is hdb flat really an asset

We have long understood that real estate properties are always regarded as assets.  Since HDB flat is a type of property, can we conclude it as an asset?

People nowadays start questioning whether HDB flat is an asset or a liability.  It also became a hotly debate issue of whether residents own, lease or rent their HDB homes.

“HDB flats are sold on a 99-year lease,

the relationship between

HDB and its buyer is known as

Lessor – Lessee.”     

If you buy a private condominium, upon completion (also known as Temporary Occupation Permit & Certificate of Statutory Completion) the developer will transfer the Strata Titles over to the individual buyers.  But for public housing, the property title remains with the Housing & Development Board.  This is why you are not allowed to use your HDB flat even it is fully paid, as bank collateral to raise credit facilities for private reasons.

Understanding The Definition of Asset:

  • An asset is a resource with ‘economic value’ that an individual, corporation or country owns or controls with the expectation that it will provide a future benefit –
  • Assets are the economic resources a business uses to accomplish its main goal, that is to increase the owner’s wealth –

In simple words, assets are economic resources which can be owned and at the same time they are expected to provide future economic benefits.

“Investors buy assets

understanding that these assets

should at least hold and also grow

their economic value over time.”

One of the characteristics of an asset that it will provide ’Future Economic Benefit’ means, an asset has the capacity to benefit the owner when it is exchanged for something else of value or when it is used to produce something of value.

“A good asset

creates and preserves


Understanding The Facts of HDB Flat:

  • Established on 1 February 1960 by Singapore Government as an answer to the nation’s housing crisis.
  • The mission is to provide quality and affordable Public Housing for generations of Singaporeans.
is hdb really an asset

By looking at the facts above we can easily understand that the objective of building HDB flats is mainly for Singaporeans to have a roof over their head, not as an investment option.  In line with the mission that it has to be affordable, besides selling them at subsidized prices, Singapore government provides Grants as well.  The various type of grants given make the price of HBD flats even lower, as such there is no reason that Singaporeans could not afford a home.

is hdb flat really an asset

As heavily subsidized public properties, Singapore government imposes a lot of restrictions and regulations on HDB flats.  Although its resale price is still determined by the market, but government’s invisible hands play a significant role in controlling it as to stop buyers from speculating with this property.  This is the reason why the capital appreciation of HDB flats cannot be as high as private properties.

“Now, with a lot of

government restrictions and interferences

to keep the price remains

reasonable and affordable,

is HDB flat still a good asset or

even an asset?”

HDB could still give some benefits when the country does well economically as it is the time when property prices will shoot up.  As a country prospers and incomes rise, property values will then appreciate together with the fundamentals of the economy.

Nevertheless, it’s unrealistic to think that even for fast developing countries in the region will still be growing as quickly as they did in the past.  As things are drastically different now, we can no longer assume that our HDB flats would be able to sell at a huge profit like 10 or 20 years ago.

On a side note, do you know that the longer you keep your flat, the higher chance you will have a negative sale?  People love the possibility of buying a house without using their cash savings and here in Singapore, it is possible to do so.  Singapore government allows us to draw some savings from our CPF accounts to buy properties.  However, quite a number of them are still not aware that if they use CPF savings to finance their properties, they will have to return the principal back into their CPF accounts PLUS additional ACCRUED INTEREST upon selling it.

“The worst possibility is,

you might not even profit from

your flat sale.”

Let’s look at this simple illustration:

You draw $400,000 cash from CPF account to pay your flat in full.  Do you want to know how much your accrued interest is when you sell the flat, let’s say 10 years later?

Based on the current Ordinary Account interest of 2.5% per year, your accrued interest can easily reach $112,000, which means you will have to return a total of approximately $512,000 back into your CPF account.

Now, some people will say that it is still their money anyway and they always can ‘reuse’ it to buy other property.  It sounds true, BUT has it ever come across your mind that if you just leave the money inside the account for 10 years, it would have earned that $112,000 on its own accord?  Because you had touched it, now you must fork out this amount of $112,000 AT YOUR OWN EXPENSE.  See the difference now?

is hdb really an asset

“At this point,

does HDB flat fulfill

the characteristics of an asset that

it should be able

to provide a future benefit


to increase the owner’s wealth?”

So, is your HDB flat just a home, an asset or a liability?

Well, these 3 questions will help you to find the answer:         

  1. How long you have been holding on to your flat?
  2. What is the market condition when you finally decide to sell it?
  3. How much the accrued interest costs you at the point of selling the flat?

