HDB vs Condo: The Battle of Million-Dollar Homes

As the demand for housing in Singapore increases, million-dollar HDB apartments are becoming a standard in the housing market. A new report will emerge about another record-breaking public housing transaction every few months, showing that HDB prices are on an upward trend. The highest transacted HDB to date is a 5-room apartment in Queenstown, Margaret Drive, which sold for a staggering $1.73 million on 22 July 2024. This surpasses the previous all-time high of $1.58 million for a 5-room unit in Tiong Bahru, transacted just a month earlier. Find out what a veteran property agent thinks about the situation here.

Is my HDB home worth a million dollars?

So, the million-dollar question: How do I know if my HDB is worth a million dollars? The answer is rather simple - look at your neighbours. Senior Associate Director Aaron Oon from PropNex urges sellers to look at past transactions done in the same block and use that as their benchmark. “Should someone sell their flat in your block at $900,000, if you have a higher floor, better renovation done, good views or have a corner unit, these are selling points which could boost your home into the million dollar range,” he says. Location is also an unmissable factor, people will pay a premium to be close to the city or certain postcodes, such as Toa Payoh, Kallang/Whampoa and Bukit Merah, which are the neighbourhoods with the most number of million-dollar HDBs.

Given the availability of condominiums priced below a million dollars in some regions of Singapore, one might wonder: why choose a HDB instead? Before we get into the nitty-gritty, here is an overview of some differences in HDBs and condominiums:

Why people are still flocking to HDBs

Location and nearby amenities

Using the example of the $1.73 million unit, it belongs to SkyOasis @ Dawson and is a prime example of the high demand for well-located properties. This complex is a mere 4-minute walk from Queenstown MRT station and less than 200 meters from Queenstown Primary School. Amenities are abound, with multiple supermarkets and the Queenstown Public Library within walking distance. Additionally, the National University of Singapore is just a 10-minute drive away, and homeowners enjoy unparalleled access to popular southern areas such as VivoCity and Sentosa. HDBs in neighbourhoods that are already mature have a slew of amenities already built up which can surpass that of a condominium. Hence, the strategic location of SkyOasis @ Dawson is a significant pull factor, especially for families with children due to its proximity to public transport and schools.

Lower Maintenance Fees

HDB owners pay a nominal sum monthly to the town council for estate upkeep, known as Service and Conservancy Charges (S&CC). These charges fund lift upgrading, block repainting, and general area maintenance. For Singaporean owners, this sum is subsidised, costing less than $100 a month. Additionally, the government rolls out rebates for S&CC with quarterly rebates rolled out. This year, the subsidies offset between 1.5 and 3.5 months of S&CC for eligible households. Condominium maintenance fees range from $300 to $1,000, depending on the project’s facilities. The more facilities a condominium has, the higher the maintenance fees, making HDBs a more economical choice. Hence, while you may like the jacuzzi spa that your condominium offers, that also means that it may cost more as it will be factored into your maintenance fee. On top of that, upgrading and maintenance of your HDB estate is governed by the town council which Ministers of Parliament lead. In contrast, condominiums answer to their respective Management Corporation Strata Title (MCST) which are made up of the management council initially and other condo dwellers.

Bigger Space

Condominiums, particularly new projects, are shrinking in size. A quick search shows that a 3-bedroom HDB in Tiong Bahru can sell for $950,000, while a 3-bedroom condominium one road away costs almost $1.5 million, with a smaller square footage. In land-scarce Singapore, having more room is crucial, especially for families. This makes HDBs more attractive, particularly Executive Apartments or 5-room flats, which are rare in condominiums.

Aaron maintains that this is still the biggest factor for Singaporeans when choosing a home. He explains that amenities and capital appreciation aside, size matters because these million-dollar HDBs are around 1200-1600 sq ft, which can fit a family of five comfortably. Hence in this case, people would rather spend $1 million on a HDB compared to over $2 or 3 million on a condo of the same size. 

Financial Considerations

The payment schemes for public versus private housing differ significantly, influencing some to choose HDBs. HDBs are designed to be more affordable and accessible for the average Singaporean, with several schemes to assist with repayment. Buying a resale HDB requires only a 15% downpayment and offers fixed interest rates of around 2.6% with a HDB loan. Conversely, purchasing private condominiums necessitates bank loans with fluctuating market rates and a minimum 25% downpayment. This requires greater financial prudence, making HDBs a more stable and less financially burdensome option.

Vibrant Community

Growing up in a HDB estate, I once envied peers living in prestigious condominiums. However, like many Singaporeans, I have come to appreciate the vibrant community spirit that HDBs embody. I value the proximity to hawker centres, the friendly neighbourhood interactions, and the sight of children playing in communal areas. Most HDB estates have matured over time, offering extensive amenities that cater to residents’ needs. This is not to discount that condominiums do not have bustling communities of their own, but HDBs have been our nation’s bread and butter since the genesis of our country and our culture is ultimately intertwined with it.

The Appeal of Condominiums

Built-in Amenities

Condominiums offer a range of amenities such as gyms, swimming pools, function rooms, and BBQ pits. Some condominiums have pushed the envelope by having a bowling alley, like the one in City Square Residences, a golf driving range that is in Fulcrum and a boxing ring in The Florence Residences. These amenities reduce expenditure on external facilities and add convenience. For instance, hosting parties is more comfortable with access to function rooms and BBQ pits within the residence.

Security

A big draw factor for condominiums is the security offered, which is a valid concern for some. You are unable to access certain levels of a condominium unless you are a resident which greatly reduces the risk of strangers loitering around. Security guards and guardhouses also are another form of deterrence which keep suspicious individuals at bay, which is important for those with young children. The privacy and safeguards that a condominium can provide is a strong enough factor for one to choose a private property.

Capital Appreciation

Only 17.2% of Singaporeans live in condominiums whereas 77.8% live in HDBs. As such, the limited supply of this asset class drives up the demand and price. Additionally, foreigners are not able to buy HDBs, hence most of them will look at condominiums straight off the bat and you will enjoy a bigger pool of buyers. People looking to upgrade from their BTOs may also look at condominiums in their vicinity, which poses as a good exit strategy for those living in these condominiums. Capital gains for condominiums have been reported at 30% as of January 2024 with a median capital gain of $353,000 for resale condos for the same month. This has been an upward trend. While capital gains may differ depending on the region as some postcodes are more highly sought after, there has been an upward trend in the valuation of a condominium for the past few years and it is not slowing down.

Ultimately, there is no perfect argument as to which asset class is better. It boils down to your preferences when it comes to choosing a home. For some, it’s simply a place to rest their head at night, while for others, it’s a symbol of success and financial stability. Both perspectives are valid, but the key is to find a balance that works for you financially without overspending on a property.