To Upgrade or Not to Upgrade: Is Now the Right Time for a Condo?

If you’ve been asking this lately — you’re not alone. With rising property prices, higher interest rates, and news about million-dollar HDBs, many homeowners are wondering if it’s time to make the leap into private property.

Deciding whether to upgrade to a condo is as exciting as it is daunting. With homeownership comes the thrill, but it also includes the complexities of making the right real estate choices. As housing markets change and personal preferences evolve, one question persists: should you make the leap now or wait a bit longer? Let’s explore the crucial factors you should weigh before deciding on your condo journey!

Interior of a Luxury Home

Why This Question Matters More Now Than Ever

In today’s market, the price gap between HDB flats and condos has narrowed. At the same time, Singaporeans are earning more, accumulating CPF faster, and looking to grow wealth through property. This makes the HDB-to-condo path very appealing — but also riskier if you don’t do the math right.

Upgrading without preparation could lead to the following problems:

1. Over-leveraging your finances

2. Negative cash flow

3. Buyer’s regret due to poor planning

So how do you know if it’s the right time?

3 Signs You’re Ready to Upgrade

Upgrading to a condo isn’t just a financial move; it’s a lifestyle decision. Living in a condo can mean waking up to skyline or pool views, taking a morning swim before work, or hosting friends at the BBQ pit on weekends. But the real question is: Are you financially and emotionally ready to take the next step?

1. You Have More Than the 25% of the Purchase Price in CPF or Cash for Downpayment & Other Fees

Upgrading usually involves a 25% downpayment, plus additional fees such as Buyer’s Stamp Duty (BSD), legal fees, renovation and furnishing costs.

Let’s break it down.

For a $1.5M condo, you’d need a downpayment of $375,000 cash or CPF (with at least the first 5% in cash; $75,000), BSD of $44,600, and an estaimted legal and miscellaneous fees of $5,000. Your total upfront needed will be around $424,600.

If you’re buying a $1.5M condo, that means a downpayment of $375K. And this does not yet include the other costs like BSD, renovations, and furnishing costs you will have to incur.

Before you start viewing showflats or resale homes, your first checkpoint is: can you cover the upfront costs?

2. Your Current HDB Has Appreciated in Value

Selling at or near the peak of your HDB’s value can fund your upgrade. If you bought a BTO or resale flat several years ago (at least before COVID hit), there’s a good chance your flat has appreciated — giving you healthy cash proceeds after CPF refunds. Plus, if you’re living in a high-demand estate like Queenstown or Bishan, the valuation of your home and potential sale price could be more than you imagine.

Check the recent transacted prices in your block and neighbourhood, your CPF accrued interest you need to refund, and the estimated sales proceeds after the sale. Another important thing you need to check is if your flat is at or near its peak resale value. We all know that as the lease drags on, the prices of resale HDB flats also go down accordingly.

Here’s how you can get started and check:

1. Search recent resale transactions on HDB’s portal or SRX

2. Check your CPF refund amount in the CPF Homeownership dashboard

3. Calculate potential net proceeds (use a trusted agent or online estimator)

   
   

Remember: These proceeds can help fund not just your condo, but also renovations, stamp duties, and reduce your home loan.

3. Your Income Qualifies You for a Comfortable Loan

Just because you can borrow a large loan doesn’t mean you should. Use your Total Debt Servicing Ratio (TDSR) to calculate affordability. TDSR caps your total debt repayments to 55% of gross monthly income (including other debts like car loans or personal loans).

If you’re buying with a spouse, combine your incomes and check:

1. Maximum loan amount based on income and age

2. Monthly instalments over 25–30 years

3. Cash flow after monthly expenses

Don’t stretch your budget assuming dual incomes forever. Factor in contingencies like job loss or having children.

Banks don’t just look at your desire to buy — they look at your ability to repay. Use mortgage calculators to project your monthly repayments over 25 or 30 years. Consider fixed vs floating rates and buffer in a 1–2% interest rate rise.

3 Red Flags That You’re Not Ready

1. You’ll Empty Out Your CPF OA Completely

Wiping your CPF clean might feel like maximising your funds — but it leaves you with no reserve for future property payments, emergencies, or retirement.

Plus, CPF usage for housing affects your accrued interest, which must be refunded if you sell later. The more you drain now, the less flexibility you’ll have.

It’s tempting to max out your CPF OA just to afford the downpayment — but doing so leaves you dangerously exposed.

