Holland Property

SKYE AT HOLLAND

hollandproperty — Sat, 06 Sep 2025 13:22:54 +0000

SKYE AT HOLLAND

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Skye at Holland is a project to be developed by a consortium of four reputable local property developers: UOL Group, CapitaLand Development, Singapore Land Group and Kheng Leong Co.

Their winning bid $805.39 million for the 133,330 sq ft GLS residential site works out to $1,285 psf ppr, which is the lowest for a CCR GLS residential plot since the Kampong Java Road site was sold for $1,192 psf ppr in January 2019.

Skye at Holland is located in the heart of Holland Village, at the junction of Holland Road and North Buona Vista Road, and right next to One Holland Village Residences.

It is a mere 3-minutes walk to the Holland Village MRT Station.

Set within a historically rich residential enclave surrounded by low-rise homes and institutional landmarks, the development is conceived in response to this sensitive urban context.

Many units get to enjoy an unblocked view of the Holland GCB neighbourhood.

Likes and Dislikes

Reputable developers.
Enjoy a vibrant lifestyle hub of Holland Village.
About 5 minutes walk to Holland Village MRT
Seamless accessibility to a wide range of retail and lifestyle amenities. Within 5 to 15 minutes’ drive to shopping, dining and entertainment options include Jelita Shopping Centre, The Star Vista, Rochester Mall, Dempsey Hill and Orchard Road Shopping Belt.
Short walk/drive to international schools, such as ACS International School, Tanglin Trust, United World College, and Dover Prep School
Circle Line provides seamless connection to R&D/Education Hub, such as NUS, NUH, Science Centre (One North & Kent Ridge Stations), and to Greater Southern Waterfront (Haw Par Villa, Pasir Panjang, Labrador Park, Telok Blangah and Harbourfront Stations). The Circle Line MRT is scheduled to be completed and form a complete loop in 2026 with the opening of the final Circle Line Stage 6 (CCL6). CCL6 includes three new stations that connect HarbourFront to Marina Bay, completing the 43-kilometer network. By then the Circle Line will connect all the dots, making travelling round Singapore seamlessly.
Good catchment of high profile and high income tenants.
Near Rail Corridor.
Within 1-2km to reputable primary schools, such as Nanyang Primary and Henry Park Primary Schools.
Efficient layouts. GFA Harmonisation means getting what you pay for.
Unit sizes from 2-bedrooms to 5-bedrooms cater to different needs. The 4-bedroom and 5-bedroom units fill a gap for shortage of big units.
Provision of 1-1 parking lot for all 666 units. 18 EV charging points and 168 bicycle lots are provided.
50 condo facilities, including a GCB-like Clubhouse, 3 function rooms, and 2 private gyms.
Many units get to enjoy unblocked landed view and Holland Village view.

Not within 1km to reputable primary schools.
Some units facing future HDB blocks.

Feel free to Whatsapp me for future updates of Skye at Holland.

Danny Han is a licensed property agent since 2005.

As a kampong (village) boy growing up in Holland Village, he has so many fond memories. He grew up with pigsty (yuk!), cemetery, swamp and communal-living (with 10 families under one roof). His childhood games were gasing (spinning top), marbles, kites, spider-fighting and tree-climbing. An open-air cinema was his source of entertainment. 7^th-month Hungry Ghost wayang (Chinese opera) and getai (concert) was a once-a-year event that brought the entire village together.

What Danny is passionate about is not just about showing clients properties around Holland Village, but also enjoys sharing anecdotes and nuggets of information that are part of his growing up years.

Danny is an avid hiker and passionate foodie. He has covered most of the nature trails in Singapore, including some that are off the beaten track. Living up to his motto, “walk to eat,” he enjoys going out with his wife, a retired academician, on a food hunt across the island. He also has some foodie kakis who mix work with food. They then share their gastronomic experiences through food blogs. So do watch out, because every time he shows you a property, he will tell you what is the best food nearby!

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New Launch vs Resale Condos In 2024: Which To Buy?

hollandproperty — Fri, 16 Feb 2024 15:36:25 +0000

New Launch vs Resale Condos In 2024: Which To Buy?

The property market has seen some notable changes over the year; but one of the more obvious differences is the price gap between new launch and resale condos. With new launches now at around $2,000 psf, an increasing number of buyers – including HDB upgraders – are starting to feel priced out. But how wide is the gap between new and resale right now, and what are some of the other factors to consider when choosing?

New Launch Condo Prices In 2024

New Launch Condos in CCR

We’ll begin with new launch condos in the CCR:

New launch prices averaged $3,007 psf in January last year, rising to $3,168 psf as of January this year. Notice, however, there’s a sharp drop in the number of new launch transactions; largely due to the number of available launches, but also possibly due to new cooling measures (see below).

New Launch Condos in RCR

Next let’s look at the RCR:

Prices averaged $2,601 psf in January of last year, dipping slightly to $2,568 psf in January this year. The transaction spikes in the middle of last year were mainly due to three major launches all happening in District 15 (Grand Dunman, Tembusu Grand, and The Continuum).

New Launch Condos in OCR

Next, let’s look at the OCR.

The OCR saw a strong pick-up in price over last year, rising from an average of $1,775 psf, to $2,019 psf. This is not entirely unexpected, since the OCR is where the bulk of homeowner transactions (mostly HDB upgraders) see the most demand.

Do You Notice A Common Factor In All Three Regions?

At this point, the average price of a new launch is now over $2,000 psf in all three regions. It’s now an inescapable fact that for family-sized units (typically three-bedders of at least 900 sq. ft.), the typical quantum for a new launch condo is around $1.8 million.

If we consider a 25-year home loan at the maximum loan quantum (75% of the price), monthly loan repayments (at 4% per annum) come to $7,126 per month. This means that, to meet the TDSR, which restricts monthly loan repayments to 55% of your combined income, the borrowers may need to earn close to $14,000 per month (unless they can make a bigger down payment).

Also keep in mind that 900 sq. ft. is smaller than the average 4-room flat, so those with bigger families may face a quantum of $2 million or more. This is all, quite frankly, well past comfortable territory for many median-income Singaporeans.

Resale Condo Prices in 2024

Resale Condo Prices In CCR

We’ll start with the resale prices in the CCR:

Prices in the CCR have been mostly flat over the year – they were at $2,309 psf in January 2023, and are at $2,312 psf now. I actually expect more of this muted performance in the near term, for reasons I’ll cover below.

