Is it worth buying a big but old HDB flat in Singapore? Here's how the biggest HDB flats have performed

When it comes to the very biggest flats and whether it’s worth paying their high prices today, it seems that everyone has divided opinions.

Some will tell you these flats are already at peak prices and quite old, with little room for appreciation. Others will note that the number of million-dollar flats, and the scarcity of these large units, will keep their prices rising.

Who’s right? We plumbed the depths of transaction records to try and find a pattern. Let’s take a look at how the prices of the biggest HDB flats in Singapore have been moving as compared to everything else:

Price movements of the biggest flats versus others

Year	Three room	Four room	Five room	Executive
1990	$42,618	$81,766	$132,615	$186,458
1991	$44,480	$81,800	$138,103	$191,167
1992	$48,174	$90,928	$154,384	$213,971
1993	$71,019	$134,511	$227,253	$296,455
1994	$94,328	$175,072	$284,072	$367,723
1995	$121,298	$216,663	$341,553	$443,288
1996	$173,340	$295,949	$441,541	$572,772
1997	$195,115	$304,972	$442,182	$567,156
1998	$154,963	$253,756	$373,743	$479,760
1999	$146,099	$243,891	$355,042	$447,643
2000	$157,650	$256,723	$375,507	$479,089
2001	$145,396	$233,900	$340,184	$445,524
2002	$144,189	$224,251	$324,428	$422,226
2003	$159,651	$230,132	$322,054	$408,603
2004	$174,476	$237,591	$315,056	$386,484
2005	$170,400	$234,486	$303,456	$361,812
2006	$166,727	$235,506	$303,186	$357,635
2007	$181,502	$254,604	$327,557	$384,763
2008	$226,443	$308,748	$389,542	$458,551
2009	$250,124	$331,898	$403,023	$471,082
2010	$288,079	$372,574	$454,304	$522,056
2011	$325,340	$422,735	$501,826	$577,826
2012	$351,345	$456,295	$542,172	$629,253
2013	$361,936	$479,261	$568,800	$661,300
2014	$341,008	$444,921	$536,065	$639,124
2015	$324,761	$433,627	$515,018	$620,677
2016	$322,474	$434,479	$522,709	$624,048
2017	$317,834	$437,120	$532,277	$627,211
2018	$306,478	$431,753	$527,635	$630,780
2019	$299,457	$429,749	$526,812	$617,561
2020	$312,709	$448,608	$541,457	$635,395
2021	$352,961	$505,095	$603,990	$705,559
2022	$388,974	$549,088	$654,253	$782,007
2023	$411,880	$584,035	$685,338	$829,310
2024	$420,389	$593,725	$708,654	$863,726

Source: HDB

Between the period from 1990 to the present, the top performers are actually the smaller flats.

Three-room flats appreciated by 886.4 per cent over this period, whilst the largest executive flats appreciated by just 336.22 per cent.

Indeed, one of the apparent patterns is that the larger the flat, the slower the appreciation over this 34-year period.

However, we shouldn’t just look at the overall quantum. We also took a look at the year-on-year appreciation across the different flat sizes:

