View Full Version : Seeking advice: Resale HDB or condo
Hi all,
Good evening. I would like to seek some property advice on here on our situation.
We are a Singaporean couple in our early 30s planning to get married this year and buy a house.
Currently our financial standing is:
- no other debts, no plans to buy a car
- we can put down a downpayment of 400K (100K CPF and 300K cash)
- we have about 100+K left in cash for emergency use
- our combined salary is slightly over 12K per month
- Both my partner and I have committed to putting down 5K every month and additional rental proceeds (if any) going forward into an account which we will use for further property purchase in future. This is assuming our pay is stagnant over the next 10 to 15 years and we both keep our jobs. We expect to have about 400K in cash after 5 years for another downpayment, not including our emergency funds.
I believe we might not have a chance to get a BTO even after appealing, so pretty much our choices are getting a resale HDB or a private condo (we do not wish to get an EC). Our priorities are to find a home that is near to the MRT as we do not intend to have a car, and also rent it out for the next couple of years. There is a possibility that we both might be transferred out of Singapore to work again after the next 2 to 3 years.
We both agree that our first or 2nd home will not be our dream home.
2 options we are looking at are:
1. Resale EA size HDB in Jurong near to MRT, which is also near to both our parents. (about 600K SGD)
2. Freehold condo in near to Aljunied (about 105 sq m), (1.2 million), 15 year old condo.
Our thoughts (or dilemna) are:
1. If we go for the resale HDB, we can put down 350 to 400K and comfortably use our CPF to pay off the installments over the next few years. We cannot rent out the whole HDB unit, but can only rent out 2 bedrooms.
However, this option would definitely be less risky as we do not need to cough out more cash to pay off the rest of the flat, and can use the 400K we have in 5 years time for another downpayment for a new property. By then, if we wish, we could also come up with the $ to pay off our HDB flat, or keep using our CPF to pay off the flat.
2. If we go for the condo, we like the fact
- that it is a freehold condo, that the interior is not so newly decorated (we like to remodel our own home for own stay in the event that we would like to, hence no need to buy a newly renovated place).
- it is very near to MRT too
- we can rent it out immediately.
- We intend to use the cash from our joint account that we commit 5K or more every month, to pay off part of the loan after each year.
- it will take us about another 8 years to fully pay off the 1.2 million, assuming a 4% interest rate.
Based on the above, I guess we are in a dilemna because we would like to rent out the whole resale HDB but we cannot, yet at the same time it would allow us to have a fully paid up HDB within the next 3 years, and have another 400K or so ready in 5 years time for another downpayment, without touching our emergency funds. I guess what I mean is, I think we can achieve 2 fully paid up homes (1 HDB + condo) faster than if we were to buy 2 condos in future.
The attractive part about the condo is that we like its proximity to MRT and also that it is freehold, and no restrictions on renting out.
Would really like to seek some advice from the forummers on your opinions and feedback, or if there are other considerations we might have missed out on. Thanks!
HDB... you can get a good HDB in Queenstown, RedHill or Bishan... With the same amount of money, you can only get condo in Pasir Ris, Yishun, etc...
get a good resale HDB near your parents. Obtain therefore the subsidies. By your combined income and even assuming no change in income revenue for the next 5 years of MOP - that will translate to a sizeable income for purposes of investing in an MM for investment rental yield.
My sense is that MM will remain attractive going forward, with careful thought from your end on locality and amenities etc.
get a good resale HDB near your parents. Obtain therefore the subsidies. By your combined income and even assuming no change in income revenue for the next 5 years of MOP - that will translate to a sizeable income for purposes of investing in an MM for investment rental yield.
My sense is that MM will remain attractive going forward, with careful thought from your end on locality and amenities etc.
Danguard, good evening.
I am not sure if I read correctly from the HDB website but I think if your salary exceeds 10K, you are not allowed to apply for any housing grant? If we really can, that would be very good news.
Yes to be honest I am really reluctant to pay 600K for a resale HDB, but the size is good in the event we want to move in, and its near to MRT, near to our workplace. We were thinking, if we already cough out 600K, would it then make sense to cough out another 600K and go for the freehold condo immediately? But certainly getting the condo now, would mean it would take longer for us to own 2 properties which are fully paid up.
forget about hdb ... u are in a different league altogether:D
Danguard, good evening.