Resale Condo Prices in RCR

Resale prices in the RCR are trending upward, from $1,747 psf in January last year, to $1,868 psf this year. As a matter of opinion, this could trend further upward if we see issues in the wider economy (e.g., further impact from the war in Europe and in Gaza). This is because, when companies cut costs and shrink expatriate housing allowances, we sometimes see an exodus from the CCR into the more affordable RCR properties; this might prompt investors to buy within the city fringe instead.

That said, it will boil down to whether investors are still interested in rental assets in more prime areas, given the higher ABSD rates today.

Resale Condo Prices in OCR

Now let’s look in the most segment: resale condos in the OCR are the bread-and-butter of the homeowner market in Singapore; especially given that new launches are increasingly out of reach:

It’s relatively happy news for home buyers.

Prices have risen from $1,340 psf in January last year, to $1,410 psf this year; but an increase of just over 5% is at least tolerable to most. The really good news for buyers is that, as of November 2023, we can see the average price has been sliding.

With the exception of the CCR, average resale prices in the RCR and OCR have stayed below the $2,000 psf mark; and it’s still quite possible to find resale units in the $1.4 million to $1.6 million range. This is generally comfortable for HDB upgraders, if not first time buyers, so I would expect the bulk of transactions to be in these resale segments going forward.

What’s Happening In The CCR?

One of the key factors in the CCR is the impact of last year’s cooling measures.

As of April 2023, the ABSD on foreigners was doubled to 60%. This is not a huge issue for the OCR, as few foreigners buy there anyway – but the CCR will likely bear the brunt of this going forward, as this region has the biggest number of foreign buyers.

If there are buyers in the CCR this coming year, I expect it will mainly come to buyers seizing upon the narrowing price gap between the RCR and CCR.

Within the RCR, there is (speculative) hope that the cooling measures will push buyers from the CCR into the relatively cheaper city fringe. In any case, I also expect that the launches of Grand Dunman, Tembusu Grand, and The Continuum so close together will have a knock-on effect on surrounding resale homes; this could lead to District 15 bumping up the regional average.

Harmonisation of Gross Floor Area

Another factor to consider are the changes to the definition of Gross Floor Area (GFA), which would apply to the new launches we’re seeing now.

As of June 2023, the government is standardising the definitions of Gross Floor Area (GFA) across regulatory bodies. This also has an impact on new launches though.

Several of the methods used to maximise prices in the past, such as building extra large air-con ledges, or charging for “empty air” between the floor and ceiling (strata void space) are no longer allowed. Previously, developers were able to charge buyers for the square footage of these features, even though they themselves were not charged for it.

The impact on price is not yet known to us – it could go in two different ways. On the one hand, it may result in more space for the amount you pay. On the other hand, developers may simply raise prices, to make up for the inability to use these methods. As such, I would say it may not affect the prices; but there’s a clear win in that you’re buying actual square footage you can use.

This would be a significant advantage for new launch buyers, compared to less space-efficient resale units. No one really wants to pay several thousand dollars for planter boxes they don’t use, even if the overall price may be lower.

Conclusions On New Launch vs Resale Condos in 2024

For those upgrading from 3-room or 4-room flats, or on a budget, new launches may be an uncomfortable stretch at this point. Executive Condominiums (ECs), or a resale unit in the OCR, are probably more sensible (and you can upgrade further from those in future, if you like)
For buyers with a bigger budget, it may be worth keeping an eye on new launches in the CCR, if developers get nervous about the ABSD and are more modest with prices. Alternatively, you might look to the RCR, and try to take advantage of narrowing prices with the CCR.
For singles and couples (no children) who are buying smaller, low quantum units, it may be worth looking at new launches. This is because the lower overall quantum might still make the units affordable, and the more efficient layouts of newer condos are even more important, when you’re buying a compact unit.

For more personalised assistance or further questions, do reach out to me directly and I’ll be glad to help.

Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.

Danny has a genuine interest in people and firmly believes in personal integrity. While helping homeowners with their property needs, their interest always takes precedence over his personal gains. Hence, Danny has consistently earned his clients’ complete trust and loyalty. Many of them have become his personal friends.

Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.

Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker.

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The post New Launch vs Resale Condos In 2024: Which To Buy? appeared first on Holland Property.

Is It Still Worth Buying A Freehold Property For Retirement?

hollandproperty — Fri, 05 Jan 2024 15:10:44 +0000

Is It Still Worth Buying A Freehold Property For Retirement?

A few years ago, I wrote an article, “FREEHOLD VS LEASEHOLD: Is It Always Worth Paying More For A Freehold Condo?”. Here, I am asking a related question, does it make a difference whether we are buying a freehold or leasehold condo for retirement?

Many Singaporeans would immediately answer yes, and some may even insist on only buying freehold properties if it’s for the long term. However, the property market has constantly shown that we cannot make assumptions, and in fact, one of the least provable statements is that “freehold condos perform better.”

As a matter of fact, historically, we have seen both leasehold and freehold condos enjoy capital appreciation.

Let’s take a more nuanced look before you decide to invest in one for retirement:

Why is it so hard to give a definite answer on whether freehold is better?

A common question is why we don’t just look at all the freehold prices, then look at all the leasehold prices, and see which one performed better overall. Well, this will never be accurate.

First, there are far more leasehold than freehold condos, which will distort the results (generally to the benefit of leasehold condos, as there’s so many more transactions.) In addition, all the freehold condos tend to cluster around prime neighbourhoods like Orchard, Tanglin, etc. On the other hand, leasehold condos tend to be found in newer or fringe neighbourhoods. This, again gives leasehold condos an unfair advantage, as they almost always have more room to appreciate.

On the other hand, you will find more leasehold condos that are conveniently located near MRT stations and amenities. So, if you want the added convenience, you will have more choices for leasehold condos than freehold condos. This added convenience does have a positive impact on capital appreciation.

Also, if you buy a condo in a very new area like Tengah, prices will be rock bottom, and there’s a lot of room for appreciation as the government will build schools, MRT stations, markets, etc. But if you buy in an already heavily-developed area, such as Anson Road or Orchard Road, how much more can the price increase? It’s already among the most expensive properties in Singapore. So this is why leasehold properties, as a whole, can show much more significant percentage gains than their freehold counterparts.

Even if prime region condos show good appreciation, we’re forced to ask if the appreciation is really due to their freehold status or just because they’re such a desirable place to live. Property prices move for many reasons; not all are related to lease status.

Case Study: Leedon 2 vs The Merasaga

These two condos are located in the prime Holland Road neighbourhood.

Leedon 2 is a 72-unit freehold condo built in 1996.

The Merasaga is a 114-unit 99-year leasehold condo built in 1995.

Even though The Merasaga is slightly older than Leedon 2, it has appreciated by 220% over the last ten years. In comparison, Leedon 2 has gained by 171%.