Year	Three room	Four room	Five room	Executive
1990	–	–	–	–
1991	4.4 per cent	0.0 per cent	4.1 per cent	2.5 per cent
1992	8.3 per cent	11.2 per cent	11.8 per cent	11.9 per cent
1993	47.4 per cent	47.9 per cent	47.2 per cent	38.5 per cent
1994	32.8 per cent	30.2 per cent	25.0 per cent	24.0 per cent
1995	28.6 per cent	23.8 per cent	20.2 per cent	20.5 per cent
1996	42.9 per cent	36.6 per cent	29.3 per cent	29.2 per cent
1997	12.6 per cent	3.0 per cent	0.1 per cent	-1.0 per cent
1998	-20.6 per cent	-16.8 per cent	-15.5 per cent	-15.4 per cent
1999	-5.7 per cent	-3.9 per cent	-5.0 per cent	-6.7 per cent
2000	7.9 per cent	5.3 per cent	5.8 per cent	7.0 per cent
2001	-7.8 per cent	-8.9 per cent	-9.4 per cent	-7.0 per cent
2002	-0.8 per cent	-4.1 per cent	-4.6 per cent	-5.2 per cent
2003	10.7 per cent	2.6 per cent	-0.7 per cent	-3.2 per cent
2004	9.3 per cent	3.2 per cent	-2.2 per cent	-5.4 per cent
2005	-2.3 per cent	-1.3 per cent	-3.7 per cent	-6.4 per cent
2006	-2.2 per cent	0.4 per cent	-0.1 per cent	-1.2 per cent
2007	8.9 per cent	8.1 per cent	8.0 per cent	7.6 per cent
2008	24.8 per cent	21.3 per cent	18.9 per cent	19.2 per cent
2009	10.5 per cent	7.5 per cent	3.5 per cent	2.7 per cent
2010	15.2 per cent	12.3 per cent	12.7 per cent	10.8 per cent
2011	12.9 per cent	13.5 per cent	10.5 per cent	10.7 per cent
2012	8.0 per cent	7.9 per cent	8.0 per cent	8.9 per cent
2013	3.0 per cent	5.0 per cent	4.9 per cent	5.1 per cent
2014	-5.8 per cent	-7.2 per cent	-5.8 per cent	-3.4 per cent
2015	-4.8 per cent	-2.5 per cent	-3.9 per cent	-2.9 per cent
2016	-0.7 per cent	0.2 per cent	1.5 per cent	0.5 per cent
2017	-1.4 per cent	0.6 per cent	1.8 per cent	0.5 per cent
2018	-3.6 per cent	-1.2 per cent	-0.9 per cent	0.6 per cent
2019	-2.3per cent	-0.5 per cent	-0.2 per cent	-2.1 per cent
2020	4.4 per cent	4.4 per cent	2.8 per cent	2.9 per cent
2021	12.9 per cent	12.6 per cent	11.5 per cent	11.0 per cent
2022	10.2 per cent	8.7 per cent	8.3 per cent	10.8 per cent
2023	5.9 per cent	6.4 per cent	4.8 per cent	6.0 per cent
2024	2.1 per cent	1.7 per cent	3.4 per cent	4.1 per cent

If we average out their appreciation rates over the years, here’s what you’ll see:

Period	Three room	Four room	Five room	Executive
1990 – 2024	7.81 per cent	6.70 per cent	5.66 per cent	5.16 per cent
2014 – 2024	1.54 per cent	2.10 per cent	2.13 per cent	2.57 per cent

Notice how between 1990 to 2024, the average year on year returns for smaller flats are better?

But if we isolate the returns of just the past 10 years, the outcome is the complete opposite!

If we go by annualised returns, the larger flats in the past 10 years now outperform the smaller ones; though note that the margin between five-room flats and executive flats is rather slim.

In any case, the 10-year annualised returns for the executive flats beat the smaller flats, despite three-rooms showing the biggest gains over the 34-year period.

To further illustrate this, let’s consider the return of each flat type assuming you bought and sold within 10 years for each year since 2000.

What happens if you bought and sold a flat within 10 years? 

This may be more pertinent to upgraders, who don’t typically hold a flat for 30+ years; quite often you’ll buy and sell the flat within a 10-year span. In this context, would a smaller or bigger flat serve you better?

The table above shows the average prices of each flat type and the associated gains or losses if you bought and sold over a 10-year period.

For example, if you bought a three-room flat in 1990 and sold it in 2000, you would’ve made 270 per cent.

In this case, green refers to the biggest winner across all the flat types for that year and red represents the lowest performer.

Notice how three-room flats are usually the winners from those who bought in 1990 and sold 10 years later, up until 2008? From there, it seems that the tables turned, where the bigger executive flats made more!

