Are you ready to upgrade to a private home?

The move from an HDB flat to a private home is a well-trodden path, one that saw many Singapore families turn their dream of owning and living in a condominium into reality. Today, many households continue to aspire to live in a private condo development that offers exclusive facilities and different lifestyles.

With the strong growth in HDB resale flat prices in the past year, many flat owners have decided to make that switch. HDB resale values started to recover in the second half of 2019 after booking six consecutive years of decline. In 2021, HDB resale prices surged by 12.7%, following a 5% increase in 2020. This has provided the impetus for many HDB upgraders to act, selling their flat and recycling the proceeds to buying a private home – either in the resale market or in a new launch project, particularly in the mass market.


Consider these first! For HDB flat owners who have met the 5-year minimum occupation period (MOP) and are seriously thinking about moving to a private condo, there are several key considerations to mull over.


1. Motivation to switch to a private home Have a clear idea of what is the objective of making the move from an HDB flat to a private home. Is it to enjoy the more privacy in a gated condo project and to have exclusive use of various condo facilities, from swimming pools, to yoga pavilion, to herb garden and club house? Perchance, a certain condo project is highly attractive, or perhaps it is to entertain the possibilities of potential capital gains in the future? Tracking the URA private property price index (PPI) and the HDB Resale Price Index (HRPI), it appears that the PPI has enjoyed a faster growth rate on a 5-year and 10-year basis as at Q1 2022, compared to the HRPI (see Chart 1).



Chart 1: URA Property Price Index vs HDB Resale Price Index

- Source: PropNex Research, URA, HDB


2. Financial outlay and monthly repayment Upgraders tend to look at mass market private homes in the Outside Central Region (OCR) or executive condominiums (ECs) – a type of public and private housing hybrid. In recent years, residential property prices have continued to climb and have reached a new peak.

Based on URA Realis caveat data, the average transacted prices for OCR new launches, OCR resale and new EC projects have surpassed that of 2021 at $1.74 million, $1.25 million and $1.37 million respectively (see Table 1).

At these prices, buyers will be looking at a monthly loan repayment of anything between $3,900 and $5,500 based on the assumption that the upgrader has sold the flat and does not have any other financial commitments.


Table 2 illustrates the financial outlay should the buyer borrows at 75% LTV (loan to value), at a 2% interest rate and a 25-year loan tenure.

Preferably, would-be buyers should work with an experienced real estate salesperson or a financial consultant to review their finances before embarking on big-ticket purchase such as a new home.


Table 1: Average Transacted Prices ($) of Private OCR Non-landed New Sales, Resale Homes and New ECs



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