TLDR
The post-COVID Singapore property market has grown more complex, especially for HDB upgraders facing higher interest rates, cooling measures, and tighter resale supply. Two-bedroom condos, especially those with two bathrooms, are gaining popularity among small families, challenging traditional preferences. The Core Central Region (CCR) is seeing fewer foreign buyers due to increased Additional Buyer’s Stamp Duty (ABSD), narrowing price gaps with other regions. Resale options are scarce as many owners hesitate to sell given high replacement costs and ABSD penalties. Buyers now prioritize efficient layouts over simple price per square foot comparisons due to new Gross Floor Area rules. Financing multiple homes has become harder with tighter debt servicing limits and higher rates, pushing upgraders to consider larger single condos. Sellers should expect more discerning buyers who value usable living space. Personal circumstances dictate whether it’s better to buy, sell, or wait in this evolving market.
The COVID-19 pandemic significantly reshaped Singapore’s property market, leading to record-breaking prices, rapid new launch sell-outs, and tight supply in the resale condo segment. A key driver of these trends has been HDB upgraders, whose decisions impact both public and private housing markets. However, the upgrading journey has become considerably more complex and riskier in the post-COVID era, marked by interest rate surges, cooling measures, and narrowing price gaps. Established norms, such as the preference for 3-bedroom units or the “sell one, buy two” strategy, have been challenged.
Fundamental Shifts for HDB Upgraders Post-2020:
- Two-Bedroom Condos Gain Family Acceptance: Previously categorized primarily as rental assets, 2-bedroom condo units, particularly those with two bathrooms, are now increasingly accepted as suitable for small families. This shift is evident in the rapid movement of 700 sq ft units priced between $1.8 million and $2 million, seen in developments like Parktown Residence, The Orie, and Lentor Central. The preference for two bathrooms is strong, given its convenience for families and tenants alike. This trend might also be contributing to rising HDB resale prices, as some upgraders may opt for larger or better-located HDB flats over a relatively compact 2-bedroom condo at a high quantum. Looking ahead, reduced resale supply in the fringe regions, coupled with a high concentration of new CCR launches, could further drive demand for resale 2-bedroom units in those areas.
- CCR’s Evolving Buyer Demographic: The Additional Buyer’s Stamp Duty (ABSD) hike in 2023 (to 60% for foreigners) has significantly curbed demand from wealthy foreign buyers, traditionally dominant in the Core Central Region (CCR). This led to a 20% decline in CCR transaction volume in 2024 and a narrowing of the price gap between CCR and Outside Central Region (OCR)/Rest of Central Region (RCR) properties. This shift is also influenced by land sale prices; recent CCR Government Land Sales (GLS) bids are now comparable to those in mature RCR/OCR areas (e.g., Holland Drive at $1,285 psf vs. Lentor at $982 psf). This makes CCR properties relatively more viable for local buyers. However, the CCR still largely lacks heartland-style amenities and school access, which remains a hurdle for many Singaporean families.
- Scarcity of Resale Options: A major challenge for upgraders is the limited availability of resale flats and condos. Many potential sellers are hesitant to sell because the cost of a replacement property, especially a new launch, is too high. Additionally, owners of multiple properties who acquired them before the ABSD hike are reluctant to sell due to the current 20% ABSD if they were to replace their properties. This collective reluctance contributes to a tighter resale supply, forcing buyers into a highly competitive market or towards new launches.
- Shift from Simple Price PSF to Layout Efficiency: The introduction of new Gross Floor Area (GFA) harmonization rules has changed how properties are perceived and valued. Older, pre-harmonization condos often include “useless” spaces like air-con ledges in their total square footage, making their price per square foot (PSF) appear lower. For instance, a $2 million, 1,600 sq ft pre-harmonization condo might be $1,250 psf, while a $2 million, 1,200 sq ft post-harmonization condo (excluding such spaces) is $1,667 psf. This has led buyers to prioritize layout efficiency over simplistic PSF comparisons. Emphasis is now placed on dumbbell layouts (minimizing wasted corridor space), practical kitchen designs, and ensuring bedrooms can accommodate queen-sized beds. Buyers are increasingly discerning, focusing on usable living area rather than misleading total square footage.
