upgrade from hdb to condo

As 2023 comes to an end, home loan interest rates are up, and private home prices are higher than they were in previous years (although frankly, home prices rising is something that can be said of most years). This has led some HDB upgraders to reconsider their motives: in light of higher costs, is it still worth making the jump to a private, non-landed property?

There’s no single answer that’s right for everyone; but here are some of the main considerations, in making your decision:

Can I Afford To Upgrade from an HDB To A Condo In 2024?

Before we decide if it’s worth doing, we need to consider if it’s even practical, or the numbers involved.

Let’s look at average new launch prices, as we head into 2024. As I write this, we are nearing the end of December 2023:

new launches prices
Prices of new homes

As we can see, prices of new launches have slowed over the past quarter, with new launch prices averaging $2,136 psf.

Resale condos have seen a sharper spike in end-December 2023, but this is somewhat expected; with new launch prices being so high, I would expect more upgraders to be looking for resale options. As an aside, there were a lot of new launches in 2023; and there is a knock-on effect where new launches will also pull up the prices of nearby resale condos.

Even with the uptick, resale condos average just $1,645 psf.

We’ll use a three-bedder condo as an example for HDB upgraders

A three-bedder condo is roughly around 1,000 sq. ft. We use this size because, practically speaking, most HDB upgraders are families; so one and two-bedders are considered too small. Also, most families do not like to “upgrade” into anything smaller than a 4-room flat (around 900+ sq. ft.), especially if their former flat was bigger.

So for a new launch condo, an upgrader would be looking at a quantum of about $2.1 million, while a resale condo might have a quantum of around $1.6 million.

How viable is it to upgrade? Let’s take a look:

cost of buying a condo

Cost for upgrading from an HDB to a resale condo:

The average cost of a three-bedder, resale unit is about $1.6 million. We will assume the upgrader has sale proceeds of around $600,000*, after selling their flat. This means they need to bridge an amount of about $1 million.

The initial down payment, assuming a maximum loan quantum, is 25% of the property price. This means they need $80,000 in cash, plus $320,000 in cash or CPF. After paying this amount ($400,000), they’re still left with $200,000 in cash from the sale of their flat.

The remaining loan they need is $800,000. Assuming a floor rate of 4%, and a 25-year loan tenure, this comes to about $4,223 per month. Assuming a TDSR limit of 55%, this requires the borrowers to have a combined income of at least around $7,600

Cost for upgrading from an HDB to a new launch condo:

This is much tougher, as the average quantum is now around $2.1 million. Again, we’ll assume the previous flat was sold at $600,000*.

The required down payment is (first 5%) $105,000, followed by (next 20%) $420,000 in cash and / or CPF. After paying this amount, they will have only $75,000 left.

Assuming they pay the $75,000 into the property as well, they still need a loan quantum of $1.5 million

At a 4% interest rate, assuming a 25-year loan tenure, the monthly loan repayment is around $7,920 per month. This would require a minimum combined income of about $14,400 per month

You can see that, barring big developer discounts, the majority of HDB upgraders in 2024 will be much more comfortable with resale condo prices; but for those who have higher-value flats to sell (e.g., DBSS flats, flats at Pinnacle @ Duxton), the sale proceeds may be sufficient to bridge the gap to even a new launch condo. 

*For simplicity’s sake, we will assume they have no outstanding home loan, and a sufficient amount in cash for the down payment. There are also other costs, such as stamp duty, agent’s fee and legal fee, which are not factored in here. For a more complex breakdown, do reach out to me and I can help you work out the numbers specific to your situation. 

Is upgrading from HDB to condo worth the cost?

This will depend on the following factors:

  • Your ability to cope with the higher interest rates going forward
  • The role that the condo will play in your retirement
  • For younger buyers, potential delays in right-sizing
  • Whether you see value in cash-out refinancing as an option
  • The condo as a “safety margin”

1. Your ability to cope with the higher interest rates going forward

Singapore home loans are based on SORA rates. It’s a combination of your bank’s spread, plus the underlying three or one-month SORA rate (these are the most common home loan packages). 

The higher the SORA rate, the higher your home loan interest. You can check historical rates here. SORA rates as of end-December 2022 were at 2.9%, but they reached over 3.7% as of end-2023.

