ANALYSIS: HDB towns with the highest price growth

In August last year, the loan-to-value ratio for mortgage loans from HDB was reduced by five percentage points to 75%. However, the impact of this change was mitigated by a decline in interest rates following several rounds of rate cuts by the US Federal Reserve. As a result, resale prices for HDB flats continued their upward trajectory.

According to the latest flash estimate, prices for resale HDB flats rose by 9.6% y-o-y last year. This was stronger than the 4.9% y-o-y increase in 2023 but weaker than the 10.4% y-o-y growth recorded in 2022.

A closer examination of the prices for each HDB town and region reveals that the average resale price for each grew at different rates. We analysed the prices across all towns and regions to identify which saw the highest price growth last year.

East region tops the growth chart

Unsurprisingly, HDB flats in the central region had the highest resale price of $736 psf last year, followed by the north-east ($613 psf), east ($590 psf), and north ($549 psf) regions. HDB flats in the west region had the lowest average resale price of $544 psf (see Chart 1).

HDB flats in the central region tend to command high resale prices due to their proximity to the city centre. Resale prices for flats in the central region are expected to remain high, especially with the reclassification of build-to-order (BTO) flats. BTO flats in the central region are typically classified under the Plus or Prime categories, which come with a longer minimum occupation period (MOP) and a subsidy clawback. As a result, prospective buyers often turn to the resale market for flats if they want to purchase flats that are free from these tighter restrictions.

In addition to having the lowest average resale price, the west region also recorded the weakest price growth of 4% y-o-y last year, while the east region had the strongest growth at 9.1% y-o-y. The other three regions experienced price growth ranging from 7.4% y-o-y to 7.6% y-o-y. The stellar performance of the east region can be attributed to the opening of Stage 4 of the Thomson-East Coast Line (TEL) in June last year, which improved MRT connectivity in the previously underserved east region.

Source: EdgeProp Market Trends (as at 6 January 2025)

The west region comprises Bukit Batok, Bukit Panjang, Choa Chu Kang, Clementi, Jurong East, and Jurong West. The poor price performance of flats in this region could be attributed to competition from BTO flats. Prospective buyers who do not have an immediate need for housing or have a modest budget are more likely to opt for BTO flats over resale flats.

There was at least one project from the west region in each of the three BTO exercises last year. Combined, the BTO projects offered more than 4,000 flats ranging in size from two-room flexi to 3Gen (see Table 1). Teban Breeze and Taman Jurong Skyline stood out for being massive projects, with more than 1,000 flats each.

It is notable that all flat types for the BTO projects were oversubscribed, with the exception of the four-room and larger flats at Taman Jurong Skyline. The project’s large number of available flats and less-than-ideal location could have contributed to this lacklustre result. Taman Jurong Skyline is not within walking distance of any MRT or LRT stations. There are also no primary schools within a 1km radius.

Geylang has the strongest price growth

The towns with the highest average resale prices last year were Central Area ($858 psf), Bukit Merah ($773 psf), and Queenstown ($765 psf). Notably, all three towns are in the central region. However, these towns did not record the highest annual price growth.

Last year, the average resale prices for the Central Area and Bukit Merah grew by 7.4% y-o-y and 3.9% y-o-y, respectively, while Queenstown saw a weaker increase of 2.1% y-o-y. The already high resale prices in these towns likely limited their growth rates, as there is less room for prices to rise before the flats become unaffordable for prospective buyers.

Geylang topped the price growth chart with an annual increase of 14.4% y-o-y last year. Tampines (11.9% y-o-y) and Kallang/Whampoa (10.1% y-o-y) took second and third places, respectively. These three towns were the only ones to achieve double-digit price growth last year (see Table 2). In terms of average resale prices, Geylang ($674 psf) ranked eighth, while Tampines ($610 psf) and Kallang/Whampoa ($742 psf) ranked thirteenth and fourth, respectively.

The central location of Geylang likely contributed to its strong price growth. Furthermore, the number of flats in the town is limited. According to the latest HDB annual report, there are 30,943 flats in Geylang, representing only 2.9% of the total number of HDB flats in Singapore.

Resale prices for flats in Geylang may have been given a boost by MacPherson Spring obtaining its MOP last year. As such, the flats in MacPherson Spring have long remaining leases of approximately 94 years. In contrast, most HDB flats in Geylang are older, with a shorter average remaining lease of approximately 59 years.

Additionally, MacPherson Spring is conveniently located within a short walking distance of the dual-line MacPherson MRT Station, as well as two markets and food centres. It is also a short drive from the Pan Island Expressway and within a 1km radius of Canossa Catholic Primary School and Geylang Methodist School (Primary) (see Map 1).

Source: EdgeProp LandLens (as at 3 January 2025)

MacPherson Spring’s convenient location and long remaining lease have made its flats popular among buyers. This HDB project comprises approximately 105 studio apartments, 63 two-room flats, 204 three-room flats, and 378 four-room flats.

Last year, 26 three-room and 54 four-room flats in MacPherson Spring were sold. The three-room flats were transacted at prices ranging from $660,000 to $790,000, while the four-room flats were sold for between $850,000 and $1.08 million. Of the 54 four-room flats sold last year, 14 fetched at least $1 million.

Additionally, there was only one small BTO project in Geylang last year. The lone BTO project in Geylang last year was Merpati Alcove, which comprises 265 Community Care Apartments (CCAs) and 168 four-room flats. Only seniors aged 55 years and above can apply for CCAs, which come equipped with senior-friendly features.

