One way to spice up any small talk in Singapore is to discuss property purchase. Not only do 90% of people in Singapore own their homes, many also view property as an important investment in the long-term.
While thinking about your home as an investment is not ideal, it’s hard to blame anyone for doing it. The numbers support the mindset. Since 2020, private residential property prices in Singapore have climbed nearly 40%.
Think about that, if you bought a $1.5 million property in 2020, you would have paid down a minimum of $300,000 in downpayment. Today, the property may be worth close to $2.1 million. Your $300,000 “investment” would have earned you a “profit” of $600,000.
This is exactly why creative property investing strategies have proliferated in Singapore, including the 99:1 property ownership, and the Sell 1 Buy 2 strategy.
Another strategy that’s increasingly touted on social media (at least the social media this writer is looking at) is to sell your HDB flat to buy a new-launch condominium, and to rent a place for the approximately three years it will take to build.
Read Also: What Is the 99-to-1 Property Share Split And When Is It Illegal?
The Math Behind This Sell-HDB-And-Rent-While-Waiting Property Investment Strategy
Let’s look at a hypothetical scenario and how the math behind the Sell-HDB-And-Rent-While-Waiting strategy plays out.
For example, a couple living in an HDB flat wants to upgrade to a condominium. They have two main options:
1) sell their HDB and buy a resale condominium, or
2) sell their HDB flat, buy a new-launch condominium that will be ready in three years, and rent a property in the meantime
Staying in their HDB while waiting for the new-launch to build is not entirely attractive. They would have to find a huge pile of cash for the downpayment (even if it is a progressive payment plan) and more importantly, fork out a hefty ABSD. They can get a refund for the ABSD when they sell their HDB flat within 6 months of their new-launch condominium’s TOP date, but there’s also the opportunity cost of locking up the funds to consider.
The main attraction of choosing the Sell-HDB-And-Rent-While-Waiting strategy is that they think the new-launch will enjoy higher price appreciation than a resale condo, even after deducting 3 years of rent.
Here’s how the math might work out. You sell a 4-room flat that you own. Based on HDB’s 3rd Quarter 2025 data, the median price of a 4-room HDB flat across all estates in Singapore is about $720,000.
Read Also: 5 Potential Pitfalls To Know Before Decoupling To Buy A Second Property In Singapore
| HDB Sale Price | $720,000 | |
| Cash-in-Hand + CPF Refund | $720,000 – Estimated outstanding loan amount of roughly $250,000 = $470,000 | |
| Upgrading Strategy | Buy $1.5 Million Resale Condominium | Buy $1.5 Million New-Launch Condominium; Rent For 3 Years |
| Downpayment Since you have $470,000 in cash and CPF proceeds from your HDB sale, you can afford the downpayment. | 25% of purchase price: $375,000 | 5% to 10% of purchase price at the start, and will increase through a Progressive Payment Plan, typically based on construction milestones. For the purpose of this article, we will use the same 25% downpayment: $375,000 |
| Buyer’s Stamp Duty (BSD) | $44,600 | |
| Misc Fees (e.g. Legal Fees) | Approximately $5,000 | |
| Mortgage (interest is assumed to be 1.55% based on latest figures by mortgage broker, Cashew) | $3,909 per month, or $140,724 over 3 years. Interest over the 3 years is estimated to be $50,300 | It should be much lower, since new-launch condos offer a Progressive Payment Plan. This is estimated to be:- Foundational completion in 6 months: $262 per month – Concrete Framework Completion in 6 months: $794 per month – Completion of Partition Walls in 3 months: $1,061 per month – Completion of Ceiling and Roofing in 3 months: 1,330 per month – Completion of Plumbing and Electrical Works in 3 months: $1,600 per month – Completion of External Works in 3 months: $1,871 per month- TOP in 1 year: $3,252 per month Totalling $62,946 over 3 years. The interest component over 3 years is estimated to be $22,500. |
| Renovation + Furnishing | You may need to make significant renovations and buy your own furniture:$100,000 | Not required for the first 3 years. Potentially minimal even after getting the keys. |
| Rental payment for 3 years | $0 | Assuming a monthly rental rate of $4,500 a month for a 3-bedroom condominium, x 36 months = $162,000 |
| Property Maintenance Fee | Estimated to be around $400 per month. Over 3 years, this will be $14,400 | – |
| Property Tax | Assuming the property has an Annual Value of $40,000, the Property Tax will be $1,120 per year. Over 3 years, this is $3,360 | Only begins after TOP date. |
| Cost of Transaction after 3 years | Condominium Purchase Price: $1.5 million BSD: $44,600 Mortgage: $106,200, of which $50,300 is interest expense Misc Fees: $5,000 Renovation: $100,000 Property Maintenance:$14,400 Property Tax: $3,360 Total: $1,717,660 | Condominium Purchase Price: $1.5 million BSD: $44,600 Mortgage: $62,946, of which $22,500 is interest expense Misc Fees: $5,000 Rental over 3 years: $162,000 Total: $1,734,100 |
In our admittedly simplistic calculations, the cost of the transaction after the 3rd year is quite similar. We have to pay for renovation and furnishing for a resale condominium but not for a new-launch condo. However, we have to account for 3 years of rental with a new-launch.
