HIGH home prices and the prevailing Additional Buyer’s Stamp Duty (ABSD) measure were the most-cited reasons by respondents for not being able to upgrade to a private home, based on a PropNex survey released on Monday (Jul 22).
Although almost half of the respondents aspire to upgrade from their existing Housing and Development Board (HDB) flat, about 64 per cent of the 1,250 HDB flat owners surveyed said high home prices deterred them from upgrading to private housing.
Flash estimates from the Urban Redevelopment Authority’s property price index showed that overall private home prices have climbed for seven consecutive years, rising by about 51 per cent cumulatively from Q1 2017 to Q2 2024.
Around 32 per cent of respondents cited the ABSD measure as a key obstacle. It requires HDB upgraders to pay the 20 per cent ABSD upfront first, before applying for an ABSD remission – subject to them meeting conditions.
Ismail Gafoor, chief executive of PropNex, said: “To this end, perhaps the government can consider aligning the ABSD treatment for flat owners wishing to upgrade to a private home, with that of those looking to purchase new executive condominiums (ECs) from developers.”
He noted that HDB upgraders who buy ECs do not have to pay the large ABSD amount upfront. They can live in their existing flat, and are required to sell it six months after their new EC receives its Temporary Occupation Permit.
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Other reasons respondents cited for not upgrading to private housing included having other financial commitments, family circumstances and still serving the five-year minimum occupation period.
BTO option “affordable”
About a quarter of those surveyed said new private residential project launches (26 per cent) and resale private homes (23 per cent) are “extremely unaffordable”. Meanwhile, around 40 per cent said these housing options are “unaffordable”.
With the prices of HDB resale flats strengthening in recent years, about 33 per cent of respondents said these flats are “unaffordable”. After six years of price declines from 2013 to 2018, resale prices of HDB flats grew by a cumulative 43 per cent from Q1 2019 to Q2 2024, based on the HDB resale price index.
Build-To-Order flats remained the most affordable housing option, with about 32 per cent of those polled saying these flats are “affordable”.
PropNex noted that respondents’ preferred housing types are reflective of their housing budget.
About 62 per cent said they have a housing budget of below S$1 million, while 21 per cent said their budget is between S$1 million and S$1.5 million.
The real estate agency highlighted that HDB resale flats are the most affordable options for HDB flat owners who want to relocate – the average transacted price of a five-room HDB resale flat was S$714,000 in H1 2024.
Priced out
Nearly half (48 per cent) of respondents aspire to upgrade from their existing HDB flat, with 21 per cent wanting to upgrade to a bigger one or one in a better location, and 27 per cent wanting to upgrade to a larger private home.
However, about 38 per cent of those surveyed said they have no plans to move.
The survey also indicated that about 36 per cent of respondents felt they are “priced out of the market” and will never be able to afford a private home. About 18 per cent said it would take five to 10 years to upgrade, while 10 per cent said it would take more than 10 years. Only 6 per cent said they could upgrade within the next 12 months.
Gafoor added: “It is fair to say that HDB flats are a staple of housing in Singapore and will continue to be home to the majority of the population.”
