Buying a HDB flat vs condominium
By: Money Pit Digger
Tags: Hdb Resale Flats, Hdb Bto Flats, Singapore, Condominiums

For our next move, we had the choice of either continuing to stay in public housing or “upgrading” to a private property.

Condominium prices have been skyrocketing in Merlion City for many years. To purchase a condominium that is bigger than our current flat in a good location would have cost us an arm and leg. Wanna hazard a guess on exactly whose arm and leg are on the line? The last I checked, I do not have mutant healing powers that would allow me to regenerate limbs à la Wolverine or Deadpool.

In any case, The Wife does not think it makes sense to pay a significant purchase premium and high monthly maintenance fees for condominium facilities — swimming pool, gymnasium, function room, barbecue pit, etc. — that we will never use.

I would probably attach some value to the associated 24/7 security but I am not about to incur a lot of housing debt just to feel more “secure”. Bartering certain financial insecurity for uncertain physical security does not seem like a fair trade.

Some people do buy condominiums solely because they think that it means that they have “made it in life” and they will henceforth be of a high social-economic status (SES). I suppose if their egos are not self-inflating fast enough, and they think that accumulating material possessions can make them sleep better at night, everyone has the right to do what they want with the money they have or do not have.

Of course, there is an investment angle as well but knowing exactly when and where to buy is crucial and it takes too much effort in my opinion.

While we are technically eligible to purchase a second Build-to-Order (BTO) flat from the Housing & Development Board (HDB), it would mean a long wait of three to four years. The waiting time has now increased to up to five years due to safety measures imposed in construction sites in the wake of Covid-19.

Moreover, we would have to wait for a BTO development to be launched in a mature estate and vie against thousands of applicants in a ballot exercise that tends to favour first-timers. There is definitely no guarantee that we would secure a new flat that is both in a good stack and on a reasonably high floor.

It would seem then that purchasing a resale HDB flat from the open market was our only viable option left. While resale flat prices have soared in recent years, there is ample supply in the market to meet most buyers’ requirements and budgets.

When a HDB resale flat first transacted at S$1 million in 2012, many people were shocked. By now, it is no longer considered big news as several units cross the threshold each year. There were 64 such units in 2019 and 72 units between January and November in 2020.

While HDB flats are different from condominiums in some ways, it is interesting to note what S$1 million can get. With S$1 million, one would probably only be able to buy a one-bedroom or two-bedroom condominium in an Outside Central Region (OCR) location.

In contrast, S$1 million can buy the best of what public housing has to offer — a HDB resale flat that has a significantly larger floor area and an optimal unit layout and is on the highest floor within the best stack. It would typically be within a mature estate that has an abundance of amenities and is easily accessible by most transport options.

The search thus began.