Why you should rethink upgrading to a condo for ‘asset progression’

The other side of the property agent pitch.

DISCLAIMER: THIS IS A SUBSTACK-EXCLUSIVE ARTICLE BROUGHT TO YOU BY THE WOKE SALARYMAN.

We’ve been getting quite a lot of comments from property agents on our posts, especially this one about one of our readers retiring early and choosing to stay in an affordable HDB flat.

The gist of their argument is this: By continuing to live in an HDB instead of reaching for a private property, you’re leaving money on the table. HDBs, after all, suffer from lease depreciation. The older they are, the less valuable they get.

And therefore, you should upgrade. Empty your bank account. Your CPF. Borrow money from your parents. Whatever it takes.

Well, obvious conflict of interest aside, today’s newsletter will explain why you should take their words with a pinch of salt.

(Yes, this piece will rankle many owners and agents, but we do believe it’s high time to rip these narratives to shreds.)

But first, do they have a point?

Property, especially private property, is worshipped as the superior investment choice in Singapore for good reason.

Many boomers experienced the rise of Singapore, and benefited from property as a result. More recently, many younger property owners saw property prices surge during COVID.

And you know what they say: nothing is as powerful as lived experiences.

Another POV is that property is tied to Singapore’s prosperity. Unlike other countries with multiple cities, Singapore only has one city. If Singapore (the city) is no longer an attractive place to live, work, and play, then Singapore (the country) is pretty much screwed.

But we also argue that the best thing about property is actually that it forces you to be consistent.

Many people might stop dollar-cost-averaging into VWRA/CSPX/IVV when the market is low, but a mortgage forces you to keep paying, ensuring you stay invested. Time in the market, not timing the market, amirite?

For the right person with enough income and wealth, property can be a tool. But ONLY if they understand the following caveats:

A home gets emotional, fast.

Buying a condo is often pitched as killing two birds with one stone. Live in a premium property, but also grow your net worth at the same time.

I’d argue that for many people, living in a condo also becomes their identity and lifestyle. Which, of course, involves emotion. And once something becomes emotional, it stops behaving like an “investment”.

People refuse to sell because this is our home. They renovate because we deserve it. Upgrade because we don’t want to fall behind. Avoid downgrading, because they’ll lose face.

Hold on even when the numbers no longer make sense, because selling feels like admitting they made a mistake.

There’s nothing wrong with caring about your home. But it’s precisely why treating your primary residence as an investment can get messy, fast.

A condo overconcentrates your finances

If you’re buying a $1.5 million condominium, for instance, you’ll need to put down 25% as downpayment. That’s $375,000.

For our readers not born into generational wealth, this will likely be a huge chunk of their net worth — especially in their 20s and 30s. That’s classic overconcentration risk. Putting all your eggs in one basket.

And while many might push the narrative that property prices always go up in Singapore, this isn’t always the case. Even if the long-term trend is up, your personal outcome depends on your entry price, interest rates, and whether you can hold through a downturn without being forced to sell.

A condo can easily become golden handcuffs

Because property is unaffordable, most people will stretch their mortgage to 30 years to make monthly payments more manageable.

Here’s the kicker: this means they are also making a career bet that they will remain relevant for 30 years. Potentially signing cheques their career can’t cash.

During your peak earning years, a condo seems like a great idea. But fail to stay relevant, and it becomes stressful real quick.

In 2025, we all know how hard that is. Most people’s careers peak in their 30s and 40s, and decline after.

Yet, unlike index investment plans that can be stopped or paused, property demands you make payment. Month after month, year after year, long after you’ve peaked in your career.

And what if you need cash? Unless you sell, it’s not easy to unlock value from a home you’re still paying the mortgage for, especially if you’re still living in it.

So let’s be clear: Property wealth can be real. But it’s often locked up inside the thing you live in. That’s very different from having a liquid portfolio you can draw down gradually.

Don’t forget the costs!

Property has friction costs everywhere.

When you buy, you pay stamp duties, legal fees, valuation fees, and often renovation costs that can easily run into tens of thousands.

When you sell, you pay agent fees and legal fees again. And because property takes time to transact, there’s also timing risk. If you’re forced to sell during a weak market, you may not get the outcome you expected.

