Most conversations about residential rental yields in Singapore typically focus on familiar and top-performing condominiums. Most of the articles in this series also centred on some of the best-performing developments on the market today.

But when we matched HDB flats to the nearest condos in their vicinity, the yields from most public housing flats beat out the private residential options. This was the case from three-room flats against two-bedroom condos, to Executive flats against four-bedders.

Based on our analysis, the yield gap is widest among the smallest-sized homes. Median three-room HDB rental yields were 7.50% against the 3.42% recorded for two-bedroom condos in the same town. That’s a 4.08 percentage point difference that narrows as the flat sizes increase.

The ability to rent out an entire flat is limited to owners who passed the Minimum Occupation Period (MOP) of their property. As a result, the sky-high rental yield of 7.50% is only within reach of owners who have fully paid for the property, and have owned it for long enough.

This sets up a real dilemma for HDB upgraders: if a flat has cleared its MOP and earns a yield like that, is it worth keeping while buying a condo elsewhere?

A question like that can’t be answered without considering the Additional Buyer's Stamp Duty (ABSD) on a second property, against the rental income that the flat is able to reap.