It's greatly dependent on your age group, if you are in your 30's and early 40's.
Then it is advisable to upgrade to a private property and let go of your HDB flat.
This advice is for higher income groups who have the capability to jump out of the rat race rather repeating all others mistake, by trying to keep HDB flat.
HDB flat is mainly for Singaporean to start up a family when their income does not justify them to hop on to the fast track. Our government will not want this property to raise to a level where it is out-of-reach to majority Singaporean. Thus their appreciation is going to be limited.
In Singapore short history in real estate or in short; property, statistics already allow us to understand that capital appreciation is much much higher than HDB flat.
Although most people are complacent with the capital appreciation, main reason was their friends, relatives, colleagues etc are mostly stay in HDB flat. Never know that private property had climb much faster and higher than HDB flat.
If you recall back in 2004, a 1000 sqf condo only cost around $500k, but now with $500k, properly you can only find HDB flat with the same budget.
A 1000sqf condo now a days already cost around $1.5M in avg.
The price gap difference between HDB flat and private is getting wider, it is around 3 times the difference. The amount will be signifcant if quatum is large;
e.g. $500k * 3 = $1.5M, $1.5M * 3 = $4.5M. Thus if you bought a property worth $500k appreciate 3 times in X yrs, you gain $1M, but if the property is $1.5M, your gain is $3M.
You relook at the current government policy, 4% Buyer stamp duty for $1M and over, ABSD increment, TDSR and many other cooling measure. These are telling you that our elite already aware that price in private property is driven by market to rise beyond their accepted level.
But looking at HDB flat, we are building more than 3 times than the amount built in 2004. HDB flat price has come to a standstill straight line and dipping every quarter.
1) To keep existing HDB flat, capital appreciation is expected to be minimum.
2) Rental for HDB flat is mainly for lower income group, their behaviour might not meet your expectation, thus increase conflict and frictions to deal with them. This is a long term headache where you might not want to have in your busy work.
3) 12% of ABSD for 2nd property investment does not seems to justify with the rental yield received. Simple calculation, let said you received $2k monthly, 5yrs is $120k. If you bought a $1M private property, your ABSD shall be also $120k. So it takes 5 yrs to recover your loss in ABSD, we are not considering the following:
(a) wear & tear,
(b) vacant period,
(c) capital appreciation lost,
(d) higher property tax keeping the flat
So it will takes at least about 6 yrs to breakeven.
4) By keeping the funds in HDB flat, you also have to pay higher mortgage in your new purchase.
5) Governemnt land sales (GLS) is getting higher. It will be more expensive than getting cheaper, because our land resource is limited. If GLS bid is lower, government will always announce it is below their expectation and retract from the bid. This already happened at least once in Paya Lebar bidding in the past.
Thus it is obvious to us what should be your choice.
Hope the above answer to your main concerns, but if there are more queries, please feel free to contact me at 90110636, or email: firstname.lastname@example.org if more information is needed.
I'll be glad to assist.
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