Should You Keep Your Resale HDB Flat When Buying a Private Property? 5 Key Factors to Consider
TLDR In Singapore, owning both an HDB flat and a private property has become complicated due to factors like Additional...
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TLDR
High property prices in Singapore make it difficult for most to upgrade from HDB flats to private condos, despite periodic calls to relax policies like the Additional Buyer’s Stamp Duty (ABSD) for upgraders. The ABSD controls demand and helps prevent runaway price increases by discouraging rushed upgrades and encouraging realistic resale pricing. Executive Condominiums (ECs) are an exception, as they don’t require upfront ABSD for existing HDB owners. Homeowners benefiting from SERS (Selective En bloc Redevelopment Scheme) can upgrade easily due to windfall gains, but this impacts only a small minority. Whether you should buy, sell, or wait depends on your personal situation—there’s no one-size-fits-all answer. Strategic planning and market knowledge are essential for navigating Singapore’s real estate landscape.
At what moment has the typical Singaporean claimed, “The high costs aren’t an issue when it comes to purchasing a condominium?”
It’s surprising that a property agency needs a survey to discover that high home prices make upgrading difficult and that people prefer HDB flats. This isn’t a new insight.
Every year, media stories emerge about real estate players pushing to relax certain policies. This year’s focus is on adjusting the Additional Buyer’s Stamp Duty (ABSD) for upgraders. Currently, if you buy a new property first, you pay the ABSD upfront, but can apply for a refund if you sell your old home within six months. This rule doesn’t apply to Executive Condominiums (ECs), where you can buy first without paying ABSD.
But should we change the ABSD just to assist upgraders?
The ABSD acts as a control on demand. Without it, show flats could be more crowded, with more buyers rushing to secure early discounts. The ABSD also influences resale flat prices—if homeowners must sell quickly to avoid losing the ABSD, they are likely to price their flats realistically. This differs from a scenario where they can buy a new condo first and take their time seeking the best price for their current flat.
Additionally, if buying first isn’t an option, fewer people might decide to upgrade due to the hassle of temporary housing and storage when selling before buying. The ABSD can lead some homeowners to delay upgrading altogether.
Ultimately, if fewer homeowners rush to upgrade, it puts less upward pressure on prices.
Do you know who will have no trouble upgrading, though?
Someone whose flat is chosen for SERS. One clever homeowner we met at Stacked gained from SERS at Tanglin Halt. They received a new unit in 2021 at Dawson, near SkyOasis @ Dawson, which recently had a record sale of a $1.73 million flat.
If that seller upgraded, I hope they’re enjoying their $3 million condo; they can likely afford it.
This makes me wonder: now that the government has somewhat addressed the windfall effect of mature estate housing with the Prime model, will there be something similar to SERS? Only about four or five per cent of flats benefit from SERS currently – but the impact has been quite uneven for some.
I don’t think fairness is an issue; to me, benefiting from SERS isn’t any more unfair than winning 4D. However, I’ve noticed that Singaporean homeowners care a lot about fairness, and more stories about expensive SERS replacement flats will likely lead to complaints.
Should You Buy, Sell or Wait?
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
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