If you read my previous article: 5 Things To Take Note If Your BTO Has Hit MOP, you can consider this article as the Part 2.

I share this as an agent who has continuously met with various HDB homeowners and who observe the prices of HDB flats regularly – especially newly-MOP BTO flats that has turned 5 years old.

Walking the ground and being constantly exposed to transaction figures, I have some level of awareness of what’s going on.

“I Will Only Sell When….”

I recently went to a housewarming party at my client’s new place – I have helped him to upgrade to this new property.

Over there, he introduced me to his guests as the agent who has helped him in his property upgrading process.

One of his guests passed this comment which really caught my attention.

“There is an empty land next door where they are planning to build a mall above the MRT. The price of my property will go up after that.

And I will only sell after that.”

This sentence really started me thinking: How many other homeowners out there will have this similar thought process?

So I decided to do some research about this common beliefs that home owners have.

Are they misguided or is it rooted in hard facts?

There is a LOT of optimism and certain expectations especially regarding the prices of these much newer HDB flats.

Some are true but there is a lot of misplaced optimism going on as well.

The following are some selling points used to sell HDB flats.

Let’s examine whether these “selling points” are useful in boosting up the value of your flat.

Belief #1: My HDB is near the MRT. Hence it should attract higher prices.

With the Cross Island line being announced, my congratulations to those whose HDB flats are located at those areas.

A lot of homeowners will be thinking – there is an MRT coming up next door so the value of my home should increase.

There is nothing wrong to think this way. It is a likely possibility that prices do go up if the MRT is nearby.

So let’s observe the newest MRT line that was opened – Downtown Line.

It was opened in October 2017.

I remembered I was selling a unit there while the downtown line is open. Did it move up the price? Let’s have a look at the transactions.

Downtown line was opened on October 2017.

Did the the presence of the Tampines East MRT station bring up the price?

It is interesting to note that the prices remain relatively unchanged.

This is especially so when 2017-2018 was when property prices were very bullish and many record-high prices of en-blocs were going on.

Even when we looked at surrounding transactions, it was almost the same too.

Eventually, I managed to sell my client’s unit at $655k.

Perhaps it is just Tampines? How about other locations?

Below are the transactions at 613 Bedok Reservoir Road. It is near the Bedok North MRT station.

Transactions before Bedok North MRT was open and AFTER

The main reason I selected Blk 613 Bedok Reservoir is there is a lot more transactions here. So we can observe a clearer trend.

You can see that the prices remained at between $450K to $470K – with or without the MRT operating. 

Interesting isn’t it? The impact of a new MRT station doesn’t seem to be significant.

Let’s observe another location: Blk 302 Ubi Avenue 1. This is located very near Ubi MRT. 

It is also similar for 302 Ubi Avenue 1. There is no significant movement in prices.

Of course I can’t find brand new BTO that has a new MRT next to it.

Let me know if you have something in mind. So far, I can’t think of any.

Belief #2: My HDB is near a new Shopping Mall. Hence it should command higher prices.

Let’s discuss about HDB flats that has a new mall coming up next to it.

When I was shopping at Jurong, I could see so many residents benefiting so much from the shopping centres.

Their HDB prices will definitely increase a lot. Right?

Let’s take a look.

Seriously I got a shock when I saw this. I did not expect to see this.

This is the price of a HDB flat around the Jurong East area.

We are now referring to a place where there is an ongoing full transformation. The Jurong Lake District is coming up fast.

There is a great shopping mall coming up in the region, MRT interchange and there are lots of offices.

Initially, the prices went up when the shopping malls were opened. When the property market was going up, all the prices also went up.

However right now, transaction prices of the flats has dropped back to prices – before the shopping malls were constructed.

Let’s go take a look at Northpoint.

It was recently revamped in 2017 and has expanded to twice the size compared to previously.

I think this is a good place to do comparison for the most current condition – these blocks are located very nearby to Northpoint Shopping Centre.

We can see that most of the prices have actually lowered even after the mall is ready.

This also shows that actually having an upcoming shopping centre will not help you on increasing the potential selling price.

So for people staying at Buangkok MRT and Pasir Ris MRT – it might not be a good idea to wait 4 years for the mall to be ready before you sell.

We cannot be so optimistic that we can demand higher selling prices for our HDB flats – despite great location or great amenities. 

Belief #3: My HDB is less than 10 years old. Hence there should be a high demand for it.

There is a segment of HDB owners whose flat has already hit the 5-year MOP but is still less than 10 years old.

For these younger HDB flats, they do command a higher value compared to a 20-30 year old HDB flat.

But it is not as high as you think.

For this 11-year old HDB flat, here are the past transactions.

When the flat was newly MOP in 2013, the prices were transacted to as high as $525K.

It then started to drop slowly over the past few years.

In fact between 2017 and 2018, the prices has dropped significantly more.

Did the presence of Seletar Mall opening up right next help to increase the selling price?

Not really.

What it means is simply – a brand new 5-year old flat is much easier to sell and command higher prices. This was covered in my previous article.

Once the flat starts to grow older – as it becomes 7-8 years old, the prices begin to trend down. 

We observe a similar price trend for Blk 195E Punggol Road which was completed in 2006.

Peak prices were observed at the 5-year MOP and prices came down as the flat started to become 6-7 years old.

Prices then dropped significantly once it crossed 10 years old. 

Certain factors used to boost up the value of your HDB flat

These factors are commonly used as selling points to sell your property – whether it is HDB or private or commercial.

Putting these phrases in my listings will definitely increase my enquiries:

• Walking distance to the MRT station
• Near the market
• Near an established shopping centre

But right now, agents are putting in the remaining number of years left in the lease…. as a SELLING POINT.

Just scan some listings in Carousell or PropertyGuru.

• Remaining Lease: 94 Years
• 89 Years Left In Lease
• Only 5 Years Old!

Notice how highlighted the remaining years in the lease in many of these advertisements.

Personally, I have experienced it a few times….

Totally went quiet. *cricket sound*

Conclusion

HDB prices of brand new BTO flats seems to follow a bell-curve.

It hits a peak at around 5-years old and starts to gradually decline after that.

Again, these are simply my observations for those BTO flats built in the past 10 years.

I wrote about the HDB resale issues in various articles here in this blog which I recommend you check out.

I understand you might have your own concerns which I might not have raised here.

If you have questions, feel free to drop me a WhatsApp message below or simply fill up the contact form here.