Why a shorter lease doesn’t show up in the price per square foot
Older HDB flats sell for more per square foot than newer ones. That is not the lease being worthless. It is where the old flats are.
The number that looks wrong
Take every HDB resale lodged in the last 24 months — 50,912 of them — and line the 4-room flats up by how much lease they have left. The price per square foot goes the wrong way:
| Remaining lease | Median PSF | Median price | Sales |
|---|---|---|---|
| 45–50 years | S$573 | S$530,000 | 357 |
| 50–55 years | S$550 | S$545,000 | 1,115 |
| 55–60 years | S$545 | S$565,000 | 2,562 |
| 60–65 years | S$540 | S$555,000 | 2,387 |
| 65–70 years | S$534 | S$600,000 | 1,329 |
| 70–75 years | S$543 | S$575,000 | 3,048 |
A flat with 47 years left trades above a flat with 67 years left, per square foot. Read literally, twenty years of lease is worth less than nothing.
It is not. What the table is actually showing is where the old flats are. Singapore built from the centre outwards, so a 47-year lease usually means Queenstown, Toa Payoh or Marine Parade, and a 67-year lease usually means somewhere further out. The lease is being outvoted by the location, and the two are almost perfectly confounded because they were built in the same order.
This is the most common way to misread the HDB market, and it cuts both ways: it makes old central flats look like they defy the lease, and it makes newer suburban flats look like poor value.
What the lease is actually worth
To see the lease you have to hold everything else still. We fit every resale since 2010 — 377,195 transactions — inside its own town × flat-type × quarter cell, and take out floor area, storey height and the quarter’s market level first. What is left is what the lease itself does.
It is not a straight line, and it is not the smooth decay most people picture:
| Remaining lease | Value gained per extra year |
|---|---|
| under 54 years | +1.3% |
| 54–60 years | +2.0% |
| 60–76 years | +0.5% |
| 76–82 years | +0.9% |
| over 82 years | +1.3% |
There is a step around 55–60 years where each additional year of lease is worth roughly four times what it is worth at 65. That is not a curve. It is a cliff, and it sits exactly where the financing rules sit.
The cliff is a financing rule, not a preference
Under the current rules, a buyer can use their CPF in full only if the flat’s remaining lease covers them to age 95. Below that the amount they can use is pro-rated, and the bank’s loan-to-value follows the same logic. A 30-year-old looking at a 60-year lease is fine. The same buyer looking at a 55-year lease is not — and the pool of people who can comfortably buy that flat shrinks on the spot.
The evidence that this is financing rather than sentiment is that the rule changed and the curve moved with it. Splitting the same model at May 2019, when the CPF usage rules were revised:
| Remaining lease | Before May 2019 | After |
|---|---|---|
| under 55 years | +1.02%/yr | +1.51%/yr |
| 55–65 years | +0.89%/yr | +1.42%/yr |
| 65–75 years | −0.10%/yr | +0.34%/yr |
| over 75 years | +1.21%/yr | +1.14%/yr |
The long end barely moved. The short end steepened by half. A change to how people can pay for a flat repriced the flats it applied to, which is about as clean a natural experiment as this market offers.
If you are buying
- Stop comparing PSF across lease lengths. It is the one comparison that reliably says the opposite of the truth. Compare flats with similar leases, in the same town, in the same flat type — which is what a block page is for.
- Ask who your buyer will be in ten years. A 62-year lease today is a 52-year lease when you sell, and it will have crossed the step by then. That is priced into what you can get, not into what you pay.
- Below 40 years the market thins out rather than repricing smoothly. There are simply very few transactions to learn from — 6.1% of the last 24 months’ resales had under 50 years left, and almost none had under 40 — so anyone quoting a confident price down there is extrapolating, not measuring. We cap our own rating rather than pretend otherwise.
If you are selling
The flip side of the confound is real money. If your flat is old and central, the raw PSF comparison flatters it — buyers who look only at PSF will think you are asking a lot, and buyers who look at the town will think you are cheap. The number that settles it is what your own block has actually transacted at, by flat type, recently.
That is what we publish, block by block: every lodged resale, the flat-type medians, the remaining lease, and the age at which a buyer still gets full CPF use.
Look up a block. Every HDB block page carries its own lodged resales, its flat-type medians and its remaining lease.
Transaction data: Housing & Development Board, via data.gov.sg, used under the Singapore Open Data Licence. Resale figures cover sales lodged to the date shown on each block page. A PriceVero rating is not a valuation and not an HDB valuation, and cannot tell you Cash Over Valuation — that does not exist until an Option to Purchase has been granted.