If you're thinking about buying an old landed house and doing it up into your dream home, I need to be honest with you. The math is getting harder. Land prices have jumped 60% over the past decade, hitting a median of S$4.9 million for landed properties, while renovation costs now run S$480 to S$600 per square foot. That's a pinch that's changing the whole game for buyers and upgraders.
Let's look at what's actually happening on the ground. You'll find old landed units trading hands at S$4 to S$4.2 million, then you're looking at another S$500,000 to S$800,000 in A&A (alteration and addition) works to bring them up to standard. Add those numbers together and you're staring at nearly S$5.2 to S$5 million, which puts you in new-build territory without the fresh warranty or the decade of problem-free living.
What's driving this? The big one is scarcity. Land in Singapore doesn't get any bigger, and developers have already snapped up most of the prime plots. When you're buying an old terrace or bungalow, you're essentially paying for a small plot of ground that's become rare. Freehold land runs S$1,600 to S$2,800 per square foot depending on which district you're in, and those costs filter straight into purchase prices.
Construction inflation is making it worse. Over the past three years alone, rebuild costs have climbed 20% to 30% because of labour shortages and material costs. That S$480 to S$600 per square foot figure I mentioned isn't going down anytime soon. The workers and materials to actually do the work cost more than they did five years ago, full stop.
It's not just landed properties either. Over 1,000 residential developments across Singapore are now more than 30 years old, and they're all starting to show it. Lift upgrading, water main replacement, concrete spalling, façade work - these aren't cosmetic touches. They're expensive necessities that add up fast.
Here's what worries me: sinking fund balances in many of these aging buildings are nowhere near where they should be. Owners are hit with sudden calls for major works that weren't properly reserved for. If you're thinking about buying into a condo built in the 1990s or early 2000s, you need to ask hard questions about what's been deferred and what's coming. Monthly maintenance fees often don't reflect the true cost of keeping a 30-plus-year-old building standing.
The en bloc market for these older condos is also cooling down. As costs mount and owners realise the scale of future works, it gets harder to get consensus for a collective sale. That changes the investment case completely. You're no longer betting on a windfall en bloc in five to seven years, you're betting on holding longer and hoping the building doesn't deteriorate while you wait.
What I'm seeing is a squeeze in the middle. HDB upgraders have historically looked at landed houses as the natural next step up. You've paid off your HDB mortgage, your kids are grown, and you want space and a garden. But the entry point keeps moving higher while construction costs make the refurb bill sting harder.
Compare that to what the government is doing with the HDB Neighbourhood Renewal Programme. They're spending over S$95 million to upgrade more than 15,600 homes across 23 neighbourhoods. That's government-backed, it adds genuine value, and upgraders are getting it for far less than the private market alternative. If you're an HDB owner on the fence about going private, that's becoming a tougher sell.
The investor angle is also shifting. Private residential returns have been running around 4% annualised over the past decade. That's decent, but it's not exciting compared to other asset classes, especially when renovation costs and maintenance surprises eat into your gains. If you're buying an old property expecting appreciation to cover your refurb costs, you need a long hold period and a bit of luck.
Not every old property is worth buying and upgrading. Here's what I tell people to do their homework on.
If you're an HDB upgrader, be realistic about the total cost. That S$4.2 million landed house plus S$600,000 in upgrades adds up to real money. Make sure your financing covers the full picture, not just the purchase price. Also think hard about whether the location and land potential justify it versus staying put or exploring newer developments.
If you're a private property buyer or investor, the landscape is becoming more selective. You can't just buy any old property and assume it'll appreciate. You need to identify estates with genuine renewal momentum, verify the structural and building condition, and factor in realistic renovation costs. Freehold properties need a 15 to 20 year hold minimum to make the numbers work, especially in a market where near-new alternatives exist.
And if you're thinking about en bloc or holding for a collective sale, factor in rising maintenance costs and the tighter consensus required to get a deal done. That windfall you're hoping for is less certain than it was five years ago.
The bottom line: the landed house dream is still achievable, but it's not as straightforward as it was. The costs are real, the capital commitment is substantial, and the returns need time to mature. Do the homework, get professional advice, and make sure you're buying for the right reasons. A property is an asset, but it also needs to be a home you actually want to live in.
If you're weighing a specific property or neighbourhood right now, I'm happy to share what I'm seeing on the ground. Drop me a message on WhatsApp at +65 97501055, or visit keithtanboonkee.com to chat.
25 years experience · 1,000+ transactions · 4,379 TOP units managed
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