We Analysed HDB Price Growth — Here’s When Lease Decay Actually Hits (By Estate)

In our previous analysis of HDB flats and lease decay, we found that some flats are unusually resistant to the erosion of price growth as it ages. We also explained that lease decay is not a simple linear process, where price movements move down predictably with age.

Rather, the impact of lease decay on resale HDB price growth functions more like a threshold: prices can seem to steadily increase and ignore the worst impact of lease decay, right up until the property hits a certain point; then price growth tends to fall off the proverbial cliff.

So the real risk, if you own an older flat and want to sell, is less about the progressive ageing of the flat. Instead, it’s being mindful about the exact threshold at which most buyers decide that age is a major factor in their price considerations.

In this article, we try to determine when that tipping point is. We want to know how many years of remaining lease a flat must have before the price growth starts flattening or failing. Here’s what we found out:

How we’re going to do this (our methodology)

We’re going to analyse HDB resale transactions by town and flat type, focusing on how prices vary with remaining lease, rather than simply by age or transaction year.

For each transaction, we’ll calculate the remaining lease at the point of sale like so: Remaining lease = 99 − (year of transaction − lease start year)

We’ll  then group transactions into the following “remaining-lease bands”:

• 90–99 (years left)
• 80–89 
• 70–79 
• 60–69 
• 50–59 
• 40–49 
• 30–39 

So our unit of analysis is each combination of (1) HDB town, (2) flat type, and (3) remaining-lease band.

We also need to isolate the effect of lease age from broader market cycles. Otherwise, the prices could simply reflect a boom or bear market, rather than how buyers are actually pricing in the lease age.

As such, our analysis will normalise prices within each year. For each town and flat type, we’ll divide the median price in each lease band by the overall median price (for that same town / flat type that year)

This produces an index where:

• 1.00 represents the typical price level for that town and flat type in that year
  
• values above 1.00 indicate a premium
  
• values below 1.00 indicate a discount

It makes the most sense to focus on the period from 2014 to 2025. This spans the post-2013 down cycle in the property market and the uptick in market sentiment during the post-Covid-19 pandemic boom. These parameters help ensure that the observed patterns are not driven by a single market event.

We’ll restrict the analysis to town and flat-type combinations that meet these conditions, to ensure there is enough variation across lease stages. We need to do this because, if a town only has very new flats, or only a small handful of older ones, prices will cluster within a very narrow range. In that situation, it’s no longer possible to identify where prices weaken, so it’s not useful to us in this case.

As a result, we include only town and flat-type combinations where:

• at least four remaining-lease bands are observed
  
• at least eight usable years of data are available

For each qualifying town and flat type, we’ll examine how the indexed price changes as the remaining lease declines.

What we want to do, from all this, is to identify the inflection point.

This is the point where the amount of remaining years in the lease starts to matter in a meaningful way. Simply put, before this point, price growth tends to hold up despite lease decay. But after this threshold, buyers typically want sharper discounts and price growth plateaus or weakens significantly.

Knowing where an inflection point occurs is more useful to most HDB buyers than simply knowing that lease decay exists, as a general theory.

All our comparisons take place within each town and flat type, rather than across estates, so the results reflect how property age and lease interact relative to location.

Note that we don’t identify inflection points from individual years. Instead, we pool data across a number of years, specifically 2014 to 2025. Then we examine how prices vary by remaining the average remaining lease. This ensures the inflection point reflects how the market usually behaves, not what happened in any one specific year.

Inflection patterns by flat type and HDB town

How to read these charts:

Each line shows how prices change across different remaining-lease bands, within the given town and flat type.

A value of 1 represents the town’s typical price level for that flat type in that year. Values above 1 indicate a premium (priced higher than the town’s average), while values below 1 indicate a discount (priced lower than the town’s average)

3-room flats

For 3-room flats, the inflection point in most towns is when the remaining lease falls below the 80- to 89-year band, but there are variations in how prices move beyond this point.