Why is that so? There are a few possible reasons:

The Merasaga has a better layout
The Merasaga has better landscape and facilities
The Mersaga is quieter
The Merasaga enjoys a better view
The Merasaga commands better rents

So, as we can see, the lease status of the condos alone does not determine its value.

So how can we determine if a freehold property is really good for retirement?

We can start by understanding some general factors and eventually moving on to scrutinise the actual property.

The first factor is the likely lifespan of the property. An interesting point to note is that, regardless of whether a property is freehold or leasehold, it tends to last the same amount of time. This article has some research on how long most properties last before they go en-bloc; regardless of lease status, the general answer is between 19 and 24 years. It is rare for any condo to last more than 33 years.

This is significant to your retirement for two reasons:

First, you may want to buy a freehold unit because it’s “there forever,” and you have something to will to the children, or perhaps you feel you can charge rent for the rest of your life, and so can your family.

But the average lifespan of a condo shows this is improbable: even if you pay 15 to 20% more for a freehold condo, you may find that the condo goes en-bloc in 24 years; exactly the same as a leasehold counterpart nearby. And if that’s going to be the case, do you still want to pay the freehold premium?

you may want to buy a freehold unit because it’s “there forever,” and you have something to will to the children, or perhaps you feel you can charge rent for the rest of your life, and so can your family. But the average lifespan of a condo shows this is improbable: even if you pay 15 to 20% more for a freehold condo, you may find that the condo goes en-bloc in 24 years; exactly the same as a leasehold counterpart nearby. And if that’s going to be the case, do you still want to pay the freehold premium?

Second, we need to consider that freehold status becomes more valuable with age. For example, when a leasehold property has only 60 years left, the value suffers as borrowers may not be able to get a full loan; this means they need more cash upfront. Buyers may even need to pay full cash for properties with 30 years or less on the lease.

In theory, freehold properties avoid this issue, as there is never any lease decay. This is part of the justification for the freehold premium. But again, consider how long the typical condo lasts: it would have to survive 39 years (dropping the lease to 60 years) before there’s an effect on the financing. As I have mentioned above, this is quite a rare age for condos.

If your condo goes en-bloc, or you sell it early on, you may find the lease decay has no effect, and that would mean paying for freehold status was a waste of money. You may as well have bought a cheaper leasehold unit and held it for the same amount of time.

If your condo goes en-bloc, or you sell it early on, you may find the lease decay has no effect, and that would mean paying for freehold status was a waste of money. You may as well have bought a cheaper leasehold unit and held it for the same amount of time.

But let’s put the property lifespan aside, and look at rental income

It may surprise you to learn that some very savvy property investors when picking a unit to rent out, will refuse to consider freehold. The reason is the higher price of freehold and the impact on rental yield.

Consider two condo units of the same age, quality, and location. The only difference is that one is a freehold, and the other is a leasehold.

The leasehold unit is $1.8 million and rents for around $54,000 per year.

The freehold unit is $2.1 million and rents for around $54,000 per year.

(Why are they the same? It’s because a tenant will never pay more for freehold status. Lease status has no benefit to them. All they care about is whether it’s a pleasant place to live, close to work, has an MRT nearby, etc.)

Gross rental yield is the annual income divided by the property price. So for the leasehold unit, the gross yield is 3% ($54,000 / $1.8 million x 100). But for the freehold unit, the gross yield is 2.57%.

Simply put, you’re probably making more money from renting the leasehold unit than the freehold one. So do consider if the extra $300,000 in price is better off in your retirement fund or some other investment.

But I am not buying to rent out, you may say. Granted, your purpose is for your own stay so you are not so much concerned about rental yield. But do consider two things:

There is a correlation between property value and rental yield. If it comes to a point in time that you do decide or need to sell your property, the one with a higher rental yield is likely to fetch a higher price than one with a lower yield.
As the property ages, the maintenance costs will go up. Owners will have to face the constant hassles of repairing leaking pipes, water seepage, spalling concretes, etc. More sinking funds will be needed for lift maintenance, facilities upgrades and structural repairs. Oftentimes, these repair costs can be very significant. After a while, frustrated owners might start to wonder if it is really worth hanging on to their ageing freehold condos.

Finally, we should consider that long-term changes to the area could trump your freehold value

There are certain factors that being freehold cannot overcome. Some examples of this are:

Several new condos are built nearby, increasing competition for tenants or buyers, and some of the new condos even block the view of your property.
Condo maintenance worsens toward later years; even if your condo is the only freehold one in the area, it still looks worse than its leasehold counterparts.
Cooling measures or market conditions change at the time you sell. If you sell during a downturn or (touch wood!) at a loss, at least a leasehold option would mean losing less money.

Ultimately, a leasehold property commits less capital and has a lower risk profile.

A private property is a great retirement asset, but it may not be necessary to make it a freehold

It is true that some of the most prime regions, such as Tanglin, Cluny, Orchard, etc. have properties that are good retirement assets. However, it’s unlikely that the savvier investors are buying there just because the properties are freehold. They are buying there for long-term value due to the location.

From a personal finance perspective, it’s also worth considering that a cheaper (leasehold) property can be paid off sooner or with less interest over the years. It’s seldom worth pushing your loan tenure too close to retirement, just for the sake of having a freehold condo.

Simply put, find a well-located and well-priced condo for your retirement asset; whether or not its freehold is a secondary concern

The key parameters are:

Affordability – Your monthly repayments should not be more than 30% of your monthly household income.
Rental income and retirement targets – If your targeted retirement income is $4,000 a month, and the property can produce $4,000 a month, then does it really matter whether it’s leasehold or freehold?
Targeted appreciation rates – Based on your retirement planning, you might target a certain rate of return (e.g., effective gains of 3% per annum when you sell). This must be the first priority. If you find that a freehold property that can do it, then go for that property. But if you find a leasehold property that can do it, don’t hesitate to go for that instead. Don’t be too hung up over lease status.

If you’re currently pondering a freehold (or leasehold!) condo for retirement, I can help you make specific comparisons. Do reach out to me for direct help, and I can advise you on whether the property meets your retirement objectives.

Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.

Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.

Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker.

Subscribe to receive updated practical property investment insights, property reports and good investment deals

The post Is It Still Worth Buying A Freehold Property For Retirement? appeared first on Holland Property.

Is It Still Worth Upgrading To A Condo In 2024?

hollandproperty — Mon, 18 Dec 2023 12:47:19 +0000

Is It Still Worth Upgrading To A Condo In 2024?

