Bala’s Curve

Bala’s Curve is worth understanding if you are buying or selling an HDB resale flat because almost every HDB flat sits on a 99 year lease. In Singapore’s leasehold market, time is not just background context. It is one of the factors that shapes valuation logic, buyer confidence, and how prices behave as a flat ages.

In plain terms, Bala’s Curve explains that leasehold value does not fall at a steady pace year by year. For much of a lease, the effect can feel small and easy to ignore. Later, when the remaining lease starts to feel meaningfully shorter to buyers, the impact becomes more visible in price expectations and negotiation behaviour.

A practical way to picture this is to think of a battery that performs strongly for most of its life, then drops faster near the end. When the lease is still long, most buyers focus on location, layout, and condition. When the lease starts to feel short, buyers become more cautious, comparisons become stricter, and sellers often need stronger justification for the same asking price.

Why This Matters For Buyers And Sellers

For HDB Buyers

This affects how safely you can buy and how easily you can sell in the future. When the remaining lease becomes shorter, loan options can become tighter and future buyers may hesitate. If you buy without understanding this, you might face difficulty selling later not because the flat is bad, but because time has changed how the market views it.

For HDB Sellers

This affects timing and pricing. Waiting a few more years may not always mean a better price if the lease has crossed into a range where buyers become cautious. Sellers who understand this price their flats based on how buyers see lease length, not just based on nearby transactions.

How HDB Insights Uses This Term

At HDB Insights, we do not treat remaining lease as a single number. We group lease into practical bands because resale prices change in clusters rather than declining evenly year by year. These bands reflect how buyers actually think and compare flats in the resale market.

Instead of assuming a smooth decline in value, we observe that prices tend to form clear groupings when lease crosses certain psychological and financial comfort levels. This allows buyers and sellers to compare flats fairly with others that sit in the same lease profile, rather than mixing very different ageing patterns into one misleading median price.

The Practical Meaning Behind The Curve

Bala’s Curve is widely regarded as the reference model for understanding leasehold value in Singapore property. It is based on the idea that time has a compounding effect on how people perceive risk.

Early in a lease, buyers rarely think about the end of the lease. The flat still feels modern, usable, and easy to finance. Because of this, prices do not behave very differently from much newer homes. As the lease shortens, a subtle shift happens. Buyers begin to think about loan limits, future resale difficulty, and long term liveability.

Later, when the lease feels visibly shorter, this shift becomes much stronger. Buyers start comparing the flat not just on size or location, but on how many usable years remain. At this stage, two flats in the same town and same street can have noticeably different prices simply because they fall into different lease comfort zones.

This is why you sometimes see older flats in good locations still holding value for many years, then appearing to soften more quickly later. The change is not random. It follows the pattern Bala’s Curve describes.

Professionals such as valuers, analysts, and planners rely on this understanding when making decisions. Government agencies use similar principles when calculating lease related schemes and land value adjustments. Property analysts use it to assess whether price movements are due to market demand or simply the natural effect of time on the lease.

Real World Situations Where The Curve Is Less Obvious

While Bala’s Curve explains the general pattern, real life HDB prices are also influenced by other forces.

Strong demand in a popular town can temporarily mask the effects of lease ageing. Unique layouts, larger floor areas, or rare locations can make buyers willing to pay more than what lease logic alone suggests. In certain mature estates, heritage value and convenience keep demand strong even for older flats.

During strong property cycles, prices of ageing HDB flats can still rise. This does not mean the lease is not decaying. It simply means overall market conditions are pushing prices up faster than the lease effect can pull them down.

There is also a human element. Some buyers prioritise affordability, size, or location over lease length, especially if they plan to stay for many years rather than resell quickly. This demand helps support prices for older HDB flats in ways that pure theory cannot always predict.

Because of these factors, Bala’s Curve should be seen as a guiding map rather than a strict rule. It explains the underlying direction of value, even when market noise temporarily hides it.

Common Misunderstandings And Mistakes

Many buyers and sellers assume lease value drops evenly over time, but that is not how the market behaves. Prices often look steady for a long stretch, then change more sharply later when the remaining lease starts to feel short to buyers.

A very common mistake is comparing HDB flats that are similar in size and location but not similar in remaining lease. This leads to the wrong price reference. A flat can look like a fair match on paper, but if it sits in a different lease comfort zone, buyers will price it differently and negotiations will play out differently.

Another mistake is thinking a strong location fully cancels out lease age. Location helps and can support demand, but it does not remove buyer concerns about financing and future resale as the lease gets older. Lease length still influences confidence and affects how wide your buyer pool is.

Some sellers also assume that if the overall market is rising, lease age does not matter. In reality, a strong market can temporarily mask the effect of lease ageing, but it does not remove it. When buyers become more cautious again, older lease profiles tend to feel the impact faster.

The final mistake that matters is waiting to sell without thinking about how buyer behaviour changes across lease ranges. Sellers often delay because they see neighbours achieving good prices, but if the flat crosses into a lease range that buyers perceive as riskier, the seller may lose negotiating power even if the town remains popular.

Bala’s Curve FAQs