From 1990 to 2007, executive flats showed a rather lacklustre performance. Why? Here’s one possible explanation, which even led to the invention of the Built To Order (BTO) system:

"Almost every year, until 2006, Members of Parliament expressed their concerns in Parliament about the unsold stock (referring to HDB flats), and asked what steps HDB was taking to clear it. The Auditor-General’s Office, too, urged the Board to reduce its unsold stock, highlighting the high cost of holding vacant flats,” he said." – CNA

The issue of vacancies had started to pile up as early as 1989 actually, particularly in towns like Woodlands.

In any case, there was a huge supply of flats, jumbo flats (two flats joined into one) came into being, and flats from that particular era were already bigger than today’s. So perhaps big executive flats were less of a (pardon the pun) big deal back then.

But then in 1995, Executive Maisonettes were phased out; and in 2005, Executive Apartments also stopped being built.

Now these large flats started to take on scarcity value, as their numbers could only decrease going forward.

So by around 2008, Executive flats started to see more significant demand and appreciation; and it’s likely that this will carry on until the point where lease decay kicks in. 

While we don’t know when that is, we wouldn’t be too quick to guess that it’s anytime soon, for reasons we describe here. 

A look at performance in terms of absolute gains/losses

If we look at the absolute gains, there is a slight difference in pattern here. Executive flats bought between 1990 to 1993 made the most as indicated by the green. This is despite being the biggest lower in terms of return on investment.

However, those who bought between 1994 to 2002 and held it for 10 years saw the biggest loss in total returns.

Again, this is due to the weaker performance of executive flats in the 1990s, with transactions in ‘96 and ‘97 pulling down the average gains significantly.  

From 2004 to 2014, those who bought and sold at the end of 10 years would have seen better absolute gains compared to those prior.

So to conclude this point: within the context of the past 10 years, executive flats have generally outperformed smaller counterparts; but not at all points in our real estate history. 

Does the model of the executive flat matter?

There are different types of executive flats, so we looked at their prices:

Year	Exec Adjoined flat	Exec Apartment	Exec Maisonette	Multi-Generation
1990	–	$182,802	$187,528	–
1991	–	$185,053	$192,575	$165,000
1992	–	$214,830	$213,743	$226,586
1993	–	$295,177	$296,864	$293,700
1994	–	$370,294	$366,935	$398,703
1995	–	$454,511	$439,542	$486,585
1996	–	$577,859	$570,710	$606,696
1997	–	$570,296	$564,846	$605,919
1998	–	$481,456	$477,269	$516,930
1999	–	$449,056	$444,896	$461,607
2000	$377,133	$482,402	$476,517	$500,050
2001	$358,500	$448,389	$441,335	$456,665
2002	$355,743	$427,631	$415,334	$433,186
2003	$359,718	$414,423	$401,661	$431,333
2004	$345,394	$388,211	$384,866	$431,833
2005	$341,682	$362,109	$361,846	$421,600
2006	$372,841	$355,358	$361,094	$400,385
2007	$421,063	$382,241	$388,933	$409,952
2008	$528,233	$454,632	$463,937	$480,200
2009	$502,611	$463,285	$483,977	$511,444
2010	$595,449	$514,070	$534,913	$617,241
2011	$680,900	$567,627	$593,963	$675,000
2012	$750,333	$616,142	$652,329	$798,167
2013	$782,400	$649,298	$681,961	$767,127
2014	$761,600	$614,571	$677,573	$702,000
2015	$720,861	$594,359	$662,627	$805,000
2016	$810,299	$590,919	$678,280	$722,750
2017	$762,857	$598,065	$679,945	$783,750
2018	$790,160	$600,946	$677,569	$801,393
2019	$696,224	$586,445	$661,785	$819,190
2020	$759,800	$608,669	$674,645	$773,125
2021	$819,200	$674,012	$750,996	$820,778
2022	$877,306	$747,853	$832,859	$874,949
2023	$980,806	$798,608	$873,401	$996,667
2024	–	$812,021	$915,431	–
Returns	160 per cent	66 per cent	83 per cent	99 per cent

Over roughly the past two decades, we’ve seen that adjoining flats tend to do the best; not a big surprise, as they’re bigger and rarer. The follow-up, interestingly enough, was 3Gen flats.