As 2023 comes to an end, home loan interest rates are up, and private home prices are higher than they were in previous years (although frankly, home prices rising is something that can be said of most years). This has led some HDB upgraders to reconsider their motives: in light of higher costs, is it still worth making the jump to a private, non-landed property?

There’s no single answer that’s right for everyone; but here are some of the main considerations, in making your decision:

Can I Afford To Upgrade from an HDB To A Condo In 2024?

Before we decide if it’s worth doing, we need to consider if it’s even practical, or the numbers involved.

Let’s look at average new launch prices, as we head into 2024. As I write this, we are nearing the end of December 2023:

As we can see, prices of new launches have slowed over the past quarter, with new launch prices averaging $2,136 psf.

Resale condos have seen a sharper spike in end-December 2023, but this is somewhat expected; with new launch prices being so high, I would expect more upgraders to be looking for resale options. As an aside, there were a lot of new launches in 2023; and there is a knock-on effect where new launches will also pull up the prices of nearby resale condos.

Even with the uptick, resale condos average just $1,645 psf.

We’ll use a three-bedder condo as an example for HDB upgraders

A three-bedder condo is roughly around 1,000 sq. ft. We use this size because, practically speaking, most HDB upgraders are families; so one and two-bedders are considered too small. Also, most families do not like to “upgrade” into anything smaller than a 4-room flat (around 900+ sq. ft.), especially if their former flat was bigger.

So for a new launch condo, an upgrader would be looking at a quantum of about $2.1 million, while a resale condo might have a quantum of around $1.6 million.

How viable is it to upgrade? Let’s take a look:

Cost for upgrading from an HDB to a resale condo:

The average cost of a three-bedder, resale unit is about $1.6 million. We will assume the upgrader has sale proceeds of around $600,000*, after selling their flat. This means they need to bridge an amount of about $1 million.

The initial down payment, assuming a maximum loan quantum, is 25% of the property price. This means they need $80,000 in cash, plus $320,000 in cash or CPF. After paying this amount ($400,000), they’re still left with $200,000 in cash from the sale of their flat.

The remaining loan they need is $800,000. Assuming a floor rate of 4%, and a 25-year loan tenure, this comes to about $4,223 per month. Assuming a TDSR limit of 55%, this requires the borrowers to have a combined income of at least around $7,600.

Cost for upgrading from an HDB to a new launch condo:

This is much tougher, as the average quantum is now around $2.1 million. Again, we’ll assume the previous flat was sold at $600,000*.

The required down payment is (first 5%) $105,000, followed by (next 20%) $420,000 in cash and / or CPF. After paying this amount, they will have only $75,000 left.

Assuming they pay the $75,000 into the property as well, they still need a loan quantum of $1.5 million.

At a 4% interest rate, assuming a 25-year loan tenure, the monthly loan repayment is around $7,920 per month. This would require a minimum combined income of about $14,400 per month.

You can see that, barring big developer discounts, the majority of HDB upgraders in 2024 will be much more comfortable with resale condo prices; but for those who have higher-value flats to sell (e.g., DBSS flats, flats at Pinnacle @ Duxton), the sale proceeds may be sufficient to bridge the gap to even a new launch condo.

*For simplicity’s sake, we will assume they have no outstanding home loan, and a sufficient amount in cash for the down payment. There are also other costs, such as stamp duty, agent’s fee and legal fee, which are not factored in here. For a more complex breakdown, do reach out to me and I can help you work out the numbers specific to your situation.

Is upgrading from HDB to condo worth the cost?

This will depend on the following factors:

Your ability to cope with the higher interest rates going forward
The role that the condo will play in your retirement
For younger buyers, potential delays in right-sizing
Whether you see value in cash-out refinancing as an option
The condo as a “safety margin”

1. Your ability to cope with the higher interest rates going forward

Singapore home loans are based on SORA rates. It’s a combination of your bank’s spread, plus the underlying three or one-month SORA rate (these are the most common home loan packages).

The higher the SORA rate, the higher your home loan interest. You can check historical rates here. SORA rates as of end-December 2022 were at 2.9%, but they reached over 3.7% as of end-2023.

The rate hikes are expected to slow in 2024, but they’re still likely to head upward in the near-term. Rates are also nothing like what we saw in the pre-Covid period, where 2% was the norm.

That being said, note that the floor rate for the TDSR (see above) assumes a 4% interest rate, which is already higher than the average rate – so if you can pass the TDSR, odds are you can handle the higher interest.

2. The role that the condo will play in your retirement

When it comes to resale gains, private homes still have a clear edge.

Over a 10-year period, private home prices (resale only) rose between $1,259 psf to $1,645 psf. This is an increase of about 30.6%.

In the same time frame, HDB flat prices rose from $461 psf to $571 psf. This is an increase of about 23.8%:

We also need to consider that Singapore has an ageing population and that non-Singaporeans cannot buy HDB flats. By the year 2030, about ¼ of all Singaporeans will be aged 65 and older.

Consider that when the next generation passes on, there will be a lot of vacant HDB flats. Children probably cannot inherit these from their parents, as you cannot own more than one HDB flat. At the same time, non-Singaporeans cannot absorb this supply of leftover flats.

In such a high-supply-lower-demand scenario, there’s a serious risk that HDB flats will no longer see the appreciation they have in past decades.

So for those thinking long-term and into retirement, this is a factor worth considering.

3. For younger buyers, potential delays in right-sizing

If you are below the age of 55, and you sell off a private home, you’ll need to wait 15 months before you can buy a resale flat (for a BTO flat, you need to wait 30 months). This does not apply to those aged 55 and above, including their spouses, who are moving to a 4-room or smaller resale flat.

This is a serious consideration for younger upgraders. If you make the jump to private, and later find you cannot sustain the costs, you will have a problem downgrading to a flat again. Even after liquidating the condo, you may incur additional costs in the form of rental needs, while waiting to be able to secure a flat.

As such, those who are not in a financially stable situation may not find the risk to be acceptable.

In general, it’s best to upgrade only if the monthly loan amount is kept to around 30% of your monthly income (even if the TDSR allows for more).

Also, if possible, leave enough money in your CPF funds to tide you over at least a year (longer the better) in case you are out of job for a while.

4. Whether you see value in cash-out refinancing as an option

One lesser-known advantage of owning a private property is cash-out refinancing*. This allows you to take out a loan against your property, at a much lower interest rate than personal loans, credit cards, etc.

You might, for instance, be able to borrow up to 75% of your property value, minus your CPF usage. As of 2024, most banks would have an interest rate that’s broadly similar to mortgage rates.

Taking out even a 50% loan against a $1.6 million resale condo is quite sizeable: it can fund a child’s overseas education, or start a business venture, without the high interest of many private education loans, business loans, etc.

