This Is The Reason Why HDB Upgraders Are Being Priced Out: Analysing The Price Gap Between HDBs And Condos

The price gap between flats and condos is important for several reasons - for upgraders, it shows the likelihood of being able to afford the leap into the private market. For pure homeowners, it also has relevance; given a comparison of benefits, one might conclude that some resale flats - even million-dollar ones - may still be a worthwhile purchase compared to condos. And perhaps in a wider sense, it gives us a snapshot of how our property market has changed in very significant ways, over the past decade:

The price gap between flats and condos over the past decade

Despite worries about rising home prices post-Covid, the price gap between flats and condos was actually higher in the pre-Covid year of 2019. 

This is likely due to the decline of resale flat prices after rule changes in 2013 (at the time, the government ceased publication of Cash Over Valuation rates, and imposed the Mortgage Servicing Ratio. Both moves sent resale flat prices into several consecutive years of decline). 

It was during the aftermath of COVID-19 that resale prices shot back up; you can see how the prices have been rising since 2020. Flats are still outpaced by the private market though, so while they have narrowed the gap from 2019, it’s still nowhere close to what it was in 2013.

Prices in absolute terms, however, suggest that post-Covid may have been tougher on upgraders than in 2019

Put aside the price gap in percentages for a moment, and consider that in 2019, the difference in price psf between condos and flats was around $1,600+ psf versus $415+ psf. 

But from 2023 onward, condo prices jumped by over $400+ psf, whereas resale flat prices rose by just around $100+ psf. So even if the price gap appears lower (in percentages) in the past few years, it’s plausible that some upgrading may still have been tougher compared to 2019.

Let’s also consider average prices (total price of homes) across all transactions:

Year	Condo Prices	Average of resale_price	Avg Condo Size	Avg HDB Size	Price Gap
2013	$1,404,118	$476,441	96	96	2.9
2014	$1,396,142	$442,716	97	95	3.2
2015	$1,353,671	$434,710	99	97	3.1
2016	$1,412,882	$438,839	98	97	3.2
2017	$1,502,455	$443,889	102	98	3.4
2018	$1,545,086	$441,282	98	98	3.5
2019	$1,615,317	$432,138	94	97	3.7
2020	$1,557,482	$452,279	94	98	3.4
2021	$1,739,862	$511,381	98	98	3.4
2022	$1,927,696	$549,714	99	97	3.5
2023	$1,954,451	$571,803	94	95	3.4
Grand Total	$1,603,334	$478,307	97	97

Take a look at prices in 2020, the year when the Circuit Breaker happened. Condo prices were around $1.55 million on average, whilst a resale flat averaged $450,000+. 

By 2023, condo prices averaged $1.95 million (up around $400,000+), whilst HDB prices averaged $571,000+ (up by only around $120,000+). 

These numbers probably matter more to upgraders than the percentage price gap, when it boils down to the reality of making down payments, qualifying for sufficient loans, and so forth.

As an aside: in 2020 and earlier, the average size of a $452,000+ flat was roughly four square metres bigger than a $1.55 million condo. As of 2023, there’s virtually no size difference between a $1.95 million+ condo, and a $571,000+ HDB flat. It’s a slight difference, but consider how much more you are paying for the condo.

But is this a fair comparison, since HDB flats are all leasehold?

If lease status is a factor for you, here’s how it looks when we eliminate all freehold condos from the comparison:

Year	Condo Prices	Condo $PSF	Condo Size (Sqm)	HDB Price	HDB $PSF	HDB Size (Sqm)
2013	$1,258,188	$1,289	93	$476,441	$469.17	96
2014	$1,241,724	$1,277	93	$442,716	$440.88	95
2015	$1,149,470	$1,217	90	$434,710	$423.10	97
2016	$1,215,658	$1,315	90	$438,839	$423.89	97
2017	$1,300,580	$1,354	93	$443,889	$425.39	98
2018	$1,349,732	$1,423	91	$441,282	$418.96	98
2019	$1,363,463	$1,531	86	$432,138	$415.91	97
2020	$1,381,682	$1,534	88	$452,279	$433.84	98
2021	$1,521,246	$1,618	92	$511,381	$487.62	98
2022	$1,701,503	$1,705	95	$549,714	$531.76	97
2023	$1,763,537	$1,895	89	$571,803	$564.05	95
Grand Total	$1,403,244	$1,487	91	$478,307	$462.94	97

