Introduction

In a surprising twist within Singapore's housing market, the price gap between 4-room and 5-room HDB resale flats is diminishing rapidly. Real estate firm OrangeTee has revealed that although both types of flats have experienced significant price increases, 4-room units are outpacing their 5-room counterparts.

Price Trends

During the third quarter of 2024, average resale prices for 4-room HDB flats skyrocketed by an impressive 3.5% year-on-year. In contrast, 5-room flats only recorded a 1.4% increase for the same period. Over the past four years—specifically from Q3 2020 to Q3 2024—4-room flat prices soared by a staggering 43.3%, climbing from $445,472 to $638,566. On the other hand, 5-room flats experienced a more modest growth of 37.1%, with prices moving from $535,462 to $734,126.

Narrowing Price Differential

This sharp increase in 4-room flat prices has effectively narrowed the price differential between these two types of housing to an unprecedented low, currently at just 15%. OrangeTee noted that the resale prices of 4-room flats are consistently reaching high values, with many transactions surpassing the $900,000 mark. Remarkably, from January to September 2024, 687 4-room flats were sold for $900,000 or more, outpacing 5-room flats (591 units) and even executive units (477 units), which were traditionally considered the premium choice.

Comparison with Past Trends

This shift is particularly striking when compared to five years ago. Back then, only 44 4-room flats breached the $900,000 threshold, while 5-room flats led high-value sales with 153 units sold at that price range.

Million-Dollar Market Segment

The trend also extends dramatically into the million-dollar market segment. Between January and September 2022, merely 9% of all million-dollar resale flats sold were 4-room units—a mere 25 transactions. Fast forward to 2024, and 4-room flats now account for a significant 33.9% of all million-dollar transactions, amounting to 254 units. This indicates a notable change in buyer behavior, as many are now prepared to pay a premium for smaller HDB flats.

Expert Insights

Experts in the real estate sector attribute this noteworthy trend to a combination of shifting buyer preferences and growing affordability concerns in a context of escalating home prices. As more homeowners look to downsize or enter the market, the appeal of smaller yet high-value flats is growing, reflecting a broader transformation in Singapore's housing landscape.

Conclusion

In summary, the rapid ascent of 4-room HDB flats not only demonstrates changing market dynamics but also signals a new era of demand that could reshape Hong Kong’s real estate future. Will this trend continue, and what does it mean for the future of housing choices in Singapore? Only time will tell!