It can also be seen as a way to monetise your property, without having to sell or rent it.

*Read my article on Wealth Accumulation Through Equity Loan

5. The condo as a “safety margin”

If you have a private home, and your financial situation turns bad, you can at least right-size back to an HDB flat. In this sense, the condo acts as a safety margin of last resort.

If you have an HDB flat, your only choice is to right-size to a smaller flat; and it’s likely that the proceeds are slim, and may not get you out of your financial complications.

As such, some buyers find emotional peace-of-mind, in knowing that their home can provide for them in alternative ways. This can be a strong motivation to upgrade, more so than factors like having a nice pool or view.

In essence, those who view their property as being an investment, retirement asset, or fallback are still likely to derive value from upgrading. However, as of 2024, the combination of higher interest and prices unfortunately restricts this possibility.

It’s likely homeowners who have higher-value flats, or paid-up properties, who are in a stronger position to upgrade. For those who have just started with their first home, a longer period of disciplined savings may be necessary, before they make the leap.

In addition, given the higher quantum of new launches, a better question may be: is it worth upgrading to a new launch condo? This is likely to be an issue that upgraders will grapple with, in the coming year.

For a personalised look at whether you should upgrade, do contact me for a consultation.

Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.

Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.

Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker.

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The post Is It Still Worth Upgrading To A Condo In 2024? appeared first on Holland Property.

How Your Property Can Still Provide For Retirement In 2023 And Beyond

hollandproperty — Fri, 10 Nov 2023 20:53:00 +0000

How Your Property Can Still Provide For Retirement In 2023 And Beyond

Retirement planning is paramount to many Singaporeans. Beyond the traditional portfolio of stocks and bonds, real estate has always been a compelling and tangible asset class that can redefine your golden years. In this age of uncertainty, where economic landscapes can shift unpredictably, the stability and resilience of real estate make it a beacon of hope for those seeking a robust retirement strategy.

The past few years have seen significant changes in the Singapore property market – from a sudden upsurge in prices to a new Prime and Plus model of flats to increased stamp duties. To top it off, we’re headed into a more volatile economy, due to external factors like wars in Europe and the Middle East. This has led to questions over whether residential property remains “the way to go” as a retirement asset, and how expectations have changed.

HDB flats as a retirement asset?

HDB resale flats

In considering HDB flats as a retirement asset, let’s first look at the situation with resale flats today.

At the time I’m writing this, it’s November 2023. Here’s a snapshot of prices today, and how far they’ve moved in the aftermath of Covid:

Note: All data is from Square Foot Research

HDB flat prices saw their sharpest uptick in prices throughout the post-Covid period. Resale flat prices now average $572 psf across Singapore, up from $452 psf in 2020.

Prior to this, resale flat prices had actually declined since the last peak in 2013. To grasp how big a change this is, the past two to three years have managed to reverse almost eight years of decline since 2013. Here’s what it looks like over a decade:

Back in 2013, the government imposed the Mortgage Servicing Ratio (MSR). This capped monthly loan repayments to no more than 30% of monthly income, when buying an HDB property.

On top of that, HDB no longer allowed sellers to do a valuation report before selling their flats because they were using the valuation as a benchmark to set their prices, resulting in Cash Over Valuation (COV).

The issue of lease decay, especially for older flats, came into the spotlight in 2017 when our minister, Mr. Lawrence Wong, cautioned that not all flats will be eligible for the Selective En Bloc Redevelopment Scheme (Sers). This caused many homebuyers to shun older flats.

The result was a gradual decline in resale flat prices, making them much more affordable right up to Covid. But once Covid struck, construction of BTO flats came to a screeching halt. Even after the lockdown period, the resumption of construction was very slow. Completion of BTO flats was delayed. Naturally, many people turned to resale flats. This caused a surge in demand for resale flats, thus pushing resale flat prices very quickly over a very short time, as you can see above.

(I wrote in May 2021 what is driving the red-hot HDB resale market)

The introduction of the new Prime and Plus housing models may compound this effect, at least over the near-term.

BTO flats new classifications: implications for HDB flats as a retirement asset

In August 2023, it was announced that the old system of mature versus non-mature neighbourhoods would be scrapped. Flats will come in three categories: Prime, Plus, and Standard by 2H2024.

Prime flats are located in central areas, such as Queenstown or Tanjong Pagar. Some currently existing Prime projects include Verandah @ Kallang, Farrer Park Fields, and Alexandra Vale.

Plus flats do not yet exist at the time of writing. However, these are flats that will be closer to malls, MRT stations, or their individual neighbourhood hubs (although the neighbourhood may be a fringe area.) The first of these will be Bayshore, to be launched in 2024.

The main differences between Plus, Prime, and Standard (normal) flats include:

Plus and Prime flats will enjoy more subsidies than Standard flats but will be subject to a Subsidy Recovery (SR), which must be paid back when the flat is sold. This applies only to the first batch of buyers, and the amount varies for each project. This is to make up for the bigger subsidies involved.
There is a 10-year MOP on Plus and Prime flats, including for resale buyers.
During the 10-year MOP period, owners can’t rent out the entire flat or invest in a private property.
Other eligibility requirements, such as the income ceiling, continue to apply to Plus and Prime flats, even at the point of resale (normal resale flats have no income ceiling.) The exact list of requirements for Plus flats will be disclosed in greater detail when the information becomes available.

However, existing resale flats, which are close to Plus and Prime flats, have seen no rule revisions. These flats now have an equally good location, but also don’t suffer from restrictions like the 10-year MOP, or some eligibility factors like the income ceiling. As you might expect, this has caused many sellers close to Prime projects to ramp up their asking price. They have all of the advantages and none of the drawbacks.

However, existing resale flats, which are close to Plus and Prime flats, have seen no rule revisions. These flats now have an equally good location, but also don’t suffer from restrictions like the 10-year MOP, or some eligibility factors like the income ceiling. As you might expect, this has caused many sellers close to Prime projects to ramp up their asking price. They have all of the advantages and none of the drawbacks.

This being said, the momentum in the resale flat market is likely unsustainable

Those who sold their flats in the aftermath of Covid may well have seen windfall returns, compared to the eight years preceding the pandemic (ref: the chart above.) However, this surge in resale flat prices is unlikely to last.

HDB aggressively ramped up flat construction after Covid, with the deliberate aim of keeping resale prices low. In 2022, for instance, HDB completed 23,782 new flats, which is the highest amount since 2017. The government built so aggressively, that HDB incurred a $5.38 billion deficit to ramp up supply.

