Condominium

S$1 Million Dollar Properties SG: HDB or Condominium

News of $1 million HDB apartments are appearing more frequently in Singapore. This begs the question, why spend S$1 million on an HDB apartment when with that money you can get into the condominium lifestyle? Is it really a wise choice? And what is driving this enthusiasm?

Well, there are many reasons and they may change your perspective on why some people will consider buying a million dollar HDB apartment instead of a condo.

Location of one million properties in Singapore

HDB Apartments

Location Cut Rooms Price (S$) Price per square foot (psf) ($S) Distance from MRT Region
455B Ang Mo Street Kio 44 1216 square feet HDB 4 pieces 1,250,000 1,027.96 690m Rest of Central Region (RCR)
79C Central Toa Payoh 1194 square feet HDB 5 pieces 1,050,000 879.40 280m CPR
219, rue Bichan 23 1572 square feet Executive Maisonette 5 rooms HDB 1,100,000 699.75 720m CPR
53 Havelock Road 1227 square feet HDB 4 pieces 1,100,000 896.50 380m CPR
Pasir Ris One 1130 square feet HDB 4 pieces 1,000,000 884.96 190m Outside the Central Region (OCR)
807 Woodlands Street 81 2034 square feet Jumbo HDB 5 bedrooms 1,080,000 530.97 570m ROCK

From the table above, we can see that 2 important characteristics of million dollar HDBs are that they are either close to the city center (RCR) or they are large apartments like Jumbo HDBs, Executive Apartment (EA) or Executive Maisonette (EM) . Some listings are also very close to MRT stations.

Condominium

Location Cut Rooms Price (S$) Price per square foot (psf) ($S) Distance from MRT Region
Symphonic Suites – Yishun 893 square feet 4 rooms 1,080,000 1,209.41 ROCK
Phoenix Residences – Phoenix 721 square feet 3 pieces 1,086,938 1,507.54 410m ROCK
D’Nest – Pasir Ris 926 square feet 3 pieces 1,150,000 1,241.90 510m ROCK
Rivervale Ridge – Hougang/Punggol 1216 square feet 4 rooms 1,080,000 888.16 200m ROCK
RV Suites – Tanglin/Holland 603 square feet 2 rooms 1,099,000 1,822.55 430m Central Central Region (RCC)
The House – Wood 1,216 square feet 4 rooms 1,180,000 970.39 720m ROCK

The $1 million priced condos are relatively smaller than the similarly priced HDB counterparts. What we noticed is that they are usually found in OCRs and the only CCR in the list is small in size as a compromise.

What type of property is the best investment?

Properties are considered a form of asset that individuals can purchase with a guaranteed return in most cases. There are always sayings that buying a private property is always better than HDB in terms of investment. But is it true?

Condominium

Year 2017 2018 2019 2020 2021 2022
Annual growth (S$) 112,890 -3,590 58,839 19,140 3,062
Percentage change 14% -0.39% 6.0% 2.0% 0.30%

We see that condominiums that are currently worth around $1 million have seen a 23.26% increase over a five-year period from 2017 to present.

HDBs

Singapore Average HDB Price Chart
Year 2017 2018 2019 2020 2021 2022
Annual change (S$) 25 -25,995 -21,705 70,825 47,285
Percentage change 0.0039% -4.11% -3.58% 12% 7.0%

We find that areas with HDB apartments worth around S$1 million have seen an 11.13% increase over a five-year period from 2017 to present. The data source is a comparison of average median prices in the area, which is not entirely indicative of these million dollar apartments. However, it is still reasonable to estimate that the increase in value is even less than that of similarly priced condominiums.

Beyond this conclusion, when buying an HDB apartment, there is a minimum occupancy period of 5 years and 10 years for HDB apartments in prime locations. With the various cooling measures being put in place periodically, HDB apartments are less suited to be investment options. This is supported by the fact that HDB apartments are social housing and are not meant to be an investment option.

So why would anyone buy a million dollar HDB apartment?

Price: initial cost and maintenance cost

Cost is a big factor because it’s just easier to find a more affordable HDB apartment. With condominiums, the buying process will be more difficult and sellers are often reluctant to let go at a good price.

Additionally, there are maintenance fees, which can be quite expensive for some people to bear, given the amount of usage. Some may not be in the habit of swimming or barbecuing very often, resulting in underutilized charges.

If you don’t own a car, this will also be another underutilized benefit as there is a free parking space for each unit. For an HDB apartment, you can buy a seasonal parking pass, which will cost you S$80-110. Non-car owners will definitely benefit from a stay at HDB apartments.

Home insurance for a condo is also more expensive than for a similar HDB apartment.

HDB loan or bank loan?

With an HDB apartment, you can get an HDB loan for the resale apartment. This opens up more financing options compared to co-ownership where you are limited to bank loans only. The loan to value (LTV) ratio for HDB loans is higher, up to 85% compared to bank loans which typically offer up to 75%. With the problem of rising interest rates and concerns about rising home loans, some may find the option of financing an HDB more attractive.

If you’re considering getting a bank loan for your new home purchase, check out our guide to finding the best home loan for you.

Kitchen in an apartment

Space

By opting for an HDB apartment instead of a condominium, you can get a much larger home. The list of condominiums mentioned above average less than 1000 square feet, while the listed HDB apartments are above 1000 square feet. If you are ready to live in OCR, you can find large HDB apartments of 1500 square feet and more. This is suitable for people who have large families or need extra space.

Convenience

At this price, you will be able to find HDB apartments in the RCR, which is on average less than 20-30 minutes from the city. If you work or frequent the central region, this is a very big advantage. Also, being in CPR means you are relatively centrally located and can reach any part of Singapore with a shorter travel time.

Condominiums at this price are mostly located in OCR. This means that the journey time will be longer if you are traveling outside your region. There is a CCR condominium on the list. However, the condo size is 600 square feet, which is about half or less of an equivalent HDB apartment. This may not be the most auspicious housing option for most.

Upgrade or downgrade path

If you bought a condo and want to move to an HDB apartment, this move will come with some hurdles. You will have to sell your condo and wait 30 months before you can apply for an HDB apartment.

On the other hand, upgrading from HDB to condo is a much easier process, without having to wait for the 30 months to pass.

Housing subsidies

First-time buyers of resale apartments can receive grants of S$50,000 CPF Housing Grant for a 4-room apartment or smaller and S$40,000 CPF Housing Grant for a 5-room apartment or more. Those who live close to their parents or married children can apply for a neighborhood housing subsidy of up to S$30,000.

Warm lighting in the living room

When should you consider a condo?

There are some advantages to getting a condo at this price if you can deal with the small size and inconvenient location.

Some couples may earn more than the income limit for a housing subsidy. Under the revised income cap, household income cannot exceed S$14,000 to receive a grant. This may lead them to look to private properties like a condominium for a better deal.

Privacy and security are perhaps the biggest selling point of a condominium. There will be a security check and the areas will also be closed. Not being bothered by sales agents and being able to let your young children go to the playground alone without worry is a big plus for many.

There are also larger “non-chargeable spaces” like balconies, first floor exclusives – private enclosed spaces (PES).

Amenities such as swimming pools, gymnasiums and barbecue areas are also a plus for people who frequent these facilities.

Conclusion

With these pros and cons stated, there is a strong selling point for the S$1 million HDB apartment. The HDB apartment will be for the size and convenience conscious individual, while the condo appeals to the affluent who want a quiet, convenient lifestyle.

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