Does new condo make better sense than million-dollar HDB resale flat?

Seven figures, two commas and a sticky conundrum.

That’s what my partner and I have on our hands as we search for our first home, in a market where million-dollar price tags are more prevalent than we expect for the resale Housing Board flats we have been eyeing.

Which means that private property, which we previously thought was an unimaginable indulgence, now seems a more compelling alternative than it ever did.

We don’t seem to be alone in this.

The sweet spot

We have a pretty clear idea of what we want: a late-1990s-to-mid-2000s-built flat in a maturing estate, closer to town.

Not too sterile, not too new; cosy and yet sufficiently spacious to host friends sometimes, and we were willing to pay more than bargain-bottom, in view of our income level and lifestyle aspirations.

But we were humbled during house visits and listing trawls, $80,000 resale grant notwithstanding.

To be clear, there are still relatively more affordable Build-To-Order (BTO) flats, especially farther into the heartland such as Tengah.

As a couple who got together after some years in the workforce, our housing journey started much later than friends who committed to a BTO unit in university, so we baulked at the wait.

Yet, we also were not old enough to each have public housing of our own, let alone afford private property.

Though we have put in a moonshot BTO application before our combined income rises past the prevailing $14,000 monthly income threshold for most family applicants – our metaphorical floor is littered with failed ballots in sales of scarce balance flats – our energies have recently been mostly directed at resale flats.

We did not expect that the prices of many of these units we liked to edge close to, or over, $1 million, at the city fringe, even for those approaching a third of their 99-year lease.

Data shows that

6.5 per cent of HDB resale transactions in October

2025

fetched over $1 million

– and a record 172 such transactions were notched in the month before.

ERA Singapore key executive officer Eugene Lim previously told The Straits Times more buyers could have opted for private homes, given that prices of smaller units in new-launch condominiums are “just marginally higher” compared with larger HDB flats that transacted at over $1 million.

He gave the example of Penrith, a 99-year leasehold development in Margaret Drive that launched in October, where the lowest-priced unit was $1.44 million for a 613 sq ft two-bedroom type.

Mr Lim said: “A segment of home owners is also making the leap from HDB flats to condominiums, as this narrow price margin has made private property more attainable.”

My partner and I can relate to the group he speaks of.

A million reasons to say yes?

As young millennials (or elder Gen Zs, depending on how you slice it), we grew up in a time when flat prices largely stayed well under $1 million, except for the largest, most central units with extra-premium features, from the 2010s.

Despite rising incomes and costs obviously impacting prices, we had been oblivious to the growth of the million-plus segment to make up 6.5 per cent of transactions, and the new reality has reshaped our perception. Consumer psychology can help us unpack this.

There is only $1 of difference between $999,999 and $1,000,000. Yet, the gulf feels disproportionately larger than the difference between $999,998 and $999,999.

This is what consumer psychologists call the “left-digit effect”, a key insight from empirical research into how people perceive prices.

In my view, this is accentuated by the context of the housing market here for younger buyers. For many peers around us, condos were always the option that was out of reach – one more digit, an entirely different and higher order of magnitude in price.

But with resale flat prices reaching new highs into the same order of magnitude more frequently, condos now present an alternative that warrants closer evaluation of the pluses and trade-offs.

The trade-offs

I reached out to Ms Christine Sun, chief researcher and strategist at Realion (OrangeTee & ETC) Group, to understand more.

Anecdotally, young individuals who choose private properties often have higher incomes or have surpassed income thresholds, making them ineligible for BTO flats, she said.

“If we consider the price from $1 million to less than $1.5 million, these apartments typically range from studios to two-bedroom units for new sales with sizes up to 800 sq ft.

“These condos are often purchased by investors looking to lease them out for rental income, or they are bought for personal use by young executives or couples without children.”

Resale condos in this price range can include bigger units of 1,200 to 1,600 sq ft, but they could be older and in the suburban areas, she added.

In total, data shows more than 1,400 resale private non-landed homes of 500 sq ft to just under 800 sq ft changed hands from January to October 2025, excluding executive condominiums, in the $1 million to $1.5 million range.

There were more than 1,150 of such resale homes of 800 sq ft to just under 1,200 sq ft in size sold over the same period.

However, Ms Sun highlights the need for young couples to consider their future needs clearly.

“If they purchase smaller new condos, they may find the space inadequate later should they decide to get married and have children.”

Older condos may also involve additional renovation costs.

As for what can be done to attract this crossover group, Ms Sun said many developers may try to keep space optimal so as to keep the price quantum affordable for buyers.

This means that spaces might be smaller than a similarly priced resale flat, but not by so much as to be too cramped, especially with well-designed layouts that minimise wasted space.

“Attractive mortgage packages could also be offered by the various banks, where the interest rates are much lower when compared with buying an HDB flat with an HDB home loan.”

Aside from developers’ efforts, Ms Sun said many young couples are drawn to buying condos due to their facilities, exclusivity and privacy.

“Moreover, condos often come with comprehensive furnishings, which can be a significant advantage as buyers do not need to incur too much cash or effort to do the renovation on their own.”

This may further close the gap than what the price tag suggests, as Ms Sun noted new HDB flats usually come with minimal furnishings.

Past playing house

But perhaps the wider significance of this reflection is the growing spread of aspirations and how housing journeys express these aspirations among young Singaporeans.

In this vein, a recent conversation with an old friend frustrated with his housing search surprised me with a total 180-degree turn from conventional wisdom.

He, every bit a savvy young investor, thought out loud: “How about renting a home and using what would have been the down payment for investment?"

His point: Must we even need to default to home ownership, when in some cases, there might be an opportunity cost of doing so in a time when key asset classes such as equities generate stronger returns.

Be that as it may, home is what we make of it, a little castle in the sky.