The number of BTO flats, along with interest in Plus and Prime flats, is likely to siphon some demand for resale units. In fact, given the high prices of resale flats, some first-time buyers have no choice other than to wait for BTO units. And in the long term, these new flats will end up joining the resale market, thus satisfying demand.

As such, I wouldn’t be over-optimistic regarding flats as long-term assets, despite the surge in prices over the past couple of years. Covid was an outlier event and not part of a natural market cycle.

Implications regarding resale flats as retirement assets

There are two notable implications going forward:

1. Plus and Prime flats show a repositioning toward ageing-in-place

One of the consequences of Plus and Prime flats is the phenomenon of self-sorting. By this, I mean that buyers of these flats are unlikely to want to upgrade, and hence take themselves out of the competition for standard flats.

Both Plus and Prime flats are not ideal, for those who want to make the jump to private property. The main reason is time: the MOP starts from the point of key collection, and stretches for 10 years. As such, if you factor in construction time of four to five years, buyers of Plus and Prime flats need to wait 14 to 15 years. During this time, private home prices would have appreciated even more (see below), thus making it harder to move up into condos.

The further restrictions on Plus and Prime flats – such as having an income ceiling and subsidy recovery – also limit the flats’ future gains; the wealthiest buyers would be earning too much to purchase these homes (the income ceiling on an HDB flat is $14,000.)

For these reasons, those who seek to upgrade will choose standard resale flats instead.

That the government placed so many restrictions on Plus and Prime flats also clarifies its position: these homes, which are in high-demand areas, are angled at those who want to live in them indefinitely; possibly for their entire lives. This shows a growing regard for HDB flats’ roles as pure homes, rather than investment vehicles.

Simply put, you may be rewarded with a better location, if you’re willing to stick with the same flat for the rest of your life.

Both Plus and Prime flats are not ideal, for those who want to make the jump to private property. The main reason is time: the MOP starts from the point of key collection, and stretches for 10 years. As such, if you factor in construction time of four to five years, buyers of Plus and Prime flats need to wait 14 to 15 years. During this time, private home prices would have appreciated even more (see below), thus making it harder to move up into condos.

2. Increased supply could moderate long-term appreciation

The larger number of flats, which will eventually enter the resale market, will place downward pressure on resale flat prices. Based on lessons learned during Covid (and the subsequent shortage), one possible outcome is HDB moving away from the slow BTO model.

That is, HDB may decide to build-as-appropriate, rather than wait to see sufficient interest before commencing sales and construction (the current BTO model.) If this happens, we will see even more supply in the market going forward.

Simply put, I think HDB has learned its lesson from the last supply crunch and will keep numbers high to avoid a repeat spike in flat prices.

Private condo as retirement asset

New launch condos

New launch condos are still priced at dizzying heights, averaging $2,339 psf, up from $1,815 psf back in 2020. Do note that the price has actually dipped slightly from February 2023 though, which saw a peak of $2,627 psf.

It’s quite a struggle for new launch prices to fall, even as more condos are completed. This is because developers are facing high land costs, increased material and labour costs, as well as higher ABSD and Land Betterment Charges, which limit the amount of discounts they can give. Profit margins have also been very slim.

Despite the high prices of new launch condos, many investors still prefer them to resale condos.

See my article on 6 reasons why new launch is better than resale as investment property.

Resale condos

In the resale condo market, prices also soared to an average of $1,585 psf, rising from $1,261 psf back in 2020. This is also, to some extent, related to the uptick in new launch prices (new launches in a neighbourhood have a knock-on effect, and will also cause local condo prices to rise slightly.)

As with HDB flats, however, the supply crunch is being resolved. This year, a number of particularly large meta-developments, such as Normanton Park (1,862 units!) and Treasure at Tampines (2,203 units!) will be completed. This is likely to soak up demand from the existing market, and we’re already seeing the impact in rental markets. In August 2023, rental rates were already slowing from a six-year high, as more units finally became available.

However, it remains to be seen if recent ABSD hikes won’t curb resale supply. Owners of multiple properties may be resistant to selling, even in collective sales.

Consider that, if you bought a second condo without ABSD before, selling now means that your replacement unit will cost 20 percent ABSD. As such, en-bloc sales have yet to see a resurgence, despite the 2017 tranche of properties already being completed and sold.

Hence, it’s unlikely that private property prices will fall per se though volume has dropped; at best, we may see a slower pace of price hikes.

As the last round of cooling measures was so recent though (June 2023), we will have to wait a while to gauge the extent of its impact. For now, it’s possible the full consequences of the ABSD rate hike may not yet have fully sunk in. A chief concern here is the ability of individual buyers to take on a full mortgage.

Because the ABSD rate is so high, investment properties make the most sense if you can decouple to buy separately (i.e. a husband and wife both buy units under their individual names, to avoid incurring ABSD). The problem is that, with home prices and interest rates currently high, it is tougher to qualify for separate home loans. For now, it’s a toss-up on whether many can afford to decouple and dodge ABSD.

Implications of condo units for retirement planning

Due to higher costs, it becomes ideal to upgrade before the age of 40, when financing restrictions start to bite
There may be more impetus to upgrade if possible, as flats become less investment-oriented
En-bloc sales have become less reliable as an exit strategy

1. Due to higher costs, it becomes ideal to upgrade before the age of 40, when financing restrictions start to bite

Consider decoupling to avoid ABSD. This requires each spouse to take on an entire mortgage individually. Given that a 1,000 sq. ft., new launch unit now averages $2,339 psf, this means at least one spouse is taking on a family-unit with a quantum of over $2.3 million.

On top of this, the Total Debt Servicing Ratio (TDSR) caps monthly loan repayments to 55 percent of monthly income, using a floor rate of four percent per annum.

Now assuming a maximum loan quantum of 75 percent of the property value, at 25 years, this is a loan of around $1.67 million. This is a monthly repayment of $8,815 per month, which would require an income of over $16,000.

This is already quite a high bar, and most buyers would end up having to make a bigger down payment to meet the TDSR. But if you wait past the age of 40, your maximum loan tenure will decrease (as your age plus the loan tenure cannot exceed 65, or else maximum financing falls to 55 per cent.). Shorter loan tenure will translate into higher monthly mortgage payments.

In short, those who want dual properties without paying ABSD, and rental income after retirement, need to act sooner. The older they get, the harder it is to get financing; and again, property prices may not fall, so much as just slow the pace of increase.

In short, those who want dual properties without paying ABSD, and rental income after retirement, need to act sooner. The older they get, the harder it is to get financing; and again, property prices may not fall, so much as just slow the pace of increase.

