Aspiring HDB upgraders plan to buy private homes below $2.5 mil, prefer RCR and OCR condos: survey

More than half of HDB flat owners polled in a recent survey hope to own a private home one day, with the lion’s share of them setting their upgrading budget at below $2.5 million.

By region, aspiring upgraders generally prefer to own and live in a private condo in the Rest of Central Region (RCR) or city fringe, as well as the Outside Central Region (OCR) or suburbs.

These are part of findings released on Aug 12, from PropNex’s survey of 1,533 flat owners between February and June this year.

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That said, wanting to upgrade is not the same as being dissatisfied, as nearly three-quarters of respondents said their current flat adequately meets their housing needs.

Satisfaction was the highest among those who have lived in their HDB flat less than 10 years, as well as those past the 20-year mark.

City-fringe condos in the lead

Nearly 45% of HDB homeowners surveyed said they had no plans to upgrade to private housing, while 55% were keen to do so eventually.

Those with private housing aspirations mainly favoured condos in the RCR (18.3%) or OCR (15.7%), followed by landed homes, and then condos in the Core Central Region (CCR).

Proportion of respondents by housing aspirations, by length of stay in current HDB flat:

"The assumption has long been that an HDB upgrader naturally gravitates towards private homes in the OCR," said Wong Siew Ying, head of research and content at PropNex Realty.

In this survey, however, the city fringe edges slightly ahead, with 18.3% favouring an RCR condo, as compared with 15.7% for the OCR.

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"Respondents are likely drawn to the RCR as it is seen to strike a balance between convenience and affordability," said Wong.

She reckoned a reason the CCR drew a more muted response might be a perception gap, as some upgraders could be assuming that prime districts are beyond their means.

However, caveat data indicates that 52.8% of new and resale non-landed homes sold in the CCR last year were priced below $2.5 million — which is the budget at which many respondents were working with, Wong said.

"While prestige still appeals, respondents may also be prioritising affordability, ease of commute and overall value when choosing a home," the report noted.

Furthermore, many homes in the RCR and OCR likewise offer strong locational attributes, comprehensive amenities and quality products, which could make them increasingly appealing alternatives.

Familiarity also appeared to be a key factor. A sizeable 40.6% of flat owners would prefer to buy their next home near where they currently live, such as in Tampines, Toa Payoh, Punggol and Houggang.

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Other considerations included proximity to an MRT station or transport hub (77%), a reasonably priced property (67%), and adequate living space (42%).

Housing budgets are mostly below $2.5 mil

Meanwhile, the most-cited budget band for a private home purchase was $1 million to under $1.5 million, followed closely by the below-$1 million band.

Only 7.9% of respondents indicated a budget of $2.5 million or more.

Proportion of respondents by housing budget range for a private home purchase:

Taken together, about 92% of respondents set their budget at below $2.5 million if they were to buy a private home.

PropNex noted that flat owners’ budgets and developer pricing "may be converging to some extent".

This is considering that about 62% of new non-landed private homes (excluding executive condos, or ECs) sold in the first half of this year were priced below $2.5 million — the so-called “budget sweet spot” for buyers.

Softer sentiment on executive condos

Compared to PropNex’s previous survey conducted in 2024, sentiment on ECs has softened among HDB homeowners.

In the latest survey, about 37.7% of respondents said that ECs remain relevant in catering to the private housing aspirations of middle- and upper-middle income families. That is down from 44.6% two years ago.

At the same time, 23.3% disagreed that ECs were relevant in this context, which is more than the 19.5% who disagreed previously.

On pricing, fewer also considered new EC prices affordable today, with 10.9% saying so in this year’s survey, down from 13.1% in 2024.

PropNex said this shift likely reflects the steady run-up in EC prices, which may have turned some households away from ECs. The median transacted unit price for new ECs reached $1,844 psf in the first half of this year, up from $1,537 in 2024.