This one is a surprise, as 3Gen flats have much smaller prospective buyer pools. These flats are reserved strictly for extended family buyers; so perhaps there are more Singaporeans living with extended family over the past two decades. 

Speculatively, we wonder if this relates to our ageing population. It’s easier to look after your older parents when they’re under the same roof, and perhaps 3Gen flats can get more popular still.

Year-on-year returns for the different Executive flat types

Year	Exec Adjoined flat	Exec Apartment	Exec Maisonette	Multi-Generation
2001	-4.9 per cent	-7.1 per cent	-7.4 per cent	-8.7 per cent
2002	-0.8 per cent	-4.6 per cent	-5.9 per cent	-5.1 per cent
2003	1.1 per cent	-3.1 per cent	-3.3 per cent	-0.4 per cent
2004	-4.0 per cent	-6.3 per cent	-4.2 per cent	0.1 per cent
2005	-1.1 per cent	-6.7 per cent	-6.0 per cent	-2.4 per cent
2006	9.1 per cent	-1.9 per cent	-0.2 per cent	-5.0 per cent
2007	12.9 per cent	7.6 per cent	7.7 per cent	2.4 per cent
2008	25.5 per cent	18.9 per cent	19.3 per cent	17.1 per cent
2009	-4.9 per cent	1.9 per cent	4.3 per cent	6.5 per cent
2010	18.5 per cent	11.0 per cent	10.5 per cent	20.7 per cent
2011	14.4 per cent	10.4 per cent	11.0 per cent	9.4 per cent
2012	10.2 per cent	8.5 per cent	9.8 per cent	18.2 per cent
2013	4.3 per cent	5.4 per cent	4.5 per cent	-3.9 per cent
2014	-2.7 per cent	-5.3per cent	-0.6 per cent	-8.5 per cent
2015	-5.3 per cent	-3.3per cent	-2.2 per cent	14.7 per cent
2016	12.4 per cent	-0.6 per cent	2.4 per cent	-10.2 per cent
2017	-5.9 per cent	1.2 per cent	0.2 per cent	8.4 per cent
2018	3.6 per cent	0.5 per cent	-0.3 per cent	2.3 per cent
2019	-11.9 per cent	-2.4 per cent	-2.3 per cent	2.2 per cent
2020	9.1 per cent	3.8 per cent	1.9 per cent	-5.6 per cent
2021	7.8 per cent	10.7 per cent	11.3 per cent	6.2 per cent
2022	7.1 per cent	11.0 per cent	10.9 per cent	6.6 per cent
2023	11.8 per cent	6.8 per cent	4.9 per cent	13.9 per cent
Average from 2000 – 2023	4.6 per cent	2.5 per cent	2.9 per cent	3.4 per cent
Average from 2013 – 2023	2.6 per cent	2.2 per cent	2.6 per cent	3.0 per cent

Adjoined flats still lead the pack on an annualised basis; and again, 3Gen flats followed just behind; so there’s no real difference in this context.

However, in the past 10 years, we see that multi-generational flats are the ones that outperform, on average.

So to conclude from the following, the scarcity and size of larger flats can not only hold their prices, but possibly even outperform the smaller flats; they have room for appreciation still. 

However, there’s still the inevitability of lease decay which, at some undetermined point in the future, will almost certainly cause this to change. 

ALSO READ: The downside of buying a BTO flat in Singapore: 4 lesser-known challenges of the 5-year MOP

This article was first published in Stackedhomes.