2. There may be more impetus to upgrade if possible, as flats become less investment-oriented

HDB has given clear signals that flats are intended for home ownership first. Investment benefits are secondary; it’s nice if it happens, but it’s not the primary benefit. This is not entirely a bad move, by the way, and it’s much fairer to those who seek pure owner-occupancy.

However, this could fuel motivation to own a private property, with regard to having a retirement asset. Because if all else fails and retirement funds run out, a condo can still be sold off while you right-size to a flat. But if all you have is a flat, there’s not much left to downgrade from (except perhaps to a smaller flat, or to sell off the excess lease, which may only be a marginal help.)

They are not, however, as lucky as the previous batch (from the 2008 to 2013 era) who were able to buy without ABSD concerns.

3. En-bloc sales have become less reliable as an exit strategy

Unless sale proceeds for en-bloc become so high that sellers can replace the property, even despite 20 percent or higher ABSD, I would expect tooth-and-nail resistance to collective sale. Doubly so from investors who are foreigners or corporate entities, as their replacement units would cost 60 percent ABSD (!)

Developers are already facing higher ABSD rates and financing rates, and the surge of Chinese developers with deep pockets – as we saw in 2017 – is unlikely (China’s real estate market is in a severe crisis, so we shouldn’t expect their big developers to come and throw money around like before.)

For these reasons, I would be cautious of counting on en-bloc sales as an exit strategy going forward. Private property can still be a retirement asset in terms of providing rental income, or resale gains to individual buyers; but not in the sense of developer buyouts.

For insights into a specific property for retirement, or a review of your property progression in 2024 and beyond, do contact me for personalised help.

Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.

Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.

Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker.

Subscribe to receive updated practical property investment insights, property reports and good investment deals

The post How Your Property Can Still Provide For Retirement In 2023 And Beyond appeared first on Holland Property.

PINETREE HILL

hollandproperty — Mon, 16 Oct 2023 15:47:46 +0000

PINETREE HILL

Pinetree Hill is the latest condo launch in the Pine Grove and Mount Sinai neighbourhood.

Nexus International School previously occupied the site and was later released by the government for sale as Parcel A and B. Pinetree Hill sits on Parcel A.

This 99-year leasehold condominium, developed by the reputable UOL, is expected to be completed in 2027.

The development is situated on a land area of 22,535 sqm with a Gross Floor Area of 47,323 sqm and will consist of 520 units.

Pinetree Hill is nestled in a district known for its lush greenery and proximity to educational institutions. Clementi Forest, Rail Corridor and the future Clementi Nature Trail are all within short walking distance away, which will appeal to nature-lovers.

Project Details of Pinetree Hill

PROJECT DETAILS
PROJECT NAME	Pinetree Hill
ADDRESS	30, 32, 36 Pine Grove
DEVELOPER	United Venture Development (No.5) Pte Ltd
TENURE	99 years
DISTRICT	21
SITE AREA	242,561 sq ft
GROSS FLOOR AREA	509,380 sq ft
NO OF BLOCKS	3
NO OF STOREYS	24
NO OF UNITS	520
TOP	September 2027
ROOM TYPES & SIZES	1+Study (538sf) 22 units / 2 bedroom (700-915sf) 158 units / 2+study (797sf) 68 units / 3 bedroom (969-1173sf) 68 units / 3+study (1216-1421sf) 91 units / 4 Bedroom Deluxe (with Private Lift) (1292-1485sf) 45 units / 4 Bedroom Premium (with Private Lift) (1464-1668sf) 45 units / 5 Bedroom Premium (with Private Lift) (1733sf) 22 units / Penthouse (2874sf) 1 unit

Likes and Dislikes

Reputable developer
Within 1km of Henry Park Primary School and Pei Tong Primary School
Methodist Girls’ School, Nan Hua High School, NUS High School, Anglo-Chinese Junior College, Singapore Polytechnic, Ngee Ann Polytechnic and NUS are all within easy reach.
Filling in a void of new home supply in the neighbourhood
Seamless accessibility to a wide range of retail and lifestyle amenities. Within 5 to 15 minutes’ drive to shopping, dining and entertainment options include Jelita Shopping Centre, Clementi Mall, Holland Village, The Star Vista, Rochester Mall, Dempsey Hill and Orchard Road Shopping Belt.
Short drive to international schools, such as Tanglin Trust, United World College, and Dover Prep School
Within 10 minutes drive to one-north Business Park, Singapore Science Park I & II and future Dover Knowledge District, which houses well-known leading companies in key growth sectors from biomedical sciences, info-communications technology, media and start-ups, and science & research institutes.
Near Rail Corridor, Clementi Forest and the future Clementi Nature Trail
Near Ulu Pandan Park Connector
Future growth potential with the sale of Parcel B and nearby vacant lands
All units N-S facing

Not near MRT station
Not within short walking distance of amenities. The nearest amenities are the limited choices at Pandan Valley condo
There are only 420 carpark lots for 520 units.

Facilities

Pinetree Hill offers a full range of condo facilities, which include a tennis court, half basketball court, outdoor gym, aquatherapy pool, outdoor pavilions, karaoke room, etc.

A significant 88% of the land is dedicated to landscaping, offering generous space for residents to enjoy.

Orientations and Views

One of the biggest plus points of Pinetree Hill is that all three towers are well spaced out and not directly looking into each other.

Every unit enjoys a North-South facing, hence avoiding the dreadful afternoon sun.

The development is on elevated ground. The design of the three towers gives extra elevation, thus enhancing the view of every unit.

The lowest floor units are about 12.5m above ground level. Not only this improve the vantage point of every unit, it also allows wind flow throughout the whole landscape. This is an increasingly popular architectural design concept.

High-floor north-facing units will get to enjoy an unblocked view of Clementi Forest; whereas the south-facing units may catch a glimpse of Dover Forest.

DRONE VIEW

Whatspp me for the floor plans and virtual tour

Pricing

The sale prices range from S$2,215 to S$2,705 psf, with an average of S$2,368 psf.

The breakeven price for the developer is $2,248psf. It translates to a slim profit margin of only 5.33%. It means the developer is pricing to sell.

The demand for 3-bedroom and 4-bedroom units is higher for this project because it is targeted more at homeowners, understandably so. Hence, we see price $PSF is higher for the bigger units.

Is the pricing attractive for investors?

The closest competitor to Pinetree Hill would be The Reserve Residences, which is selling at an average price of $2,489psf. Though more expensive, TRR is an integrated project that is connected to the Beauty World MRT. Furthermore, it is within 1km from two popular primary schools: Pei Hwa Presbyterian and Methodist Girls.