I am not sure if I read correctly from the HDB website but I think if your salary exceeds 10K, you are not allowed to apply for any housing grant? If we really can, that would be very good news.
Yes to be honest I am really reluctant to pay 600K for a resale HDB, but the size is good in the event we want to move in, and its near to MRT, near to our workplace. We were thinking, if we already cough out 600K, would it then make sense to cough out another 600K in future for a freehold condo? But certainly getting the condo now, would mean it would take longer for us to own 2 properties which are fully paid up.
apologies my bad if that is the case. Bought my HDB quite some time back. Your scenario is not unlike mine (esp the combined household income bit).
But a resale HDB would require that both names be in if you are a married couple? The additional ABSD (assuming the cooling measure is not going to be off by then) will probably hit you quite hard though.
I was fortunate in that my MOP is already up and near conclusive stages of selling my HDB now. Its fetching a decent price, with which I intend to then decouple 2 condos. 1 for stay and another MM for investment. With buffer interim measure to stay at my parents place. Buy just one condo for stay. The MM investment one can wait for a long while before deciding basis current trend that prices might correct (not drastic dip) slightly post CM7. Best of both worlds if u ask me heh.
There is no need to rush to pay up in full now given the low interest rate regime at the moment. I suggest u putting that cash as buffer for a while first and observe the market. If interest rate really spikes up,then prepay. Just ensure that your mortgage is one of a min 1 year lock up period only
CondoSeeker2012
04-03-13, 20:30
Hi all,
Good evening. I would like to seek some property advice on here on our situation.
We are a Singaporean couple in our early 30s planning to get married this year and buy a house.
Currently our financial standing is:
- no other debts, no plans to buy a car
- we can put down a downpayment of 400K (100K CPF and 300K cash)
- we have about 100+K left in cash for emergency use
- our combined salary is slightly over 12K per month
- Both my partner and I have committed to putting down 5K every month and additional rental proceeds (if any) going forward into an account which we will use for further property purchase in future. This is assuming our pay is stagnant over the next 10 to 15 years and we both keep our jobs. We expect to have about 400K in cash after 5 years for another downpayment, not including our emergency funds.
I believe we might not have a chance to get a BTO even after appealing, so pretty much our choices are getting a resale HDB or a private condo (we do not wish to get an EC). Our priorities are to find a home that is near to the MRT as we do not intend to have a car, and also rent it out for the next couple of years. There is a possibility that we both might be transferred out of Singapore to work again after the next 2 to 3 years.
We both agree that our first or 2nd home will not be our dream home.
2 options we are looking at are:
1. Resale EA size HDB in Jurong near to MRT, which is also near to both our parents. (about 600K SGD)
2. Freehold condo in near to Aljunied (about 105 sq m), (1.2 million), 15 year old condo.
Our thoughts (or dilemna) are:
1. If we go for the resale HDB, we can put down 350 to 400K and comfortably use our CPF to pay off the installments over the next few years. We cannot rent out the whole HDB unit, but can only rent out 2 bedrooms.
However, this option would definitely be less risky as we do not need to cough out more cash to pay off the rest of the flat, and can use the 400K we have in 5 years time for another downpayment for a new property. By then, if we wish, we could also come up with the $ to pay off our HDB flat, or keep using our CPF to pay off the flat.
2. If we go for the condo, we like the fact
- that it is a freehold condo, that the interior is not so newly decorated (we like to remodel our own home for own stay in the event that we would like to, hence no need to buy a newly renovated place).
- it is very near to MRT too
- we can rent it out immediately.
- We intend to use the cash from our joint account that we commit 5K or more every month, to pay off part of the loan after each year.
- it will take us about another 8 years to fully pay off the 1.2 million, assuming a 4% interest rate.
Based on the above, I guess we are in a dilemna because we would like to rent out the whole resale HDB but we cannot, yet at the same time it would allow us to have a fully paid up HDB within the next 3 years, and have another 400K or so ready in 5 years time for another downpayment, without touching our emergency funds. I guess what I mean is, I think we can achieve 2 fully paid up homes (1 HDB + condo) faster than if we were to buy 2 condos in future.
The attractive part about the condo is that we like its proximity to MRT and also that it is freehold, and no restrictions on renting out.
Would really like to seek some advice from the forummers on your opinions and feedback, or if there are other considerations we might have missed out on. Thanks!
Where will you stay?
Or is the above under the assumption you will be overseas.
