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  • Writer's pictureJoshua Loo

Should You Upgrade from an HDB Flat to a Private Condo?

Updated: Aug 30, 2020

Upgrading from an HDB to Private Condominium is by no means a new method for accumulating wealth through a hard asset like real estate. After all, it has been promoted by plenty of property agents since the early days of Singapore’s nation-building.

I have given ample thought into the issue and had initially refrained from writing an article on this subject matter as I believe it has already been covered in depth by many property blogs and agents. The whole HDB vs private property argument has been thoroughly discussed by many agents. If you are interested in proceeding with the steps to take in regards to making your private property purchase, do contact me via WhatsApp.

Instead, I took the time to write an article which details the journey from buying an Executive Condominium (EC) and upgrading to a private landed property as the topic is highly unusual and there has little information online in regards to this.

However, I have decided to revisit the topic of upgrading from an HDB to Private Condominium as from my experience as a property agent so far has shown me that the general public is pretty adverse to the risks involved and if the reasons to invest in a private condo are worth it.

This article will present to you, not the “hows”, but the “whys” and “why nots” to this idea. Certain abstract ideas will be mentioned to illustrate some points. It might not be exactly representative of your current financial situation, but I do hope that they present you with good food for thought moments.

Monetary Gain

Understand why upgrading from an HDB flat to a Private Condominium will bring you profits in the long run.

The best way I can explain this simply is through two instruments. A paper band and a rubber band.

Holding Power of Real Estate Explained Rubber Band

Holding Power of Real Estate Explained Paper Band

These two instruments represent the HDB flat and Private Condominiums respectively. Both are of equal length and thickness.

As you know, a paper band and a rubber band have different properties and its optimal function differs.

Firstly, let us talk about elasticity. The elasticity of both these instruments symbolizes government policies that are set in place for housing. A rubber band is more elastic than a paper band. This allows more bills to be fitted within the same stack before it breaks. Your intention to cram more dollar bills within this stack could be your capacity to leverage.

Note that my use of the word leverage does not necessarily mean to borrowed capital, but also to maximizing capital gains.

How Private Properties Help You Gain Money

In a literal sense, private properties enable the homeowner a greater degree of flexibility in the method of holding their cash in these assets. With these greater degrees of flexibility set by governmental policies, however, brings an increased amount of risk.

For example, huge sums of capital investment can be placed with private properties. However, without a proper understanding of government policies and the present market (i.e. understanding your rubber band), you might lose money.

Such an example can be not thoroughly understanding the implications of Additional Buyer Stamp Duties (ABSD), property taxes, bank mortgages, and much more.

Now, About HDB Flats

As represented by the paper band, the amount of cash you can hold within the paper band (i.e. HDB flat) is severely limited due to the lack of elasticity. There is little room for capital appreciation when you purchase an HDB flat.

This is due to limitations set such as the minimum occupation period (MOP), income ceilings for Build-To-Order (BTO) flats, rental restrictions, and much more. Because of the above reasons, HDB flats poorly appreciate over time as compared to private properties.

Private vs HDB Housing Prices

Some limitations in the illustrations are present, such as the durability of the instruments. My initial idea was to represent HDB flats with the use of a string, but there is no stock image present on the internet with that. A string will represent a far more durable mode of holding.

In this aspect of durability, HDB flats make for a more stable investment as its owners are protected against losing their flat. With CPF funds usage, homeowners of HDB flats are automatically enrolled in the Home Protection Scheme (HPS). In the case of bankruptcy, the HDB flat will not be seized by creditors. This is not the same should you decide to invest in a private condo.

Why You Should Not Upgrade

Reduced Loan-To-Valuation (LTV)

If the LTV that you have received from the banks is severely limited, seek out a trusted co-borrower (i.e. spouse or children) so as to obtain a more favorable LTV.

Upgrading to a private condominium still requires you to leverage on a mortgage. Once granted, you are required to make repayments monthly. If you do not have the necessary reserves to tide you through financially challenging situations, it is best to wait until your financial situation is improved before proceeding.

Service & Conservancy Charges (S&CC) Vs Maintenance Fees

Other than the increased monthly repayment from your mortgage, you are required to pay for maintenance fees of the private condominium quarterly. As compared to HDBs $20-$90/month, private condominium maintenance fees can reach as high as $1000/month!

Poor Investments

Some private condominiums might simply be a bad investment. In this case, even holding onto your HDB might be a better choice as compared to upgrading. One trait of a bad purchase that I usually notice is clusters of new launches entering the Temporary Occupation Permit (TOP) within a very close timeframe.

This can be easily spotted by referring to the URA Master Plan for new launches which might be planned close to your intended purchase.

Another would be more in regards to being buyers being swayed by marketing terms such as “en-bloc” property, “below valuation”, and many others. Buyers will have to view objectively behind the meanings of these terms. “En-bloc” might mean aging property and “below valuation” could be due to other cryptic reasons.

Granted, there is still real estate which is being marketed with these terms which actually carry its weight, but always be well-advised before proceeding.

In regards to choosing a good property, check out my article here for more information.

Financial Downturns

This is a tricky question to answer, as I believe that it ultimately depends on your financial risk appetite. As the famous saying that is quoted by Warren Buffet “Be fearful when others are greedy, and greedy when others are fearful”. I believe that this applies similarly to real estate.

No doubt in all recessions that housing prices will fall, however, it is always more advantageous to make a purchase while prices are suppressed instead of waiting for housing prices to bottom out. You might stand to miss out should prices recovery quicker than you can anticipate.

I believe that property prices will continue to increase in the long run, as seen from past sales transactions of Singapore properties.


As you can see, most of the reasons why you should upgrade mostly revolve around financial matters, and maintaining good cash flow for your purchases.

However, there are some skeletons in the closet that most real estate agents avoid such as the housing markets in Australia and Hong Kong.

I’ve explained in another article in which why Singapore properties remain resilient, check it out here. With all these housing policies which are set in place, this prevents property prices from unjustified fluctuation.

Still, it is important to mention that you should not make any real estate investments that you are not comfortable with.

The main takeaway from my article is buying a private property enables you to make good monetary gain through capital appreciation. However, always exercise caution and conservancy towards any purchase and think of the long-term implications in regards to monthly payments, which are often the last thing on a buyers’ mind.


Ready for a discussion on your upgrading plans? Making such a monumental leap requires a sound financial plan, and I can help. Feel free to contact me at +6596329840 or I will provide for you a full breakdown into the property details and provide for you a complete property wealth planning.

The views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee, or other group or individual. The author does not accept any responsibility whatsoever for any harm or loss arising from accessing or relying on information contained in this blog post.

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