Articles · Buying, Lease
The $1.2 million flat that costs less than the $475,000 one
Not a trick of arithmetic. A flat is a lease, and once you divide everything you will ever pay by the months you actually get, the ranking turns over.
Oct 19, 2026 · Daily Study SG
A three-room flat in Chinatown sold recently at $475,000. A four-room in Hougang sold at $1.23 million — 2.6 times the price. On every measure an agent would quote, the first is the cheaper flat.
It is not. The Chinatown lease began in 1974 and has 47 years left. The Hougang lease began in 2016 and has 89 years. Count everything a buyer will ever pay and divide it by the months they actually get, and the dearer flat costs $1,909 a month against $1,490 — only 28 per cent more, for a flat costing 159 per cent more. Per square foot per year it is outright cheaper: $23 against $25.
Show the figures
| Chinatown, built 1974 | Hougang, built 2016 | |
|---|---|---|
| Price | $475,000 | $1,228,000 |
| Size | 721 sq ft | 1001 sq ft |
| Lease remaining | 47 years | 89 years |
| Cash up front | $130,500 | $343,620 |
| Mortgage interest | $150,563 | $389,246 |
| Everything, over the lease | $840,353 | $2,038,346 |
| Per month of lease | $1,490 | $1,909 |
| Per sq ft per year | $25 | $23 |
Why the instalment misleads
The monthly instalment is the figure everyone compares, and it is the wrong one. It stops after 25 years. The lease does not: it carries on being consumed for another 22 years in Chinatown and 64 years in Hougang. Comparing two flats on an instalment compares the financing rather than the thing being financed.
The Chinatown buyer is paying nearly as much each month for a flat that runs out decades sooner, and at the end of it holds nothing — a 99-year lease returns to the state.
What this calculation leaves out
Four things, each of which could move the answer, and none of which is hidden:
- No discounting. A dollar paid in the final year of the lease counts the same as a dollar paid today, which flatters the long lease.
- No resale value. This is the cost of using a lease to its end. Someone selling in year ten has a different calculation entirely.
- No opportunity cost on the deposit, and no CPF accrued interest, which must be restored on sale.
- Location is not priced. Chinatown is not Hougang. The arithmetic says what the flat costs, not what it is worth to live there.
The first and second matter most, and both cut the same way: they favour the longer lease more than they should. A buyer who intends to sell in ten years should weigh the resale market, not this figure.
Running it on a real pair
These two flats are real and their prices are block medians from the past twelve months. To put any two blocks side by side on the same basis, use the comparison tool; to change the deposit, rate or term, use the calculator.