Even when you’re not transacting, property costs money to keep. Condos have maintenance fees that never stop. Older properties have rising repair costs. Even HDB flats have upkeep: leaks, electrical issues, aircon replacement, wear-and-tear.

These costs are easy to ignore because they don’t show up as one dramatic number. They leak out slowly over years.

‘Property always goes up’… but so what?

So do gold, stocks, commodities — or plenty of other assets, over long enough timelines.

The difference is that most of those assets don’t come bundled with a 30-year mortgage and a lifestyle commitment.

A portfolio of equities can go up without forcing you to stay employed at a certain income level for decades. You can pause contributions. You can sell a small portion. You can rebalance. You can downsize risk without uprooting your life. Same with gold.

Property doesn’t work like that. Once you buy big, you’re committed. To monthly payments and interest rates you don’t control, and to a housing standard that becomes hard to step down from without a major life change.

That’s why “always goes up” is the wrong lens. The better question is: what does this asset demand from me in exchange for its returns?

Yes, an HDB doesn’t build wealth. But it provides the cashflow to build wealth.

If staying in an affordable HDB lets you invest the surplus consistently into a diversified portfolio, your net worth can grow faster even if your flat doesn’t have condo-like upside.

That’s the whole point: the wealth engine is not the flat — it’s what the flat allows you to do with your cashflow.

Stocks — especially globally diversified index funds — let you own thousands of companies across countries and sectors. You can invest small amounts consistently. You stay diversified. And you keep liquidity.

Bonds, SSBs, and CPF provide stability. They reduce the chance that one bad period derails your plan. Cash is not an “investment”, but it buys you resilience and prevents forced selling.

For many people, staying in an affordable HDB doesn’t slow down wealth building — it speeds it up. Because it keeps fixed costs low, increases investable surplus, and makes your life less fragile in an era of fading job security.

And at a time where many Singaporeans are complaining about stressful, stressful lives, overreaching for a property beyond their means is the last thing we advocate for.

Stay woke, salaryman.

What we foresee in the comments section

“I agree condos have risks, but historically in Singapore, property owners have done very well. Even with cycles, prices trend up over decades, and leverage amplifies returns in a way stocks usually don’t for ordinary households.”

That’s a fair observation. Leverage has amplified returns for many owners, especially those who bought earlier, at lower prices and interest rates.

The question isn’t whether leverage works. It’s whether today’s buyers have the same margin for error. When prices and loan tenures are already stretched, leverage magnifies downside just as much as upside. Add in weaker job security today, and the ability to survive a long mortgage becomes a much bigger variable.

Past outcomes don’t guarantee the same risk-adjusted results going forward.

“Property forces savings in a way stocks don’t. Most people panic sell equities or stop investing when markets fall, but a mortgage forces discipline and prevents bad behaviour.”

Forced discipline can help. But only if the obligation remains affordable under stress.

A mortgage doesn’t just prevent bad investing behaviour; it also removes flexibility when income drops or careers stall. Discipline that assumes uninterrupted earning power can quietly turn into fragility when conditions change.

“Stocks are volatile and psychologically hard to hold. Property feels more stable and less prone to sudden crashes, which makes it safer for most families.”

Property feels more stable largely because prices aren’t marked to market every day, not because risk is lower.

Property risk tends to surface through job loss, interest rate shocks, or forced selling, often all at once. Stocks are visibly volatile, but diversified portfolios allow partial selling, rebalancing, and risk adjustment without uprooting your life.

Stability and safety aren’t the same thing.

“Even if returns aren’t spectacular, at least property is something you can live in. Worst case, you still have a roof over your head, which you can’t say about stocks.”

Housing security matters. But that’s an argument for having a home, not necessarily for maximising leverage on it.

A fully paid or affordable home reduces risk. A highly leveraged one increases dependence on continued income. The utility of shelter doesn’t automatically make the financial structure resilient.

“Stocks don’t always go up. Japan is a classic example. Property in Singapore is backed by strong fundamentals and government policy.”

That’s true. Stocks don’t always go up, especially when concentrated in a single country. That’s precisely why diversification matters.

Global equities reduce reliance on any one economy or policy regime. Property – especially Singapore property – by contrast, concentrates exposure in one country, one market, and for many people, one specific unit in a condo.

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