In which case, why can't you rent the HDB fully?
Danguard, good evening.
I am not sure if I read correctly from the HDB website but I think if your salary exceeds 10K, you are not allowed to apply for any housing grant? If we really can, that would be very good news.
Yes to be honest I am really reluctant to pay 600K for a resale HDB, but the size is good in the event we want to move in, and its near to MRT, near to our workplace. We were thinking, if we already cough out 600K, would it then make sense to cough out another 600K and go for the freehold condo immediately? But certainly getting the condo now, would mean it would take longer for us to own 2 properties which are fully paid up.
Suggest you an option... Find some way to reduce your combined income temporarily to below 10K. Must be quick though, I suspect loophole might be plugged sooner or later.
Suggest you an option... Find some way to reduce your combined income temporarily to below 10K. Must be quick though, I suspect loophole might be plugged sooner or later.
if u are found out u are in for a rather nasty surprise. this one must really think through with caution
1st home - always go for what you can afford but having seen your comments, it seems that you want a condo and is `reluctant' to pay 600k for a HDB. The spread is 600k for a HDB and condo while in the past it was 300k HBD and 600k condo.... half the spread. Do the sums yourselves.
Danguard, good evening.
I am not sure if I read correctly from the HDB website but I think if your salary exceeds 10K, you are not allowed to apply for any housing grant? If we really can, that would be very good news.
Yes to be honest I am really reluctant to pay 600K for a resale HDB, but the size is good in the event we want to move in, and its near to MRT, near to our workplace. We were thinking, if we already cough out 600K, would it then make sense to cough out another 600K and go for the freehold condo immediately? But certainly getting the condo now, would mean it would take longer for us to own 2 properties which are fully paid up.
do you think this singapore brick is worth 600k for you put in?
the world is so big..don't tell me die die must buy house in SG to stay?
Where will you stay?
Or is the above under the assumption you will be overseas.
In which case, why can't you rent the HDB fully?
Actually I am still currently based overseas, but I am considering moving back to singapore for a couple of years to spend more time with family, and also use the time to look for our home and manage it. Else, it would be hard if I am posted to another country, and trying to do a property search in Singapore at the same time.
If I get posted back to Singapore, then we would be staying at either of our parents' home for the next couple of years.
Ideally, our first 2 homes will not be our dream homes, yet we want the flexibility such that if we want to stay in it, we can, which is also why we do not want too small a place, whichever we are buying.
Where will you stay?
Or is the above under the assumption you will be overseas.
In which case, why can't you rent the HDB fully?
I am not sure if I understood the HDB regulations correctly, but it appears if you just bought a resale, in the next 5 years you are not allowed to sublet the whole HDB unit.
CondoSeeker2012
04-03-13, 20:50
I am not sure if I understood the HDB regulations correctly, but it appears if you just bought a resale, in the next 5 years you are not allowed to sublet the whole HDB unit.
if you are overseas, you can rent out the entire flat iirc but you would then not be fulfilling your 5 years MOP which would then allow you to buy another private property
PropertyNewbie
04-03-13, 21:11
1. Buy resale HDB using cash only. Don't use CPF for this purchase.
2. Pay the min cash required for purchase. Loan as much/long as you can.
3. Let CPF stay there and earn 2.5%. Keep balance cash for investments/renovations/rainy day.
4. If within 5 year MOP period market tanks, use CPF/balance cash to buy private condo using parents' names
1. Buy resale HDB using cash only. Don't use CPF for this purchase.
2. Pay the min cash required for purchase. Loan as much/long as you can.
3. Let CPF stay there and earn 2.5%. Keep balance cash for investments/renovations/rainy day.
4. If within 5 year MOP period market tanks, use CPF/balance cash to buy private condo using parents' names
Hi, can I say that your first 2 points, are considering that the loan interest rate is till low and if interest rate rise above 2.5 % CPF rate, we should top up the rest of the loan and also use up the CPF?
Not sure if I really got your point about not using CPF for our resale HDB.
1st home - always go for what you can afford but having seen your comments, it seems that you want a condo and is `reluctant' to pay 600k for a HDB. The spread is 600k for a HDB and condo while in the past it was 300k HBD and 600k condo.... half the spread. Do the sums yourselves.
Hi, I guess thats where the dilemna lies. I am really reluctant to pay 600K for a HDB you are right. Yet at the same time, I probably would feel more comfortable have 1 home fully paid up (be it HDB or condo) asap.
