We Compared Lease Decay Across HDB Towns — The Differences Are Significant

In an earlier article in this HDB series, we addressed the issue of when, during a property’s age, lease decay begins to negatively impact its resale price. We previously covered factors like spotting the inflection point, but there is more we can unpack. For starters, knowing the inflection point might not be very actionable for most buyers and sellers – for example, if you’re already past that point, then the more practical questions are:

• How much more slowly will the unit’s price appreciate (or maybe even depreciate)
• What’s the right price to pay for a unit past that point?
• And, does your asking price make sense when your flat is older?

Based on the data we’ve compiled, the resale flat market’s response to ageing flats is far from uniform. In some places, resale prices move more predictably, adjusting as the remaining lease shortens. But in other towns and estates, widening price gaps can happen suddenly and very sharply.

Let’s take a look at some HDB estates where lease decay has had the biggest impact on resale prices, and where older flats tend to exhibit a higher downside risk. 

Our methodology

This analysis follows directly from our previous article, which identified the point at which lease decay starts to set in.

For each town and flat type, we treat prices at the point where lease decay first starts to matter as the benchmark. Then, we’ll examine how much cheaper older flats are compared to those at that point. This lets us see how steep the price drop becomes, as remaining leases shorten.