Upgrading From HDB to Condo – Pros and Cons

Alevin Chan

Alevin Chan

Last updated 21 February, 2023

That long-cherished dream of upgrading from a HDB flat to a condo unit may have to wait, given the formidable financial hurdles that stand in the way. Here’s an honest look at the pros and cons of upgrading from public housing to private developments in 2023. 

Singaporeans just can’t seem to resist the siren call of the condo, fostering a nation-wide obsession with upgrading at all costs. 

Just look at the never-ending parade of new launch condos and Executive Condos that invade every Youtube ad these days. (Or maybe I’m just being targeted by the algo because of the research I do for articles like this one.)

In all fairness, condominiums do have an understandable allure – who doesn't want to live in a fancy home with nice surroundings, high-end amenities and an address in the nice part of town? 

However, things are a little different this year, and homeowners seeking to upgrade need to consider carefully instead of blindly pushing ahead with their plans. 

Here’s a frank look at the pros and cons of upgrading from a HDB flat to a condominium in 2023. 

Pros of upgrading to a condo

Skip the wait for BTOs

As you’ve probably heard, the COVID-19 pandemic caused multiple BTO projects to be delayed. As of Jan 2023, there are still 40% of BTO projects that are behind schedule, and clearing the backlog is expected to take as long as two years.

Because you can’t simply create manpower, raw material and construction machinery out of thin air, this delay also creates a knock-on effect on future BTO launches – i.e., there will be less BTOs available for a good while. 

Hence, those seeking homes may find themselves having to wait longer than originally planned to fulfil their homeownership goals. 

Due to this unusual development, upgrading to a condominium now has a practical benefit attached. 

When before the choice was merely aspirational, choosing to upgrade to a condo in 2023 will allow you to skip the BTO crunch and get on with your life plans. 

Avoid HDB rules

Another advantage of upgrading to a condo is that you can free yourself of the HDB rules. 

For instance, you can have as many pets as you want – including multiple dogs and, yes, cats! You no longer have to abide by HDB’s archaic rules like “no cats allowed” and “one dog per unit” and “only dogs under a certain size or belonging to certain breeds”, which is great news for pet lovers.

Also, you do not have to observe things like Minimum Occupancy Period, which restricts you from selling your HDB flat until you have physically lived in it for at least five years.  

There is also no Ethnic Integration Policy quota to observe, so you are free to sell your condo unit down the line to any eligible buyer from any race.

All these mean you have greater say over how you use your property as an asset.

Elevate your living environment

Undeniably, condominiums offer an elevated living environment to those blessed enough to partake of it. 

Whether it’s the exclusivity of a gated community, more pleasant surroundings, easy availability of lifestyle amenities or even just being located in a prime district, upgrading to a condo can foster a sense of pride and self-esteem and make your life feel better.

Granted, this benefit is less tangible than practical, but the fact remains that being able to buy a condo is a cherished dream for many Singporeans. 

Cons of upgrading to a condo

High bank mortgage rates 

One of the most serious disadvantages of upgrading to a condo right now is that you will have to deal with high bank mortgage rates. 

Now, when you upgrade to a condo, you are no longer eligible for a HDB concessionary home loan and its budget-friendly 2.6% per annum interest rate. Instead, you have to take a home mortgage from a bank.

The problem is, Singapore’s home mortgage rates are now at all-time highs, and with the U.S. Fed expected to continue raising interest rates, you will be looking at hefty home loan repayments for quite a while.

This can impact you in two ways – burning through your savings or CPF account in a short period of time and potentially derailing your other financial goals, or being forced to buy a smaller unit so as to keep your home loan payments affordable. 

Neither of these scenarios are desirable, and to add to your troubles, you’ll also have to keep an eye on home mortgage rates and refinance your home loan every once a while, lest you get stuck paying high interest rates for longer than you need to. 

Large cash outlay 

In a bid to rein in the property market, the government has instituted various measures and regulations, forcing buyers to pay a large cash outlay. 

You are only allowed to borrow up to 75% of the price of your condo, which means you’ll have to make a downpayment of 25%. You can use your CPF monies to pay up to 20% of the condo’s value, with the remaining 5% to be paid in cash only. 

For a condo that costs S$1.2 million, that works out to 

  • S$60,000 mandatory cash payment (5% of purchase price)
  • S$240,000 in CPF monies or your own savings (20% of purchase price)

Yep, that’s a total of S$300,000 just for the downpayment; upgrading to a condo is definitely not for the faint of heart!

Less floor space for your buck

Ok, we know that condos are expensive but have you ever wondered how much more expensive they are than HDB flats?

According to PropertyLimBrothers (who haunt my Youtube ads), a condo unit is around three times as pricey as an HDB flat with the same floor area, on average. This means that you are getting less floor space on a per-dollar basis, when you upgrade from a HDB flat to a condo. 

In practice, this could see you spending three times the amount of money for a condo that is similarly sized as the HDB flat you are “upgrading” from, which is certainly something that warrants a second thought (or maybe even a third). 

Should you upgrade from HDB to condo in 2023?

If you’ve read the article up till this point, you’ll know that there aren’t any easy answers to be found. 

On the one hand, going for a condo is your best shot for skipping the BTO wait; for those whose life plans hinge on getting a property quickly, going for a condo is worthy of contemplation.

Yet, making the switch from a HDB flat to a condo unit will mean having to grapple with the formidable financial hurdles that stand in the way. 

Our advice is to proceed carefully and triple check everything, lest you find yourself accidentally biting off more than you can chew.

And for those who aren’t in a hurry, putting your goal to upgrade on the backburner for now may one of the most financially prudent moves you can make right now.

Read these next:
How Will Rising Housing Loan Interest Rates in Singapore Impact You?
How Not to Get Ripped Off Buying Your First Condo in Singapore
New Launch vs. Resale Condo: Which is a Better Property Investment?
2023 Guide To Executive Condominiums (EC) In Singapore


An ex-Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimise happiness and enjoyment in his life.


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