Part of that mindset stems from my growing up years where my parents struggled to pay up our flat, and it wasn't pleasant during those years and it still kinda haunts me.
Buy 2 hdb under single scheme when both reach 35? Or see who is reaching 35 first, get a hdb n another one get condo? Sorry, other then having children I don't see any reason to settle down. No offence here just my own thinking. Or married overseas, if die die need to :D
I too agree that you and your partner should some way or make arrangement with your employer to reduce your combined income temporarily. When we applied our HDB flat many years ago, our combined income also exceeded the income ceiling. But my spouse took no pay leave for a few months to study. As a result, we managed to apply a new 5-room flat directly from HDB. :D
It is a no brainer that you and your spouse should apply for a BTO flat. This is an entitlement for Singaporeans only and you should not give up easily on this option.
Suggest you an option... Find some way to reduce your combined income temporarily to below 10K. Must be quick though, I suspect loophole might be plugged sooner or later.
I too agree that you and your partner should some way or make arrangement with your employer to reduce your combined income temporarily. When we applied our HDB flat many years ago, our combined income also exceeded the income ceiling. But my spouse took no pay leave for a few months to study. As a result, we managed to apply a new 5-room flat directly from HDB. :D
It is a no brainer that you and your spouse should apply for a BTO flat. This is an entitlement for Singaporeans only and you should not give up easily on this option.
people like you block up the queue for genuine buyers who needs subsidised flats :(
people like you block up the queue for genuine buyers who needs subsidised flats :(
HDB is for all Singaporeans. If they are willing to forego condo facilities and satisfy MOP, why should they be prevented just because combined income above 12K?
When they have children, one might wish to have the option to quit job. Won't that automatically bring income below 10 K? Let's think further for them ok?
Go for the condo lah, leave the hdb to the lower middle income people.
so you are going to buy a $1.6m condo? Since is your first property, will save you absd 7% more than $100k. V worth.
HDB is for all Singaporeans. If they are willing to forego condo facilities and satisfy MOP, why should they be prevented just because combined income above 12K?
When they have children, one might wish to have the option to quit job. Won't that automatically bring income below 10 K? Let's think further for them ok?
There is a very very high chance they wont be having children.
Yeah, hdb of course for singaporean. But when demand exceeds supply, not all Singaporean should be treated equally right. Those who can afford alternative, should juat make way for those less well off.
There is a very very high chance they wont be having children.
Yeah, hdb of course for singaporean. But when demand exceeds supply, not all Singaporean should be treated equally right. Those who can afford alternative, should juat make way for those less well off.
What makes us so sure that a couple in the early 30s are unlikely to have children?
With HDB, they will have choices in life. Prudence is better in the long run. Who can guarantee employment and health over 30 years?
Ultimately it depends on what they look forward to in life.
Best of luck.
Why are we not "genuine buyers"? What is your definition of "genuine buyers"? I see many so called "genuine buyers" abuse the system as well. We are not speculators and just need a low cost housing to raise a family.
people like you block up the queue for genuine buyers who needs subsidised flats :(
propertyhans
05-03-13, 09:29
Buy one condo each.
Still can find condos at north below $1mil for 3 bedder. Use it for own stay. Then the other person buy another mm for rental returns.
Income of $6k a month should be able to support.
5 years down the road, buy another hdb once govt removes the rule that says pte ppty owners cannot own hdb.
After that sell 2 condos and upgrade to landed, using hdb rental to supplement your landed instalment.
After that....haha one step at a time.
The last thing you want is to pay off your mortgage ASAP.
If I were u I would buy 2 x MM. Aiya, u missed out on Caspian...
When and if your family grows you can sell one and get a bigger older place and reno to your heart's content.
Hi, I guess thats where the dilemna lies. I am really reluctant to pay 600K for a HDB you are right. Yet at the same time, I probably would feel more comfortable have 1 home fully paid up (be it HDB or condo) asap.
Part of that mindset stems from my growing up years where my parents struggled to pay up our flat, and it wasn't pleasant during those years and it still kinda haunts me.
May I ask that FH condo at Aljunied, wat's the name? Curious to know as it sounds not-too-bad a deal @ abt $1.2m lei ...
Buy one condo each.
Still can find condos at north below $1mil for 3 bedder. Use it for own stay. Then the other person buy another mm for rental returns.
