Navigating Property Purchases in Singapore: Why Going Without an Agent Can Be Risky
TLDR Many homebuyers hesitate to engage their own real estate agent due to misconceptions about costs and conflicts of interest....
Read More
The Evolving Landscape of HDB Upgrading in Post-COVID Singapore
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 …
3 Property Owners Reveal Their Major Mistakes: The Pitfalls of Ill-timed Home Sales
TLDR When it comes to navigating the ups and downs of the Singapore property market, timing is crucial. Three real-life...
Read More
Top 5 Reasons : Why Singapore’s Property Market Is the Best Place to Invest for Long-Term Growth – Expert Analysis!
TLDR Singapore’s property market stands out for long-term investment due to its strong economy, stable government policies, high rental demand,...
Read More
Top 5 Factors to Look for in a Property Developer
With a highly competitive property market, it's crucial to choose a property developer that you can trust to deliver quality...
Read More
What to Do Before Exercising Option to Purchase?
TLDR Home buyers are advised to thoroughly research property values using online tools, secure an ideal home loan package early...
Read More
4 Simple Strategies to Help Future Homeowners Save Money
TLDR When it comes to being a new homeowner, it's essential to prioritize regular maintenance to avoid costly repairs down...
Read More
Why Selling Your Own HDB Flat May Be More Challenging Than You Anticipate: 7 Hidden Challenges to Prepare For
TLDR Selling your flat can be a daunting task, not because of the paperwork but due to challenges in marketing...
Read More
Upgrading to a Condo by Age 35: A Feasible Goal for the Average Singaporean in 2025?
TLDR Upgrading from an HDB flat to a condo by age 35 is technically feasible for median-income Singaporeans, but only...
Read More
The 5 Hottest Neighborhoods in Singapore for Real Estate Investment
Hey everyone! Today I want to share with you the 5 hottest neighborhoods in Singapore for real estate investment. These...
Read More
Is Price Per Square Foot (PSF) Still a Reliable Metric in Singapore’s Property Market?
TLDR Price Per Square Foot (PSF) is increasingly a poor measure of property value in Singapore due to regulatory changes...
Read More
Are We Going Into Recession? What It Means for You—and Singapore Property
TLDR Singapore faces rising recession risks as global trade slows, with GDP contraction and cautious sentiment signaling economic headwinds. For...
Read More
Three Singaporeans Share Their Experiences of Co-Owning a Property with Friends
TLDR In Singapore, some individuals venture into property investments with unrelated partners, driven by opportunities and personal circumstances. Jim, leaving...
Read More
Can Your HDB Flat Safeguard Your Retirement?
TLDR The HDB market has seen significant changes over the years, with many young owners looking to upgrade to private...
Read More
Simplified Guide to Buying Landed Property in Singapore
TLDR When considering buying a landed property in Singapore, you have options like terrace homes, semi-detached houses, and bungalows. Understanding...
Read More
The COV Conundrum: Navigating Singapore’s Property Premium
TLDR Cash Over Valuation (COV) is the difference between a property's official valuation and the price a buyer is willing...
Read More
Top 5 Best Alternative Music Venues in Singapore
Singapore, a vibrant and bustling city-state, is known for its diverse culture and thriving arts scene. The city's love for...
Read More
Top 5 Things to Do in Singapore on a Rainy Day
Singapore, the beautiful island city-state, is known for its sunny weather and stunning attractions. However, even in this tropical paradise,...
Read More
The Psychology of Property Investing: 5 Reasons Why Singaporeans Love Real Estate
Real estate investing has always been a popular way to grow wealth and secure financial stability. In Singapore, the love...
Read More
Beware! Spot These Warning Signs Before Making a Home Purchase!
TLDR When purchasing a property in Singapore, it is crucial to thoroughly assess various aspects of the home to avoid...
Read More
Can You Still Make Money from Older Freehold Condos in Singapore
TLDR While freehold condos might seem like a solid investment, the rise of new developments and aging buildings cast doubt...
Read More