We can see that average prices for condos rose roughly $400,000+ between 2020 and 2023, broadly similar to when freehold projects were on the list. However, note how the average size difference has shrunk (leasehold condos tend to be smaller at an average price point): condos were about 10 square metres smaller than a flat in 2020, but just six square metres smaller in 2023.

Examining the price gap by region

Here’s what the price gap looks like when we observe the OCR, RCR, and CCR. We have excluded the Southern Islands (Sentosa) for this, as there are no flats there:

Here’s the condo/HDB price gap between the different regions:

Year	CCR	RCR	OCR
2013	194%	153%	154%
2014	242%	167%	165%
2015	156%	165%	179%
2016	208%	161%	188%
2017	196%	175%	199%
2018	220%	197%	210%
2019	252%	227%	230%
2020	242%	218%	216%
2021	219%	214%	184%
2022	212%	205%	184%
2023	197%	222%	201%

The price gap in the CCR has narrowed the most, and we’d expect that to continue given the last round of cooling measures (the 60 per cent ABSD for foreigners impacts the CCR most among other regions - and it’s happening against a backdrop of more and more million-dollar central area flats). 

Meanwhile, the price gap in the RCR is nearing the same high it saw back in 2019. 

The general situation may be clearer if, again, we look at it in absolute numbers:

Row Labels	Condo CCR	HDB CCR	Condo RCR	HDB RCR	Condo OCR	HDB OCR
2013	$2,111,234	$524,100	$1,429,874	$514,932	$1,029,326	$466,604
2014	$2,245,331	$500,429	$1,445,413	$486,702	$1,023,785	$431,865
2015	$2,251,327	$710,411	$1,350,309	$492,999	$996,618	$417,281
2016	$2,219,614	$648,947	$1,281,382	$512,861	$1,021,092	$419,544
2017	$2,107,789	$641,782	$1,453,663	$530,926	$1,090,495	$420,040
2018	$2,762,706	$656,480	$1,494,370	$535,986	$1,094,924	$417,511
2019	$2,671,110	$643,123	$1,482,510	$516,003	$1,098,617	$411,400
2020	$2,044,835	$621,680	$1,520,180	$522,156	$1,176,060	$436,466
2021	$2,223,497	$728,548	$1,695,064	$582,919	$1,258,125	$491,344
2022	$2,589,665	$705,734	$1,976,917	$618,407	$1,369,572	$532,372
2023	$2,585,938	$726,969	$1,998,090	$640,829	$1,462,449	$556,268

Here’s how much prices have risen for flats and condos, in each of the three regions between 2020 to 2023:

Period	Condo CCR	HDB CCR	Condo RCR	HDB RCR	Condo OCR	HDB OCR
2020-2023	$541,103	$105,289	$477,909	$118,673	$286,389	$119,802

We see the same pattern across the board: resale flat prices climbed by only around $100,000, whereas condo prices increased by much bigger amounts (almost five times as much, in the CCR!)

Given that the flats are cheaper and bigger, this could drive some buyers to upgrade to a bigger or better-located flat, rather than a condo. This may explain some of the momentum behind the rise of million-dollar flats. Speaking of bigger, here’s a look at unit sizes for comparison:

Year	Condo CCR	HDB CCR	Condo RCR	HDB RCR	Condo OCR	HDB OCR
2013	114	81	95	83	89	99
2014	106	77	96	83	90	98
2015	116	90	92	85	88	99
2016	105	87	89	86	87	100
2017	107	88	93	88	91	100
2018	123	90	88	88	89	101
2019	112	90	82	88	84	99
2020	91	87	86	88	89	100
2021	95	91	87	90	94	100
2022	108	86	95	88	92	99
2023	107	84	87	86	88	97

In the CCR the size difference is smaller, but your flats in the RCR and OCR will be bigger than your condo counterparts on average.

