holland hdb flat

I am often approached by young couples asking me what property types should they buy for their first property.

There isn’t a definitive answer.

But these would be my personal priorities:

  • BTO flat
  • EC
  • Private condo
  • Resale flat



If you can, let your first property be a HDB BTO flat to exercise your privilege as a citizen. Since the flat is subsidized by the government, why not?

The main problem is, the new HDB supplies cannot meet the demands. As a result, many people miss out with each exercise. So, the question is, can you afford to wait? It is oftentimes very frustrating for the newly-wed or those planning to get to married who need a new home urgently. 

Besides, BTO flats are good provided you don’t mind the limited location choices of the new flat. It may mean staying very far from your parents or travel a long way to work.

But there’s a catch. If your combined monthly income is $14,000 (recently increased from $12,000) and above, then you won’t be qualified. These days, it’s not difficult to hit the income ceiling. So, buy a BTO flat while you can.

Another catch is, you can only buy as a family nucleus, except for single scheme which is limited to 2-room flexi flats in non-matured estates. For married couples, both names will be locked in for 5 years which means you can’t invest in a private property during this period. So, do this while you are young.

If you do buy a BTO flat, my advice is to sell it upon meeting the 5-year MOP (Minimum Occupation Period) because that’s when the flat is worth the most. Then take that as a stepping stone to upgrade to a private condo.

If you were to keep your flat for too long, not only the chances of depreciation are high but also you will be left with lesser cash sales proceeds, having to return your CPF used plus accrued interests. With lesser cash at hand, you may not have enough to put in the down payment for your private condo.

impact cpf accrued interest


Illustration on the impact of years of ownership on CPF accrued interests

cpf accrued interest


An example of a very high accrued interest due to many years of ownership


EC is a hybrid of high-end public housing and private property. It follows quite similar to HDB policies: 5-year MOP, family nucleus and a higher income ceiling of $16,000 (recently increased from $14,000).

The prices of new EC is on the upward trend. The latest EC, Piermont Grand, has already breached the $1,000psf barrier.

Buying a EC, the maximum loan is limited by Maximum Servicing Ratio (MSR) of 30%, similar to a HDB loan. In contrast, when buying a private condo, the maximum loan is limited by Total Debt Servicing Ratio (TDSR) which is 60%. This means, based on the same salary, you can borrow twice as much when buying a private condo compared to a EC or HDB flat.

For example, if your family income is $10,000 a month, your maximum loan under MSR is $668k. This means you can buy a EC slightly less than $900k, assuming you are taking the maximum 75% loan with 25% down payment (minimum 5% cash). The smallest 3-room 840sf EC at Piermont Grand is slightly over $900,000.

If your family income is the maximum $16,000, your maximum loan is $1.069m, which means you can buy a 1302sf 4-bedroom ($1.38m up) (based on 75% loan) at Piermont Grand without forking out plenty of cash.

Those who buy a 5-bedroom at Piermont Grand that is worth more than $1.5m will need to be cash rich. How many young couples can do that without plenty of help from parents?

Though the prices of new EC have gone up, the chances of capital gain are high. Even at $1,000psf, it is still much lower than the average prices of condos in the same area. After 5 years of MOP, an EC will have similar status as a condo. It can be sold to Singaporeans after 5 years and foreigners after 10 years. That’s why the response to Piermont Grand is so positive.

But do remember, for married couples, both names will be locked in for 5 years, during which you can’t invest in another property.



Buying a private condo is a lot more affordable than what most people think.

Even if your income is only $5,000 a month, you can borrow up to $668,000 on a 30-year tenure. If you have sufficient cash and CPF for the 25% down payment, you can buy a condo that costs almost $890,000. With this budget, you can buy a 2-bedroom unit at Treasure At Tampines.

There are several advantages of buying a private condo as compared to a HDB or EC.

Firstly, there is no MOP criteria to fulfill. Which means you can rent out anytime, buy another property or sell after 3 years without incurring seller stamp duty (SSD).

Secondly, there is no need to buy as a family nucleus. For HDB and EC owners, because both spouses’ names are locked in, you can’t possibly buy a 2nd property without incurring Additional Buyer’s Stamp Duty (ABSD). Decoupling is not allowed. For dual-income married couples, if you are financially able, you can buy 1 under your name and another under your spouse’s name without paying ABSD.

Thirdly, based on the current market trend, the chances of realizing a capital gain for a private condo is much higher than a resale HDB flat. But be sure you know what to buy. Not all condos are equal.

hdb private price index


The current trend shows the continual depreciation of HDB flats whereas private condos have appreciated

Fourthly, if you’re looking to borrow a large sum of money and have a private property on hand, you can take an equity/term loan with the bank. This is not possible for HDB. For EC, you have to wait till your MOP of 5 years run out. Typically, the bank will allow you to borrow up to 75% of your property
value. But first you would need to minus any outstanding loan amounts, as well as any CPF used for the property purchase. The interest rate is the same as mortgage loan.



Buying a resale flat should be the last option for a young couple.

But sometimes due to circumstances it may be the only viable option. Cheap old flats may be the only thing you can afford. Maybe you want to be near your parents. Or to be near the primary school of choice for your children. Or you can’t afford to wait for the BTO flats.

For some, they are not eligible to buy BTO or new EC due to income ceiling and they think resale flats is the only type of housing they can afford.

Some are attracted to the first-timer $50,000 grant and $20,000 proximity grant.

There are so many things to be concerned about when buying a resale flat

  • Age of the flat
  • Difficulty in selling in future
  • Depreciation
  • High price of flats in matured estates
  • High cost of renovations which eats into your cash reserves.  



It is important to plan. And to plan early.

Before you make the important decision of buying your first property, it is important for you to know all your options and their implications.

I am a Property Wealth Planner and I am here to help you:

  • to find out strategies that property owners use to BUILD WEALTH quicker safely,
  • to understand your current position and options through a customised FINANCIAL FEASIBILITY study,
  • to plan a customised investment roadmap that can help you achieve FINANCIAL FREEDOM and PASSIVE INCOME streams with low risk.

If you are keen to know more, feel free to contact me for a no-obligation discussion.

Danny Han

Danny Han

Associate Deputy Group Director
OrangeTee & Tie Pte Ltd

Danny has been a licensed real estate agent since 2005 and has helped many in Property Wealth Planning.

Do drop him a Whatsapp message or send him an email for a discussion if you are planning to grow your property wealth.

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