Here are the 3 biggest mistakes property owners make, and How to avoid them.

Are you currently a property owner in Singapore? Avoid these mistakes if you own a property in Singapore regardless a HDB, an executive condominium (EC) or a private property.

Do you know that the latest data published by the Department of Statistics Singapore revealed that a whooping 90.4 percent of the resident population in Singapore are homeowners in 2019? 

While over 90 percent of local residents are proud owners of their own homes, there are common mistakes that property owners make that can be easily averted. Read on now to find out more about the top 3 biggest pitfalls that homeowners make and how you can avoid them!

Mistake No. 1: Doing nothing as a homeowner of a HDB apartment

Generally, private property prices have higher margins of price gain as compared to HDB resale prices as the authorities took cooling measures over the years to ensure affordability of public housing for the masses. PPI vs HDB Price Index 

Let’s say you bought a 4-room HDB apartment in the 90s for $110k and held on to it for 30 years– your HDB unit could be valued at $300-$400k currently depending on the location. So, you would gain a profit of up to $290k if you sell your flat now. Sounds great, isn’t it?

Hold on for a minute and consider this alternative scenario. You had several promotions over the years and climbed high enough up the corporate ladder. So, you chose to upgrade your 4-room HDB flat to a condominium and then finally a bungalow over the same period. Your property asset could now be worth more than $10 million—a huge jump from $110k!

Upgrade from a HDB to Private Property

Moreover, there can be other reasons why you would want to upgrade from a HDB flat to a private property. Many Build-to-order (BTO) flats are in newer estates e.g.  Canberra or Punggol which can be far away from workplaces and impact commuting time. You could also have expanded your family size over the years, or you might have asked your elderly parents to move in with you so that you can take care of their daily needs—then upgrading to bigger homes would be ideal. If you have young children, living near the proximity of a primary school of your choice could increase your chances of getting a spot for your child and also cut down on daily travelling time.

Hence, there are indeed a myriad of reasons to upgrade your first HDB flat as not only a long-term investment, but also a more comfortable living space for you and your family

Mistake No. 2: Purchasing an older HDB apartment at a premium after selling current property

So, is selling your current HDB apartment always the best move? Well, yes and no. 

If you are buying an older resale HDB flat at a premium price point after selling your current HDB unit, it is actually a big no-no. Now, your question may be–Why do people buy older HDBs at higher prices then?

Difference of Price of HDB

  1.     Opportunity for Selective En Bloc Redevelopment Scheme (SERS)

Some flat owners may wish to take advantage of SERS to receive compensation packages and rehousing benefits from the government in the event the older housing estate gets selected for renewal. The perks of SERS also include getting the chance to shift to a new flat with a fresh 99 year lease in a nearby neighbourhood.

end of lease of HDB

However, are you aware that SERS is not guaranteed and only 4 percent of all HDB flats in Singapore have been chosen for SERS since 1995? What’s more, it was reported in Straits Times (2018) that the price gap between HDB houses older than 40 years vs HDB under 40 years can be as big as 65 percent!

  1.     Waiting for Voluntary Early Redevelopment Scheme (VERS)

Similarly for the Voluntary Early Redevelopment Scheme (VERS) , some precincts that are more than 70 years may be identified for redevelopment before the 99 year lease is up. However, the compensation package offered by the government would be less generous and VERS is also not guaranteed.

  1.     Wanting to stay near parents and relying  on HDB grants

Some homeowners may decide to purchase more expensive older resale flats (more than 40 years) as they wish to stay near their parents and hope to receive HDB grants at the same time. But, it is important to keep in mind that due to the shorter remaining HDB lease, the value of the property actually diminishes over time. Also, you may not enjoy the full housing loan as you are no longer a first time buyer so you would be expected to fork out more cash. 


You may be wondering–How about using CPF to finance the flat purchase then?

Well, if you are the youngest buyer and the remaining lease of the flat is lower than 95 years, you cannot use 100 percent of your CPF. In other words, you need a lot more cash to pay for the older but more expensive HDB flat!

Mistake No. 3: Overcommitting to a new house after selling current HDB apartment

The third most common mistake that homeowners make would be overcommit to a new property after selling off their current HDB unit.

Wait a second— doesn’t this point contradict the first idea on upgrading your property over the years?

Well, the takeaway here is that you should assess your own financial situation objectively before making any decision to upgrade to a new home. This is to prepare for the worst-case scenario where both homeowners lose their primary sources of income and have little funds left to finance the home mortgage.

Here is a quick checklist to gauge whether you are over-stretching your finances:

  1.     Do you have at least 6 months of savings for living expenses after factoring in the mortgage? You should have sufficient funds for the above before purchasing the new home.
  2.     Is the gross property price around 5 years of your yearly household income? It should ideally be less than 7 years of the yearly household income in order to ensure that you are not overcommitting.
  3.     Are your monthly mortgage repayments less than 40 percent of your household income? You need to ensure that you have sufficient funds to pay off the loans after spending on household expenses.

You may feel that it is fine to go ahead and upgrade to that luxurious condominium even without meeting the above requirements as it may be very unlikely for you and your spouse to get retrenched.

However, life is unpredictable and full of changes. It is very hard to anticipate sudden events such as a world-wide pandemic like Covid-19 or even suffering from serious health issues in the future. You may then need the extra cash immediately and be unable to finance the mortgage for the lavish new house. Additionally, costs like the Seller’s Stamp Duty (SSD) can also greatly dampen the proceeds from the selling of your property in the future.


Being a property owner is something to be proud of. At the same time, it is also a long-term commitment. In order to learn how to purchase properties with greater growth potential in the long run, it would be best to avoid the top 3 biggest mistakes that other homeowners make for a start.

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