Can we account for the age of the properties?

This is a bit challenging, not least due to the available transaction volumes. But let’s give it a shot:

Projects aged 20 years or less:

Year	Condo CCR	HDB CCR	Condo RCR	HDB RCR	Condo OCR	HDB OCR
2013	$2,103,353	$568,194	$1,434,805	$698,345	$1,024,596	$516,253
2014	$2,239,962	$557,099	$1,457,099	$680,833	$1,019,722	$475,515
2015	$2,270,389	$874,391	$1,342,208	$674,595	$993,660	$449,710
2016	$2,240,614	$873,349	$1,275,586	$698,865	$1,021,745	$447,556
2017	$2,131,490	$900,401	$1,461,549	$711,243	$1,100,942	$445,496
2018	$2,874,319	$894,191	$1,498,406	$722,463	$1,095,974	$437,868
2019	$2,724,364	$866,451	$1,482,099	$726,088	$1,097,351	$438,795
2020	$2,021,273	$914,642	$1,519,666	$749,656	$1,188,030	$465,673
2021	$2,218,625	$981,142	$1,707,994	$776,087	$1,283,577	$516,844
2022	$2,604,186	$1,079,216	$2,012,179	$815,180	$1,392,818	$563,385
2023	$2,712,081	$1,220,910	$2,021,546	$846,591	$1,427,403	$591,402

As of 2023, a resale flat that’s 20 years or newer, in a central area, is less than half the price of a condo counterpart ($1.2 million versus an average condo price of $2.7 million).

In the OCR, a resale condo in this age band averages just $1.4 million; but consider that for this price, you could get a prime location HDB project like Pinnacle @ Duxton. Having condo facilities may not justify the price difference when you consider access to areas like the CBD and its relevant amenities. Plus, prime location flats have conservancy fees that are much cheaper than the maintenance fees of even OCR condos (probably still around $300 to $400 a month).

If you look at unit sizes, flats also come out larger:

Year	Condo CCR	HDB CCR	Condo RCR	HDB RCR	Condo OCR	HDB OCR
2013	112	93	93	97	88	111
2014	102	88	94	97	89	108
2015	110	97	88	96	86	108
2016	100	96	85	97	84	106
2017	102	98	90	96	87	104
2018	120	98	85	95	85	101
2019	105	95	79	93	79	97
2020	84	98	81	92	84	96
2021	89	98	83	91	88	96
2022	104	98	91	89	86	94
2023	106	96	83	87	80	91

So it starts to explain why a million-dollar flat looks more and more sensible to some people in the current year, and why they continue to rise in number. 

Projects aged 20 to 40 years:

Year	Condo CCR	HDB CCR	Condo RCR	HDB RCR	Condo OCR	HDB OCR
2013	$2,679,670	$543,015	$1,325,501	$491,420	$1,153,772	$427,967
2014	$2,467,071	$504,455	$1,289,145	$474,876	$1,094,832	$402,958
2015	$2,117,624	$552,947	$1,509,405	$487,385	$1,053,213	$394,638
2016	$2,032,489	$562,684	$1,376,231	$502,927	$1,012,087	$398,840
2017	$2,048,379	$566,497	$1,432,132	$539,544	$1,008,511	$402,208
2018	$2,131,431	$608,416	$1,479,921	$555,957	$1,076,145	$406,927
2019	$2,442,445	$646,862	$1,527,204	$553,410	$1,090,791	$399,855
2020	$2,347,398	$586,587	$1,549,060	$560,104	$1,079,482	$425,067
2021	$2,201,381	$688,423	$1,636,032	$621,954	$1,121,048	$488,623
2022	$2,451,289	$648,833	$1,802,369	$682,887	$1,252,351	$533,782
2023	$2,038,027	$793,980	$1,858,532	$729,768	$1,560,831	$557,389

