At what age of an HDB flat will price start to depreciate

The depreciation of HDB flats in Singapore is influenced by several factors, including the remaining lease, government policies, and market conditions.

Remaining Lease

The price of an HDB flat starts to depreciate more significantly as the remaining lease shortens. Here are some key milestones:

• Balance lease less than 35 years: At this point, buyers may face difficulties in securing a bank loan because banks require the property to have a remaining lease of at least 30 years at the end of the loan tenure. This restriction reduces the pool of potential buyers, leading to a slower appreciation or even depreciation of the flat's value.
• Balance lease less than 30 years: CPF usage is no longer allowed for down-payment and HDB loan servicing, further limiting the number of eligible buyers.
• Balance lease less than 20 years: No loans are available for the purchase of such flats, significantly impacting their market value.

Government Upgrades and Policies

Government upgrading programs and subsidy grants can help mitigate the depreciation of HDB flats to some extent. However, these efforts cannot completely offset the natural depreciation that occurs as the lease ages.

Market Conditions

Cooling measures and changes in supply and demand also affect HDB flat prices. For example, increased supply of new Build-To-Order (BTO) flats and tighter loan-to-value limits can moderate the resale prices of older HDB flats.

In summary, while HDB flats generally depreciate slower than private properties, the significant depreciation starts to become more pronounced as the remaining lease approaches 30-35 years, due to loan restrictions and other market and policy factors.