Demand for the four-room flats in Merpati Alcove was strong, with a subscription rate of 3.2. However, demand for the CCAs was weaker, with a subscription rate of 0.9. The popularity of the four-room flats from the project could be attributed to the project’s proximity to Mattar MRT Station and Canossa Catholic Primary School.

Merpati Alcove was also launched under the Plus category. The stricter restrictions for Plus flats may have motivated some buyers to opt for resale flats instead of purchasing a new flat in Merpati Alcove.

The curious case of Toa Payoh

For three-room flats, the towns with the highest price growth mirror the overall price growth in Table 2. The average resale price for three-room flats in Geylang increased by 13.1% y-o-y last year, followed by Tampines (12.1% y-o-y) and Kallang/Whampoa (9.6% y-o-y). Geylang (18.4% y-o-y) and Tampines (13.3% y-o-y) again led the pack for four-room flats, but Kallang/Whampoa (10.6% y-o-y) was pushed to fourth place by Hougang (11.4% y-o-y).

For five-room flats, Tampines took the lead with a price growth of 11.7% y-o-y last year, followed closely by Toa Payoh (11.4% y-o-y) and Geylang (11.1% y-o-y). In contrast, Kallang/Whampoa was relegated to 22nd position with a growth of only 4% y-o-y, while Hougang performed slightly better, achieving a growth of 6.1% y-o-y, which earned the town a 15th ranking (see Chart 2).

Source: EdgeProp Market Trends (as at 6 January 2025)

It appears that larger flats in Toa Payoh command significantly stronger price appreciation than their smaller counterparts. The average resale price for three-room flats in Toa Payoh ($590 psf) grew by 6.7% y-o-y last year, earning the town a 16th ranking on the price growth chart. The four-room flats in Toa Payoh ($805 psf) performed better, with a price growth of 8.9% y-o-y, securing sixth place. For five-room flats, Toa Payoh ($791 psf) achieved the second position with a strong growth of 11.4% y-o-y.

The limited number of five-room flats in Toa Payoh, compared to its three-room and four-room counterparts, could have contributed to the double-digit price growth of the former. According to the latest HDB annual report, there are 6,788 five-room flats in Toa Payoh, accounting for 16.6% of the total number of HDB flats in the town. In contrast, Toa Payoh has 16,958 three-room flats and 14,375 four-room flats, representing 41.4% and 35.1% of HDB stock in this mature town, respectively.

Furthermore, five-room flats in Toa Payoh represent only 2.7% of the total number of five-room flats in Singapore. By comparison, Sengkang has 25,710 five-room flats, accounting for 10.1% of the national total. Notably, Sengkang has the largest number of five-room flats in Singapore (see Chart 3).

Last year, the average resale price of five-room flats in Sengkang grew by 7.3% y-o-y, which was weaker than the 11.4% y-o-y growth recorded for similar flats in Toa Payoh. Additionally, the average resale price for five-room flats in Sengkang ($562 psf) was significantly lower than that in Toa Payoh ($791 psf).

Toa Payoh is a well-established residential town with many family-friendly amenities, including numerous reputable schools such as Cedar Girls’ Secondary School, CHIJ Toa Payoh (Primary and Secondary), Maris Stella High School (Primary and Secondary), Marymount Convent School, Raffles Girls’ School (Secondary), and St. Andrew’s School (Primary, Secondary, and Junior College). The presence of these popular schools attracts families with school-going children. Families are more likely to opt for larger flats because they need more space to accommodate a larger household.

Additionally, Toa Payoh is served by six MRT stations, namely Toa Payoh, Braddell, Potong Pasir, Woodleigh, Tai Seng, and the dual-line Caldecott. The town is also served by Woodleigh Mall, The Poiz Centre, and several markets and food centres.

Flats in Toa Payoh are expected to gain further popularity with the upcoming Toa Payoh Integrated Development (TPID) that is slated for completion by 2030. TPID will be built on the site of the former Toa Payoh Sports Centre along Lorong 6 Toa Payoh. The future development will feature a 10,000-seater stadium, a 2,000-seater aquatic centre with four indoor and three outdoor pools, a 5,000-seater indoor hall with 22 badminton courts, a 500-seater indoor hall with three netball courts, a gym, as well as sheltered courts for tennis and netball. TPID will also house a public library, a polyclinic, and a town park.

Conclusion

Among the five regions, HDB flats in the east region recorded the highest price growth of 9.1% y-o-y last year. This stellar performance could be attributed to improved connectivity following the opening of Stage 4 of the TEL in June last year. The central region was ranked second, with a weaker price growth of 7.6% y-o-y.

However, the HDB town with the highest price growth of 14.4% y-o-y was not from the east region but from the central region. Among the HDB towns, Geylang recorded the strongest price growth last year, followed by Tampines (11.9% y-o-y) in the east region and Kallang/Whampoa (10.1% y-o-y) in the central region.

While the overall price growth rankings were consistent for three-room flats in each town, they differed for four-room and five-room flats. Four-room flats in Hougang performed well enough to secure third place, pushing their counterparts in Kallang/Whampoa to the fourth place.

For five-room flats, Toa Payoh claimed the second position. In comparison, Toa Payoh’s three-room and four-room flats were ranked 16th and sixth on their respective price growth charts. Toa Payoh’s appeal to families, bolstered by its numerous reputable schools, could have contributed to the demand for larger flats in the town. However, the town has a limited number of five-room flats. Given the strong demand from families and the limited stock, strong price growth for five-room flats in Toa Payoh is not surprising.