The rate hikes are expected to slow in 2024, but they’re still likely to head upward in the near-term. Rates are also nothing like what we saw in the pre-Covid period, where 2% was the norm. 

That being said, note that the floor rate for the TDSR (see above) assumes a 4% interest rate, which is already higher than the average rate – so if you can pass the TDSR, odds are you can handle the higher interest.

2. The role that the condo will play in your retirement

When it comes to resale gains, private homes still have a clear edge.

Over a 10-year period, private home prices (resale only) rose between $1,259 psf to $1,645 psf. This is an increase of about 30.6%.

Prices of resale condos over the last 10 years

In the same time frame, HDB flat prices rose from $461 psf to $571 psf. This is an increase of about 23.8%:

HDB prices over the last 10 years

We also need to consider that Singapore has an ageing population and that non-Singaporeans cannot buy HDB flats. By the year 2030, about ¼ of all Singaporeans will be aged 65 and older.

Consider that when the next generation passes on, there will be a lot of vacant HDB flats. Children probably cannot inherit these from their parents, as you cannot own more than one HDB flat. At the same time, non-Singaporeans cannot absorb this supply of leftover flats.

In such a high-supply-lower-demand scenario, there’s a serious risk that HDB flats will no longer see the appreciation they have in past decades.

So for those thinking long-term and into retirement, this is a factor worth considering.

3. For younger buyers, potential delays in right-sizing

If you are below the age of 55, and you sell off a private home, you’ll need to wait 15 months before you can buy a resale flat (for a BTO flat, you need to wait 30 months). This does not apply to those aged 55 and above, including their spouses, who are moving to a 4-room or smaller resale flat.

This is a serious consideration for younger upgraders. If you make the jump to private, and later find you cannot sustain the costs, you will have a problem downgrading to a flat again. Even after liquidating the condo, you may incur additional costs in the form of rental needs, while waiting to be able to secure a flat.

As such, those who are not in a financially stable situation may not find the risk to be acceptable.

In general, it’s best to upgrade only if the monthly loan amount is kept to around 30% of your monthly income (even if the TDSR allows for more).

Also, if possible, leave enough money in your CPF funds to tide you over at least a year (longer the better) in case you are out of job for a while.

4. Whether you see value in cash-out refinancing as an option

One lesser-known advantage of owning a private property is cash-out refinancing*. This allows you to take out a loan against your property, at a much lower interest rate than personal loans, credit cards, etc. 

You might, for instance, be able to borrow up to 75% of your property value, minus your CPF usage. As of 2024, most banks would have an interest rate that’s broadly similar to mortgage rates. 

Taking out even a 50% loan against a $1.6 million resale condo is quite sizeable: it can fund a child’s overseas education, or start a business venture, without the high interest of many private education loans, business loans, etc. 

It can also be seen as a way to monetise your property, without having to sell or rent it. 

*Read my article on Wealth Accumulation Through Equity Loan 

5. The condo as a “safety margin”

If you have a private home, and your financial situation turns bad, you can at least right-size back to an HDB flat. In this sense, the condo acts as a safety margin of last resort. 

If you have an HDB flat, your only choice is to right-size to a smaller flat; and it’s likely that the proceeds are slim, and may not get you out of your financial complications. 

As such, some buyers find emotional peace-of-mind, in knowing that their home can provide for them in alternative ways. This can be a strong motivation to upgrade, more so than factors like having a nice pool or view. 

In essence, those who view their property as being an investment, retirement asset, or fallback are still likely to derive value from upgrading. However, as of 2024, the combination of higher interest and prices unfortunately restricts this possibility. 

It’s likely homeowners who have higher-value flats, or paid-up properties, who are in a stronger position to upgrade. For those who have just started with their first home, a longer period of disciplined savings may be necessary, before they make the leap. 

In addition, given the higher quantum of new launches, a better question may be: is it worth upgrading to a new launch condo?  This is likely to be an issue that upgraders will grapple with, in the coming year. 

For a personalised look at whether you should upgrade, do contact me for a consultation.

danny han pwp

Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.


Danny has a genuine interest in people and firmly believes in personal integrity. While helping homeowners with their property needs, their interest always takes precedence over his personal gains. Hence, Danny has consistently earned his clients’ complete trust and loyalty. Many of them have become his personal friends.


Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.


Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker. 

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