5 Reasons : Why Investing In Singapore’s Property Market Can Be A Good Retirement Plan
Investing in Singapore's property market can be a good retirement plan for several reasons. Here are five key factors that...
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 …
Top 5 : Most Profitable Neighborhoods To Invest In For Singapore Property Investment 2025
As the global economy continues to recover, the real estate market in Singapore remains a promising investment opportunity for savvy...
Read More
Beyond Buying: Innovative Strategies for Property Investment Success
TLDR The world of property investment and real estate trends offers vast opportunities. Stay informed with effective property investment strategies...
Read More
The Surprising Truths of Home Ownership: How Health Challenges Led a Homeowner to Relocate
When thinking about staircases, light switch locations, selling our home, and similar topics, many plan for retirement, assuming these issues...
Read More
Mortgage Interest : The True Cost of Buying and Owning Properties in Singapore
TLDR When considering buying a property in Singapore, it's crucial to understand the true costs and risks involved. High monthly...
Read More
Freehold Properties vs Leasehold Properties: Which is Better?
TLDR When it comes to property investments in Singapore, understanding the differences between leasehold and freehold properties is crucial. This...
Read More
Investing in Singapore Real Estate as a Foreigner
TLDR The blog post discusses the rules and regulations for foreign investors looking to purchase real estate in Singapore. It...
Read More
Is The Condo Dream Getting Increasingly Harder To Achieve For Singaporeans?
TLDR Condominium prices in Singapore have nearly doubled over the past 15 years, with new launches now averaging around $2,390...
Read More
Top 5 Surprising Benefits of Investing in Singapore Real Estate for Foreigners
Singapore, a thriving city-state in Southeast Asia, has become an attractive destination for foreign investors looking to diversify their investment...
Read More
From Overseas to Singapore Property: 5 Steps Guide to Remitting Funds
From Overseas to Singapore Property: 5 Steps Guide to Remitting Funds 1. The first step in remitting money to Singapore...
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 Real Impact of Industrial Areas on Condo Prices: A Tale of Two Towns
TLDR A case study comparing condos near light industrial areas in Yishun and Bishan found that proximity to these zones...
Read More
2024 Will Be A Buyers Market
TLDR 2023 saw a roller-coaster ride in the real estate market, with various challenges like high interest rates and geopolitical...
Read More
A Executive Summary Guide to the Singapore Real Estate Market 2023 and Beyond …
TLDR The Singapore real estate market is vibrant, driven by a strong economy, stable business climate, and attractive investment opportunities....
Read More
5 Must-Know Questions Before Investing in Real Estate
TLDR When considering whether to buy a new development or a resale property, it can be challenging. In the blog...
Read More
5 Neighbourhoods Poised to Benefit Most from the URA Draft Master Plan 2025
TLDR Singapore’s URA Draft Master Plan 2025 outlines major urban redevelopment with 80,000 new homes across 10 estates. Key growth...
Read More
Building A World-Class Nation: Top 5 Facts About Singapore’s Developed Infrastructure
Building A World-Class Nation: Top 5 Facts About Singapore's Developed Infrastructure Singapore is known for its high standard of living,...
Read More
Unseen Dangers of Putting Your Money in Upscale Freehold Properties in Singapore
TLDR Luxury freehold properties in Singapore may not always be the lucrative investment opportunities they appear to be. High-end properties...
Read More
Buy a $1M Resale HDB or a $1M Resale Condo?
TLDR When comparing a million-dollar HDB flat to a private property of the same value, the HDB flat offers more...
Read More
5 Things to Know About the Singapore Property Tax System
5 Things to Know About the Singapore Property Tax System Here are 5 things you need to know about the...
Read More