Will HDB price controls affect the price of private property?

We are a new couple considering our housing options and have spoken to a handful of property agents.

The common thread we hear is "Don't buy HDB resale, sure lose money (depreciating asset, gov price controls). Buy private instead." (In case anyone asks, we are starting late and have exceeded the BTO ceiling)

We know they have strong incentives to convince us of this, but we hope to get at the truth too.

The government's messaging sounds like it has a strong intention to control HDB resale prices in the coming years. If the government were to succeed at it and control HDB prices, will this also dampen the price of private property, or can it still rise out of step with HDB prices?

Reasons supporting this:

While there has been a lot talk about foreigners driving up private property prices in Singapore, we came to understand that they are mostly targetting the higher end market. The mass market demand still comes from citizens/PR, and prices seem to be supported by HDB upgraders.
We came across articles about the trade-offs between HDB and private living. One is not strictly better than the other, and if the price differential is too large, we foresee that people will just opt to live in HDB instead and that could control private property prices. Unless it continues to be a popular speculative asset in spite of not having true tangible benefits relative to its price...

Discussion (3)

What are your thoughts?

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1M45

Edited 19 Dec 2022

The main culprit that drive up HDB price are singaporean. Anyhow buy , pay whatever price.
Private property price is actually increasing quite steadily pass 2 years.
Only HDB spike up like crazy.
People who have extra money, and can afford, who want to invest in property will still buy private.
Long term, nobody can fight the market even sg govt. If all building cost increase. Sg govt will have to rise bto price then everything will follow.
Living in private is an lifestyle, there will still be people who prefer enjoying life. Car so expensive, alot of people still buy 🤷‍♂️

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19 Dec 2022

As with other life decisions and investments, ask yourself first what is the motivation or intention. for own stay or investment?

own stay - will you care if it drops to $0, or for that matter, appreaciate to $5mil (extreme case). no. as long as you like the environment, is close to family, etc etc your criteria, future price should not matter much.

i am of the strong opinion that HDB (public housing) should not be used as an investment. it IS for retirement planning - but not so much for cash flow, price appreciation. but for a place to grow old and live happily ever after.

but if you want for investment, intend to pass down to children, you want security, tennis court, private gym etc etc then it matters whether is it condo, landed, leasehold, freehold, future master plan, price appreciation etc etc.

2nd, is of course mortage servicibility comfort level. you need to calculate your both affordability to service the repayment. even if xxx condo will enbloc next year price appreciate 500%, can you survive by eating grass for the next few months?

hope this helps.

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