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.

We’ll look at two periods separately: before the Covid-19 pandemic (2014–2019) and after (2020–2025), to minimise distortions from the effects of the pandemic.

One final note: In some very old towns, lease decay started so long ago that the affected flats are now too old to even see many transactions. Because of that, we can’t clearly see how prices continue to fall there today. Where you see this, it reflects the limits of available data rather than an absence of evidence of lease decay.

Breaking down lease decay by estate and flat type

As before, we’ll look at individual flat types and HDB towns, since they’re not all affected in the same way.

First, we’ll compare the rate of price fall after lease decay starts in each estate. We’ll do this by comparing estates against one another and grouping them from mild to severe. This makes it easier to see which towns age gently, in terms of price declines, and which ones take much harder hits in terms of capital values.

Next, we sort each estate by how lease decay behaves over time. This isn’t just about how big the price drop is today (although that’s part of it). It’s also whether prices fall gradually, decrease suddenly, or are just already so old that we can’t see the effect anymore.

How to read the following tables

Severity (%)
This is how much cheaper flats usually become after lease decay kicks in, compared to prices right before that. 

Negative severity (%)
If this happens, it means prices didn’t fall after lease decay started; instead, they actually went up.

The following are the behaviour labels:

Gradual: This means prices gradually go down as flats age. Losses from this pattern tend to be slow and predictable, which is a good thing. 

Late but steep: Prices stay strong for a long time, then fall off the proverbial cliff once lease decay kicks in. There is a big downside risk if you hold these flats past that inflection point. 

Early and persistent: Lease decay starts early and keeps dragging prices down over many years. Less in the way of shocks and nasty surprises, but also weaker long-term performance.

Aged-out cohort: These towns are so old, the lease decay set in long ago, and some of the oldest flats rarely ever sell. There’s not much we can discern from this now, since the damage is already done. 

Inconsistent / rebound: Price drops linked to lease decay aren’t consistent. Sometimes, recent years can look better than earlier ones. These are hard to judge and predict, and timing (when you buy or sell) might matter more than the lease decay alone.

Lease Decay Behaviour by Town (Three-Room Flats)

In mature central towns such as Queenstown, Bukit Merah, Toa Payoh, and Kallang/Whampoa, prices fall much more sharply after the inflection point. In contrast, towns like Yishun, Hougang, and Jurong East are more forgiving for older three-room flats, as resale prices tend to soften gradually over time, based on the data.