In the past three years, the CCR has seen some notable price drops. This is mostly due to size:

Year	Condo CCR	HDB CCR	Condo RCR	HDB RCR	Condo OCR	HDB OCR
2013	202	83	132	86	123	90
2014	210	77	133	86	124	91
2015	165	85	139	90	123	93
2016	164	85	132	94	122	95
2017	168	88	127	98	121	98
2018	152	95	119	101	119	101
2019	171	101	119	102	120	103
2020	150	94	121	103	121	106
2021	129	105	120	106	118	108
2022	138	94	121	105	116	107
2023	101	104	115	105	108	106

The average size of a transacted condo unit in the CCR, as of 2023, is just 101 square metres, compared to the much larger 150 to 171 square metre units in 2019/20. Again, looking at the price gap between flats and condos relevant to size, flats stand out as a much better deal. 

Projects aged 40 years or older:

Year	Condo CCR	HDB CCR	Condo RCR	HDB RCR	Condo OCR	HDB OCR
2013	$1,358,500	$303,445	$1,121,067	$349,135	$785,444	$315,778
2014	$1,736,667	$300,200	$1,038,210	$344,352	$820,000	$299,059
2015	$1,535,000	$468,680	$882,579	$344,236	$598,333	$278,542
2016	$1,520,500	$495,169	$1,075,559	$356,561	$1,109,444	$277,683
2017	$1,400,894	$445,664	$1,043,805	$358,844	$1,056,772	$289,475
2018	$1,425,579	$452,260	$1,040,975	$354,913	$1,351,980	$302,007
2019	$1,710,407	$439,919	$1,059,331	$343,253	$1,393,409	$313,804
2020	$2,397,125	$437,199	$1,237,880	$343,924	$1,313,518	$331,975
2021	$2,447,912	$475,346	$1,093,588	$388,930	$1,445,024	$380,815
2022	$2,433,581	$508,101	$1,303,038	$416,303	$1,653,572	$406,354
2023	$2,220,349	$498,735	$1,462,061	$430,490	$1,746,712	$429,229

There are relatively few projects of this age, and there may be more quirks specific to each project. As such, we do need to keep this in mind when comparing. 

Nonetheless, one of the things to note is that - among the oldest flats - the price differences based on location tend to be smaller. In the 20 or under age range, a flat in the OCR versus the CCR saw a price difference of over $500,000 (see above). 

For flats in the 40+ age range, the difference is just around $70,000, and even the gap between RCR and OCR flats is not too great.

Another difference is size because condos built in the ‘80s tended to be much bigger than the ones which came later:

Year	Condo CCR	HDB CCR	Condo RCR	HDB RCR	Condo OCR	HDB OCR
2013	134	54	114	61	124	67
2014	143	58	127	63	124	67
2015	132	73	98	66	116	65
2016	183	78	137	68	159	68
2017	163	71	129	70	133	72
2018	127	72	125	72	140	77
2019	169	70	105	73	149	80
2020	226	71	133	73	141	82
2021	224	72	108	75	149	83
2022	193	73	120	74	148	81
2023	151	70	121	73	143	81

At some point, this will be shaken up, as units here start to creep toward the end of their 99-year lease. For now however, most are new enough that we haven’t yet seen the effects. 

But as a general conclusion, after factoring in location and age, HDB flats may be a more sensible option among pure owner-occupiers right now. We don’t think this eludes the market, which is why the pace of million-dollar flats never seems to slow. 

As a final aside, consider that the effect of grants on a lower flat price could provide a significant cushion for HDB prices. The subsidy, as a percentage of the price, is huge for cheaper flats.