Why it’s a problem:

• You’ll have no CPF buffer for future mortgage payments, especially if your income fluctuates

• You lose the ability to offset interest accumulation, which affects your CPF accrued interest refund when you sell later

• If you’re retrenched or face a health issue, your CPF becomes your backup for housing — and you’ll have none

Try to retain at least 6–12 months of mortgage payments in your CPF OA after purchase. This acts as a safety net during uncertain times. If your CPF account will be completely drained post-upgrade, you may want to reconsider or delay the move.

2. You Haven’t Done a Sell-Then-Buy vs Buy-Then-Sell Analysis

Should you sell your HDB first, or secure your condo first? Many owners don’t realise the implications:

• Sell-first: You avoid paying ABSD but may need interim housing

• Buy-first: You pay ABSD upfront (20%), which can be refunded only if you sell within 6 months

Each path has its risks. Do the math carefully — especially with rising ABSD rates and property holding costs.

This is a critical strategy decision that affects cash flow, tax liability, and even loan eligibility. Many upgraders skip this step — and pay the price.

Let’s break it down.

Scenario: Sell-Then-Buy

• Pros: Avoid ABSD, know your exact sale proceeds, less financial pressure

• Cons: May need temporary housing, moving twice, tight buying timeline

Scenario: Buy-Then-Sell

• Pros: Secure your dream condo without worrying about timing

• Cons: Pay ABSD (20%) upfront, which is only refundable if you sell your HDB within 6 months; higher cash flow needed to carry 2 homes temporarily

Work with an agent to simulate both paths using your personal CPF, cash, and timeline. This decision can cost (or save) you tens of thousands.

3. You’re Relying on Future Pay Raises or Bonuses to Cover Monthly Instalments

If your current income barely qualifies you for the condo loan, you’re taking a risk. Future bonuses and pay raises are not guaranteed, but mortgage payments are.

Hope is not a strategy, especially when it comes to a 25- to 30-year mortgage.

If your current income already stretches your budget, and you’re telling yourself, “I’ll manage once I get that bonus or promotion…”, you’re gambling with your future. Bonuses can be delayed, reduced or removed. Unexpected life events can derail your plan. Rising interest rates can push monthly repayments higher than expected.

Golden Rule of Affordability:

Your monthly loan repayment should not exceed 35% of your take-home pay (after CPF). Ideally, stay even lower for financial breathing room.

Condo living is attractive, but only if it enhances your life without jeopardising your finances. If you check even one of these red flags, pause and reassess.

A delayed upgrade is always better than a rushed regret.

Is There Ever A Right Time?

In real estate, the perfect timing is elusive. The ideal moment often depends on your unique circumstances, not just market trends. Markets fluctuate, and waiting for the "perfect" moment can lead to missed opportunities. Instead, focus on what feels right for you and your life.

If everything aligns, financial readiness, market conditions, and your own preparedness, this might be the moment to jump into condo ownership. Trust your instincts when deciding if now is the time to start this new chapter.

Seeking Professional Guidance

The path to condo ownership can be easier with professional help. A real estate agent who understands your needs can offer insights tailored to your situation. Additionally, financial advisors can break down budgeting and potential costs, giving you clarity on your finances.

Collaborating with experts not only provides you with important facts but also supports your decision-making process. They can highlight upcoming trends and share essential information to help you navigate your options, whether you opt to upgrade now or wait for better conditions.

Your Path to Private Homeownership

Ultimately, deciding to upgrade to a condo is deeply personal and should reflect your lifestyle, goals, and circumstances. By examining the current housing market, assessing your financial health, weighing future prospects, and being honest about your readiness, you can arrive at a decision that feels right for you.

Time and informed research are vital. If you still have reservations, it's wise to take a step back. Yet, if everything aligns, embracing condo ownership could be a fulfilling adventure that opens up new possibilities. With the right preparation and mindset, you may soon find yourself enjoying the lifestyle you've always dreamed of.

Many buyers wait for prices to dip, but the truth is, Singapore’s property market rarely crashes. Even during downturns, good properties in strong locations tend to hold value. Instead of trying to “time the market,” focus on your financial stability, the right property for your needs and lifestyle, and long-term capital appreciation.

Waiting too long can mean missing your HDB’s peak value, or losing out on favourable loan terms as you age.

Ready to see if you can afford a condo without over-stretching? Book a free consultation now to find out.