Introduction

In a surprising twist in Singapore's housing market, the price gap between 4-room and 5-room HDB resale flats is shrinking at an unprecedented rate. Real estate firm OrangeTee has revealed that, while both types of flats have seen significant price increases, the 4-room units are leading the pack with a rapid surge in resale values.

Latest Market Trends

According to the latest data, average resale prices for 4-room HDB flats skyrocketed by 3.5% year-on-year in the third quarter of 2024. In stark contrast, 5-room flats only managed a modest 1.4% increase. Over a longer span, specifically from Q3 2020 to Q3 2024, the average price of 4-room flats rocketed by an astonishing 43.3%, from $445,472 to $638,566. Meanwhile, 5-room flats lagged behind with a 37.1% increase, rising from $535,462 to $734,126.

Price Gap Diminishing

With this acceleration, the price difference between 4-room and 5-room flats has diminished to a historic low of just 15%. This trend has been greatly influenced by a remarkable spike in high-value transactions for 4-room flats, with a notable number now selling for over $900,000. From January to September 2024, 687 4-room flats were sold at this price point – surpassing the 591 5-room flats and 477 executive flats sold at the same level.

Historical Context

To put this in perspective, just five years ago, only 44 4-room flats crossed the $900,000 threshold, while 5-room flats took the lead with 153 units sold at high values. This notable shift into the market's upper echelons shows an evolving demographic of buyers who are increasingly prioritizing smaller units over larger ones.

Growth in Million-Dollar Sales

Furthermore, the million-dollar segment is also witnessing a substantial increase in 4-room flat sales. In the first nine months of 2022, a mere 9% of million-dollar HDB sales were 4-room units, totaling just 25 transactions. Flash forward to the same period in 2024, and 4-room flats now account for a whopping 33.9% of all million-dollar transactions, with 254 units sold.

Factors Driving Change

This transformative trend in buyer preferences is widely attributed to a combination of factors. Rising home prices and affordability concerns are pushing potential homeowners to invest in smaller HDB flats, which now offer enticing value in comparison to their larger counterparts.

Conclusion

As Singapore's housing market continues to evolve, industry experts are closely watching these trends. Will 4-room flats soon dominate the resale market completely? Only time will tell, but one thing is clear: the dynamics of HDB resale flats in Singapore are changing rapidly, and buyers need to stay informed!