, with older flats experiencing significant drops, reflecting increased buyer sensitivity to lease length.

No, even in central areas, flats can experience significant price drops due to lease decay, especially when remaining lease falls below critical thresholds, as buyers become more cautious about long-term value and financing limits.