- Increased Difficulty in Managing Multiple Mortgages and Financing: The “Sell One, Buy Two” strategy, popular before 2022 where spouses would each purchase a property to avoid ABSD, has become significantly harder. This is due to generally higher property prices and stricter financing conditions. Singapore’s Total Debt Servicing Ratio (TDSR) remains at 55%, meaning total monthly debt repayments cannot exceed 55% of combined monthly income. Coupled with higher interest rates (around 3.7%, with banks using a 4% floor rate for TDSR calculations), financing two homes simultaneously has become a much greater challenge. This suggests a likely future trend where upgraders will increasingly opt for a single, larger condo.
A Note for Sellers: The new generation of upgraders is highly informed and discerning. They are less willing to overpay for inefficient layouts or “paper space” that doesn’t translate into usable living area. This heightened discernment can lead to significant differences in selling prices, even for units of the same size within the same project. While the market currently favors sellers, they should anticipate more demanding buyers.
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.
You May Also Like …
Jayson Ang – January 4, 2025 – Share
Singapore's property market has always been an attractive investment option for international buyers, thanks to its stable economy, strategic location,...
Read More
Jayson Ang – July 29, 2023 – Share
Beyond Marina Bay Sands: Uncovering Singapore's 5 Little-Known Secrets Singapore is a small country with a rich history and culture....
Read More
Jayson Ang – January 8, 2023 – Share
TLDR: Understanding the HDB Market Outlook 2023 The HDB resale market showed resilience in 2022, with significant growth in sales...
Read More
Jayson Ang – November 17, 2024 – Share
Singapore's property market has been a hot topic of discussion for many years, with its resilience and growth attracting both...
Read More
Jayson Ang – February 1, 2025 – Share
Singapore's high-end rental market has been a hot topic of discussion among investors worldwide. With the city-state's robust economy, excellent...
Read More
Jayson Ang – September 2, 2024 – Share
Singapore's property market has always been a hot topic among investors, both local and international. With its strong economy, stable...
Read More
Jayson Ang – July 8, 2023 – Share
Travel Without Worry: The 5 Best Telco Companies For International Roaming In Singapore When it comes to choosing a mobile...
Read More
Jayson Ang – November 1, 2024 – Share
The Singapore real estate market has experienced significant growth in recent years, attracting investors from around the world. As the...
Read More
Jayson Ang – March 14, 2025 – Share
TLDR Determining the best time to sell a newly launched condo involves weighing the benefits of selling before or after...
Read More
Jayson Ang – May 8, 2023 – Share
TLDR Understanding the benefits of long-term home loans is crucial for financially conservative individuals in Singapore. Opting for a longer...
Read More
Jayson Ang – July 6, 2023 – Share
Unforgettable Vacation: The Ultimate Guide To Singapore's 5 Best Hotels It's 五新房产, Singapore is a vibrant and exciting destination, known...
Read More
Jayson Ang – January 20, 2023 – Share
TLDR Understanding Cash Over Valuation (COV) is crucial when buying a resale HDB flat in Singapore. COV is the additional...
Read More
Jayson Ang – June 6, 2023 – Share
5 Things to do When You Go For A Property Viewing In Singapore Here are 5 things to keep in...
Read More
Jayson Ang – June 13, 2025 – Share
TLDR Singapore’s property market is set for significant transformation over the next five years, driven by rapid proptech adoption, growing...
Read More
Jayson Ang – March 21, 2024 – Share
Singapore, a bustling city-state known for its modern architecture and vibrant culture, is also home to some of the most...
Read More
Jayson Ang – June 30, 2023 – Share
Singapore Living: 5 Must-Know Factors for Choosing the Perfect Neighborhood When it comes to purchasing a property in Singapore, the...
Read More
Jayson Ang – July 20, 2024 – Share
TLDR The article covers the shift to SORA for home loan rates, urging consideration of refinancing options amidst rising rates....
Read More
Jayson Ang – April 8, 2025 – Share
Singapore, known as the Garden City, is a bustling metropolis that offers a multitude of parks and nature reserves for...
Read More
Jayson Ang – September 22, 2024 – Share
TLDR When it comes to property ownership, Charles learned valuable lessons through his journey as a youthful homeowner. From opting...
Read More
Jayson Ang – January 12, 2025 – Share
Laser tag has become an increasingly popular activity in Singapore, offering adrenaline-pumping experiences for people of all ages. This exciting...
Read More
