Overview

In a surprising twist to Singapore's housing market, the once clear price distinction between 4-room and 5-room HDB resale flats is rapidly diminishing. According to insights from the real estate firm OrangeTee, the appetite for 4-room flats is not only robust but has also driven their prices to unprecedented heights.

Price Trends

In the third quarter of 2024, average resale prices for 4-room HDB flats skyrocketed by 3.5% year-on-year, a remarkable increase compared to the 1.4% rise seen in 5-room flats. Over the span of four years — from Q3 2020 to Q3 2024 — the price of 4-room flats surged by an astonishing 43.3%, leaping from $445,472 to $638,566. Meanwhile, 5-room flats experienced a more modest growth of 37.1%, climbing from $535,462 to $734,126.

Narrowing Price Gap

This rapid appreciation in 4-room flat prices has led to the narrowest price gap between the two types of units on record, with only a 15% difference in their average resale prices. The market has also witnessed a notable influx of high-value 4-room transactions, with an impressive 687 units selling for $900,000 or more from January to September 2024. This eclipsed the sales of 5-room flats and executive units, which were recorded at 591 and 477 respectively.

Historical Comparison

To put this in perspective, just five years ago, only 44 4-room flats crossed the $900,000 threshold, while 5-room flats topped the high-value market with 153 sales. In a dramatic reversal, the number of million-dollar 4-room flats sold has surged — making up 33.9% of all million-dollar transactions in the first nine months of 2024, compared to a mere 9% in 2022.

Buyer Preferences

Experts are linking this shift to changing buyer preferences amidst rising home prices. Many are now opting for smaller, more affordable units, even at premium prices, suggesting a market trend that favors practicality over size. This significant shift is reshaping the dynamics of Singapore’s real estate landscape and suggests that the traditional views on housing size may be undergoing a radical transformation.

Conclusion

As Singaporeans increasingly embrace the allure of 4-room flats, the future of HDB housing could be on the verge of a monumental change. So, what does this mean for prospective homebuyers? Will 4-room flats continue to dominate the market, or will 5-room units make a comeback? Keep an eye on this changing landscape as it develops!