For greater simplicity, let’s assume the cost of either property purchase is the same after 3 years. Thus, which property ends up being more valuable will be down to the resale value when the new-launch receives its TOP.
While past data used on many of the social media videos might suggest that many new-launch condos appreciate more than the resale condo at its TOP date, this strategy should be taken with a pinch of salt.
Here’s some reasons why:
#1 The Sell-HDB-And-Rent-While-Waiting Strategy Is Public Knowledge
Given how social media and property agents have been touting this strategy, it’s worth considering that it is widely known and being carried out by many people in Singapore.
When information like that is public knowledge, we tend to see profits normalise. This means is that the developer’s selling price will have already taken any “extra” profit that buyers will earn at the TOP date into account.
After all, developers are driven by profit and have pricing power.
#2 New Launch Price Appreciation Is Not Guaranteed; Rental You Pay Is Already Out Of Pocket
As discussed, applying this strategy means you are gunning for outsized profits. However, any outsized profits can only be realised when the property receives its TOP after about 3 years, and the selling price/valuation is established.
On the other hand, you are exposed to the rental market for 3 years. Today, most rental contracts are 1 to 2 years long. Negotiating for a 3-year long rental contract to lock in your rental expense may mean having to pay a slightly higher than market rent.
#3 There’s A Risk Of Timing It Wrongly
What if the project is delayed? What if, after getting the keys, you realise it’s not yet your dream home and you prefer to do some minor renovations before moving in?
Not only will your rental expense increase, but you may end up shifting 3 times across the entire strategy – from your initial HDB home to a long-term rental, and then to a short-term rental and finally into your new home. The logistics of it can weigh you and your family down, especially if you have young children. Of course, there will also be slightly higher costs to consider as you move 3 times instead of just once.
We’ve also experienced rare cases like the recent COVID-19 global pandemic. Construction can grind to a halt and project delivery timelines extend by years. At the same time, demand for housing also shot up, pushing the rental rate higher, and this would have eaten into your returns.
#4 You Get What You See With A Resale Unit
If you’re buying a resale condo, you can view multiple properties and choose one that best fit your needs. You can see the condition of the unit, assess the quality of the development, and look at who your neighbours are going to be.
There are also smaller things like viewing the unit to experience the afternoon sun, looking out the window to check whether you’re facing another development’s bin centre – like other buyers have experienced in the past.
If you’re buying a new-launch, you can only see the show flat. The renovations and furnishing is designed to capture your attention. Ensure you know exactly what’s coming with your condo purchase. The show flat may be previewing a premium version of the unit type you are buying.
#5 Are You Buying A Home Or Are You A Property Speculator?
While many Singaporeans try to also earn a tidy profit off their homes, it should not be treated as a purely speculative play. You are choosing between a resale condominium and a new-launch to move into. You’re not trying to get the cheapest rent and sell your new-launch once it receives TOP to earn the biggest profits before moving on to the next new-launch.
The profits that people used to earn may just be what it is – used to. Today, with more people playing the same game, the profits may shrink. Because developers are in the best position to price the development fairly to maximise their own profits.
#6 Property Agents Have Bigger Upside When Selling New-Launch
Real estate agents can recommend an upgrading strategy and are paid a commission when you buy a property through them. It is ultimately the buyers who take on the risks of whether the strategy will pay off.
Selling resale condo will probably take more time, work and effort. On the other hand, selling a new launch condo, the agents can leverage on developer’s marketing and public excitement around a brand new project.
Commissions when selling a new-launch can also be much higher, and go up to 2% to 5%. On the other hand, the commission when selling a resale condo may not be as high. Property agents will also get a commission when you rent a place through them. Thus, having as many property transactions will increase their overall commissions.
This is not to say buying a new-launch is not a good strategy. Just simply that you have to understand the motivations of all parties, including your own.