I want to have more than just a home.  Is there any chance to turn my HDB Flat into a ‘real’ asset?

If you are a current owner of a HDB Flat and ready to go up to the next level, the answer is YES!

In fact when your flat has reached the MOP, it is now the time to consider an upgrade while at the same time turning your property into a ‘real’ asset.

What Options Do I Have?  What is Best for Me?

In this article, we will explore two options commonly picked by HDB owners:

Rent your HDB Flat and use the rental income to finance a second property

Many people prefer this option thinking that their HBD flat is already a ‘precious’ asset as it could function as a ‘Golden Goose’ laying ‘Golden Eggs’.  The truth is, we must always look at something from different angles such as the pros and cons below:


  • You can be the owner of two (2) properties.
  • You can serve the loan using the rental income.
  • In case you decide to use the second property for own stay, you will not be disturbed by timeline as you do not need a transition home.


  • You’ll be burdened by the 12% ABSD (on top of the 3% BSD) and restricted by MAS regulations on Loan-to-Value (LTV) of 45% for purchasing a second property (if you are still serving an existing loan).
  • If your cash saving is insufficient and you need to use CPF to finance this purchase, there will be a limitation of CPF withdrawal on second property bought. You must set aside the current Basic Retirement Scheme (BRS) then you are allowed to use the excess of your CPF Ordinary Account savings for your second property.

Sell your HDB Flat and use the cash proceed to buy an Executive Condominium (EC) or a Condominium


  • As you are now left with zero property, you can avoid paying ABSD and secure up to 75% loan when you are upgrading to a new launch EC or a Condominium.
  • By selling first you will likely have more than enough resources to finance your new home, you will also have the chance to ‘sell one buy two’ on your next property purchase by doing the ‘Decoupling’ or ‘Property Wealth Planning’.


  • You have to let go and move out of your so-called ’safe and comfort’ zone.
  • You will also need to rent a temporary accommodation until your new home is ready.

If I currently can only afford a HDB Flat, should I buy anyway?  

For those who have limited budgets and resources but wish to have home, buying a HDB flat is definitely a safe option.  Having a status as public housing, we can actually benefit from its subsidized price.  HDB does not only offer ‘low entry price’ but also ‘HDB loan’ (first check your eligibility) which make it easier for you to be a property owner.

Don’t wait until you have ‘enough’ saving to go straight to EC or condominium because saving will never be enough to catch up with the inflation and property price appreciation.  It is more important to begin with something within your reach rather than parking your money in banks, or worst, playing ‘wait and see’.

Do take note that as a property, HDB flat still has the characteristic of ‘inflation proof’.  When the economy is good, it will still give you some appreciations.

is hdb flat really an asset


do not hold it for too long

as it could turn into

a depreciating asset

or even

a liability instead.”

Ideally within 5 to 10 years later, be prepared to use your HDB flat as a stepping stone into the property investment arena and turn it into a far more valuable asset.

hdb as a stepping stone

Is EC or Condominium an Asset?

Both EC and Condominium fall into ‘private’ housing category while HDB flats fall into ‘public’ housing.  Naturally as private properties, the government will have lesser restriction and intervention unless the market is getting too hot and they need to cool it down.

Besides, private properties such as condos are built as part of investment options not just for housing purpose.

With this nature, private properties can be expected to have higher capital appreciation in the long run as compared to public housing.

By looking at the graph below we can see that after a long downturn on both HDB and private properties price index, finally in 2017 onwards there is a rise in private property price index while HDB resale index continue to decline, until they finally formed a widening gap.

As such, they are more likely fit to be assets as they fulfill the characteristic of an asset that is to provide ‘Future Economic Benefit which will not only preserve but increase the owner’s wealth as well’.

Thinking of ‘Property Wealth Planning’ or Considering to ‘Upgrade’ your property?

Drop me a message for a non-obligatory property consultation if you still have questions or doubts.  I am here to help you exploring your best potentials and options, be it for your own stay or investment.


Lina Halim is on a mission to assist you in reaching your real estate goals.

As a Senior Associate Director with OrangeTee & Tie Pte Ltd, she takes the time to listen and understand your unique needs, only to plan and tailor a custom strategy that will help you acquire the specific property assets.

Never a fan of high pressure tactics, Lina centers her business on being committed, sincere and genuine with her clients.

She uses her real estate experience and property market knowledge to scope out only the most fitting opportunities for her clients.

Be it a need to get the right buyer or seller, she always put the client’s interest and ultimate goals as her priority.

property agent

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