Income of $6k a month should be able to support.
5 years down the road, buy another hdb once govt removes the rule that says pte ppty owners cannot own hdb.
After that sell 2 condos and upgrade to landed, using hdb rental to supplement your landed instalment.
After that....haha one step at a time.
Hi there, thank you for your suggestion.
Part of the issue we have (something that was probably engrained in us since we were young), is that we would like to be out of debt (or have the cash to put us out of debt) as early and fast as possible. Somehow, there's just this feeling of relief and being able to sleep better knowing that you are not in debt. In the event one of us lose our jobs (we never know if it will happen), it could be a struggle meeting the monthly payments.
That train of thought really is what is leaning us to get a 600K resale HDB, have the cash reserves to pay it off fully, getting some rental in the meantime and wait for another opportunity at a condo.
Saying that....if we can find a 1million freehold condo (smaller sized, around 95 sq m) not so far from Hillview area, that probably puts us in an even more difficult position to decide.
I have a question regarding combined income for HDB if you guys don't mind.
How does HDB term combined income? Do they base it on what you declare on paper, or you have to submit proof of your payslips, or they base it on the CPF account information?
Reason being I am based overseas (might return to Singapore soon if I wish to), and my pay is in an offshore account, and I contribute income taxes overseas (a high %). My employer do not contribute to my CPF here and my CPF essentially shows no contribution from me or employer. Sounds like a stupid question but in terms of HDB, do I really need to tell them how much I earn?
Hi there, thank you for your suggestion.
Part of the issue we have (something that was probably engrained in us since we were young), is that we would like to be out of debt (or have the cash to put us out of debt) as early and fast as possible. Somehow, there's just this feeling of relief and being able to sleep better knowing that you are not in debt. In the event one of us lose our jobs (we never know if it will happen), it could be a struggle meeting the monthly payments.
That train of thought really is what is leaning us to get a 600K resale HDB, have the cash reserves to pay it off fully, getting some rental in the meantime and wait for another opportunity at a condo.
Saying that....if we can find a 1million freehold condo (smaller sized, around 95 sq m) not so far from Hillview area, that probably puts us in an even more difficult position to decide.
there is good debt and bad debt. cars are bad debts. houses are good debt. you shld not worry abt servicing loan when your LTV reaches conservatively 30-40%. by then, even if you rent out at junk price, you can still pay your instalment. my principle is that there is no such things as cannot rent out. if mkt renting at 3k, you offer for 2k, i dun believe got no tenant.
no debt is overly conservative and not growing your pie fast enuff.
It's really amazing to see how Singaporeans have this mindset that it is owed to each and every citizen their right to purchase a public subsidized housing. I am not going to debate further on things like job security and who's gonna ensure your >$10k pay would be a stable one. Humans are made selfish, if we could find ways to abuse the system, who wouldn't? But think about it, the income caps are set there for a reason.
It's really amazing to see how Singaporeans have this mindset that it is owed to each and every citizen their right to purchase a public subsidized housing. I am not going to debate further on things like job security and who's gonna ensure your >$10k pay would be a stable one. Humans are made selfish, if we could find ways to abuse the system, who wouldn't? But think about it, the income caps are set there for a reason.
rules are set so that we can find loopholes to abuse mah!
rules are set so that we can find loopholes to abuse mah!
yep :) thats the rule of the game :D
u can do anything you want, just dont get caught!:scared-3:
propertyhans
06-03-13, 09:06
Hi there, thank you for your suggestion.
Part of the issue we have (something that was probably engrained in us since we were young), is that we would like to be out of debt (or have the cash to put us out of debt) as early and fast as possible. Somehow, there's just this feeling of relief and being able to sleep better knowing that you are not in debt. In the event one of us lose our jobs (we never know if it will happen), it could be a struggle meeting the monthly payments.
That train of thought really is what is leaning us to get a 600K resale HDB, have the cash reserves to pay it off fully, getting some rental in the meantime and wait for another opportunity at a condo.
Saying that....if we can find a 1million freehold condo (smaller sized, around 95 sq m) not so far from Hillview area, that probably puts us in an even more difficult position to decide.
Use other people's money to earn more money. If u stick to your personal resources all the time, very difficult to fly. But if a home is all you seek, just get a hdb. No need to think so much.
Powered by vBulletin® Version 4.2.2 Copyright © 2024 vBulletin Solutions, Inc. All rights reserved.