Should You Buy a $1M Resale HDB or a $1M Resale Condo?

The lines are blurring between HDB flats and private properties as we see more million-dollar HDB transactions in central areas such as Queenstown or more specific projects such as Pinnacle@Duxton. However, while million-dollar HDB transactions are far from the norm in Singapore’s current property market, it does raise the question: Would you be better off buying a condo instead?

$1 million HDB vs $1 million private property

Enjoy a larger living space with HDB flats

The main difference between a million-dollar HDB and a million-dollar condo is the living space you’ll be able to get with a flat. As an example, let’s look at these two property listings:

Both the flat and the condo unit are priced at around $1 million, located within six minutes of each other on foot, and are relatively new, with a remaining lease of 95- 96 years.

As you can see from the table above, the resale flat is double the size of the condo, which means you get a larger living space.

(From left to right) The 4-room HDB clearly has more space than the 1-bed condo. It is almost double the size in square footage as well.

For homebuyers with kids or a growing family, the million-dollar HDB flat may be the better option as you get more space — not just in terms of the number of bedrooms, but also in the living space, which your kids may enjoy as they play and grow.

On the other hand, the 1-bedder condo unit may be a better option for newlyweds, singles, or expats who only need to accommodate for their lifestyle and space.

But to find a condo of a similar size, you’ll actually have to look further from the city. (Already, you’ll be giving up your premium location.)

As an example, we found this 850 sq ft condo unit in West Bay condominium:

2-bedroom Condo in West Bay Condo

Though they’re similar in size, this condo unit is still smaller than the HDB flat at 53 Strathmore Ave. Also, it is older than the resale flat, which has just reached its 5-year Minimum Occupation Period (MOP).

Would you rather an older condo in a less premium location but enjoy its amenities, or a newer HDB in a premium location with arguably more lifestyle amenities nearby?

In this case, you might understand how the HDB flat may be more attractive, even with a million-dollar price tag.

Condos have more amenities

But as we mention, what you will be gaining by living in a condo, though it may be smaller or further from the city, is the array of in-house facilities available to you: swimming pools, gyms, tennis courts, clubhouses, gardens, playgrounds — these are almost instant draws for homebuyers who expect to maintain a certain lifestyle. Couples with younger kids may also appreciate the playground that’s just a few floors down from where they live, within a gated community and security in place.

Are the condo maintenance fees worth it?

However, these nice facilities do come with a cost, and they’re almost $200-300 more in maintenance fees compared to HDB’s service and conservancy charges, which ranges from $20 to about $100 per month.

There are also government redevelopment programs for HDBs such as the Neighbourhood Renewal Programme that see the revamp of the whole estate — at a subsidised or no cost.

Also, if you won’t be using the condo facilities that often, or at least not all of them, then you may be better off putting your resources towards a bigger space. Besides, most HDB estates are well-developed and are complete with shopping malls, playgrounds, fitness areas, sports courts, and food centres, so it’s not like you’ll be losing any of the facilities you expect in condos. In fact, you may have more options to choose from, especially in mature estates where most million-dollar flats are located.

HDB buyers have access to a variety of grants and loans

Another point goes to HDB flats for all the CPF grants that buyers can utilise to finance their HDB flat purchase, the most prominent being the Enhanced CPF Housing Grant (EHG) and the Proximity Housing Grant (PHG). You can read more about that here.

However, while there are quite a number of CPF grants available, not everyone will be eligible for them. Still, they are a boon for homebuyers considering that there are no such grants for private properties.

Foreigners are neither eligible for CPF grants nor purchase a HDB flat, so the only option for them remains to be private properties.

There is higher rental demand and capital appreciation for condos

Owning a private property in Singapore does have a huge advantage: mainly, the ease of renting or cashing out the property. Private properties are not subject to HDB’s 5-year MOP, which restricts HDB flat owners from selling the flat immediately after purchase.

On the other hand, private property owners only need to wait three years to sell their property to avoid paying the Seller’s Stamp Duty (SSD).

More importantly, private properties have a higher potential for capital appreciation compared to HDB flats. But this should not be a problem if you are looking to buy your forever home. If you don’t intend on selling your flat, it may be the best option for you, even at a price of $1 million.

All in all, the number of positives and negatives for both HDB flats and private properties come out to be pretty equal. The most important question you need to ask yourself is: What am I willing to sacrifice?

Considering all of the factors above is a good place to start for you to figure out what your non-negotiables are, and what you can maybe let go.

We do think, though, that if you are a family, the million-dollar HDB may be a better buy for you as you’ll get more space, and you’ll be in a more mature location, so you won’t even have to sacrifice nearby amenities. But if you’re single and you want to maintain your lifestyle, then the condo may be good for you — enough space for one, with the facilities and location you may enjoy.

To make a more informed decision on what is possibly the biggest purchase of your life, we suggest speaking to a professional. Drop us a message on WhatsApp.

Take note that if you are looking to move from a condo to a HDB flat, you will need to wait 15 months upon selling your home before you are allowed to buy a resale HDB flat. But seniors aged 55 years and above who are moving to a 4-room flat or smaller are exempt from this rule. You can read more about this here.

And if you are looking to buy your 2nd residential property, you will have to pay higher ABSD rates. For Singaporeans, the ABSD is 20% for the 2nd residential property and 30% for the 3rd or subsequent property. You can read more about the new rates here.