Buying Private Property While Owning HDB Flat A Right Choice? – Upgrading Made Simple

Buying Private Property While Owning HDB Flat A Right Choice?

In my 8 years of working as a property agent and meeting different people, I always ask them how they view their HDB home.

And of one the biggest question many people asked is “Buying Private Property While Owning HDB Flat A Right Choice?”

In fact, one of the most common “goal” I see from those who are seeking to buy another private property is that – “let’s keep our HDB flat for the monthly rental.”

Here is the thought process:

  1. We own a fully paid HDB flat. Logically, we can use the rental we earn from the flat to cover the private home purchase. 
  2. But we need to pay the Additional Buyer Stamp Duty (ABSD) – a potentially huge cost – if we decide to own both.
  3. Is it worth paying for the ABSD for the rental yield?

Taken from

The ABSD is $70,000 and the Buyer Stamp Duty (BSD) is $24,600. Almost a 6-figure sum in total – if the private residential property is $1 million dollars. Do take note this is a COST.

For comparison basis, this is enough to pay for your children’s university education.

So the Question is, are you ready to pay for this ABSD?

Is Rental Yield Very Important?

One of the next biggest consideration for people to hold on to their HDB while purchasing a Private Property is also the fact that they can collect rental of their HDB to finance the Private Property’s monthly bank loan instalments 

Honestly, Rental yield for HDB flats usually looks very good – thanks to the fact that HDB flats are relatively cheaper when compared to private property. 

However, rental yield should not only be the main important factor to consider. 

The other important factor to consider is Capital Growth. 

Is Capital Growth Possible In This Current Market?

Being on the ground daily, I do encounter property transactions that tells me capital growth is still possible. 

The transactions below shows you the power of capital growth that is possible when it is with the right investment property:

All transactions above belong to the same new development of the same size

On 17 May 2017, the 8th floor unit was bought at $1.18 million.

On 30 Oct 2017, the 3rd floor unit was bought at $1.392 million. 

Within a span of 6 months, the 8th floor unit has a potential capital gain of $200K.

Assuming you rent out your entire HDB flat for $2K per month, it will take you about 8 years to cover this $200K gain. 

The Difference Between Monthly Rental vs Capital Gain

While the monthly cashflow and the HDB rental yield seems fairly attractive, the truth is your HDB flat cannot be a true investment vehicle as it considered as public housing.

Public housing comes with various restrictions like 5-year Minimum Occupation Period (MOP), zero refinancing options and ethnic quotas. 

However with private property, one can easily sell and use that gains to reinvest in another private property. 

With the recent changes in Sellers’ Stamp Duty (SSD), one can easily exit out of their private property and walk away with the gains after 3 years.


The opportunities are available but my observation is that the choice units are becoming limited. 

If you are considering to upgrade and move on to private property, I invite you to contact me for a discussion to check your financial options.

Make an appointment with me today and let me
guide you towards achieving your dreams.