If one were to buy for investment, personally I wouldn’t go for the small 1+study and 2-bedders for this project. The tenant pool for singles and couples is small since it is not within walking distance to MRT station or office complex. They are not likely to own cars.

Sizes of the smaller units are too big

The sizes of the 1-bedder and 2-bedders are also bigger than those of other developments.

Take for example, the 1+study is 538sf, which is bigger than the 506sf in Stirling Residences.

The 2BR/1bath is 700sf. For this size, it could easily have been 2BR/2bath.

The 2BR premium (2BR/2bath), with a size of 764sf, would have included a study.

What this means is the quantum prices are higher, which do not make good sense to investors.

So, it is not surprising to see that since its launch, Pinetree Hill still has an outstanding stock of 143 units of 1+study to 2+study. In contrast, the 1-bedders and 2-bedders at The Reserve Residences were snapped up on launch day.

How about the pricing of the bigger 4-bedder units at Pinetree Hill and The Reserve Residences compares?

Prices of 4-bedders

The 4BR Premium (1464sf) now at Pinetree Hill starts from $3,454,000 ($2,359psf). On the other hand, the 4-bedder (1475sf) at The Reserve Residences starts from $3,318,001 ($2249psf). So it does seem like The Reserve Residences is a better buy in terms of price. But personally I prefer the layout of Pinetree Hill 4BR premium to The Reserve Residences. The landscape orientation of the former gives it a more spacious feel. The kitchen is also more squarish and spacious, and the yard comes with a bomb shelter which can be used as helper’s room. And with its N-S orientation, it doesn’t have the dreaded afternoon sun. As for The Reserve Residences, while it enjoys a glimpse of Bukit Timah Hill, the afternoon sun can be a setback.

Potential

With the next-door Parcel B releasing soon, plus the potential en bloc of many ageing condos in the area (such as Cavendish Park and Pine Grove), buying into Pinetree Hill now will mean enjoying a first-mover advantage.

Who then should buy Pinetree Hill?

The main reason for buying Pinetree Hill is its proximity to the popular Henry Park Primary School. So the main draw is for those parents who want to send their children to this school. In this case, walking distance to the MRT is not as critical a criterion because such families are likely car owners. It is not ideal for investors buying into the smaller 1-bedder and 2-bedder because the catchment of tenant pool will be limited.

The Pine Grove/Mount Sinai enclave is a very pleasant neighbourhood. It is also quiet, compared to The Reserve Residences that is surrounded by PIE and several major roads.

If you are keen to explore further with me on the potential of Pinetree Hill, feel free to get in touch with me.

Danny Han is a licensed property agent since 2005.

What Danny is passionate about is not just about showing clients properties around Holland Village, but also enjoys sharing anecdotes and nuggets of information that are part of his growing up years.

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Get a 1-time free 30 min Property Wealth Planning consultation. Schedule one right now by using the calendar below .

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LEEDON GREEN (Former Tulip Garden): Review

hollandproperty — Mon, 16 Oct 2023 12:12:02 +0000

Updated on 16 October 2023

LAST 9 UNITS! 1+STUDY (8 UNITS) / 3BR (1 UNIT)

LEEDON GREEN (Former Tulip Garden): Review

Click here for

It’s not often that we have the chance to own a freehold property near Holland Village, so these always get my attention. One such new development is Leedon Green, which is located at the junction of Farrer Road and Holland Road. If you remember the old Tulip Garden condo that went en-bloc, well, this is it: Leedon Green is the development that replaced it.

This new project is nestled within an affluent and tranquil neighbourhood, and at the fringe of an exclusive Good Class Bungalow area.

Key Points To Note About Leedon Green

Freehold and in the prime district 10
Very close to Holland Village (about three minutes’ drive – you can even take a 12-minute stroll [950m] to get there on foot)
Short drive or bus ride to Holland Village, Botanic Gardens, Dempsey Hill and Orchard Road
Proximity to some of Singapore’s most famous schools
Within 1km (part of Leedon Green) to Nanyang Primary School
The expected TOP is sometime in 2023

My Ratings on Leedon Green

7.3

 7.3/10

Accessibility

 7.5/10

Facilities

 9/10

Site

 7/10

Finishing

 8/10

Amenities

 5.5/10

Price

 6.5/10

Pluses of Leedon Green

Big site
Blocks well spaced out
Nice facilities
3 swimming pools
80% of land goes to landscaping, communal spaces and facilities
Sheltered walkway to bus stop
Quality finishing
Alternate road access via Holland Road to avoid congestion at Farrer Road
Within 10 minutes walk to Farrer Road MRT
Short driving distance to places such as Holland Village, Dempsey, Orchard and Botanic Gardens
Good rental market for expatriate families

Minuses of Leedon Green

Possibly only one block in the development is within 1km to Nanyang Primary School
Not many amenities within walking distance. Nearest is Empress Road Market and the nearby shops. Holland Village is about 12 min walk away
Few blocks face either Farrer Road or Holland Road, thus affected by road noise, while others look into either Leedon Residence, D’Leedon or 90 Holland
Blocks are not high enough to enjoy panoramic views, unlike D’Leedon

Development Summary

Leedon Green is a freehold development, jointly built by MCL Land and Yanlord Land (most Singaporeans will be familiar with MCL, but not Yanlord – this is because Leedon Green is Yanlord Land’s first development in Singapore. I’ll talk more about this below).

Leedon Green is a mid-sized development consisting of 638 units. Unit distribution is as follows:

Unit Type	Size (sf)	Number of Units
1 bedroom	474	44
1 bedroom (sky unit)	603 – 689	11
1 bedroom + study	538 – 581	90
2 bedroom	614 – 872	264
2 bedroom (sky unit)	753 – 926	15
2 bedroom + study	818	41
3 bedroom	958 – 1485	66
3 bedroom (Premium)	1044 – 1163	45
3 bedroom (sky unit)	1604	1
4 bedroom*	1496 – 2680	60
4 bedroom (sky unit)	1744	1

*Five of the units are four-bedroom Garden Villa units. These have a landed-property feel, and are huge at 2,400 to 2,680 square feet. All the five units have been sold, each cost more than $6 million.

Almost 72 per cent of the development comprises two-bedders and two plus study, which means the developer is catering more to couples or small families. This is not surprising since young couples are likely to buy for its proximity to Nanyang Primary School.

I feel that the typical four-bedders, while decently sized at 1,496 square feet, could do with more than one en-suite bathroom (i.e. a bathroom directly connected to the bedroom). Having only one en-suite bathroom is a bit inconvenient for larger families. You know what it’s like in the morning when everyone rushes to shower, brush their teeth, etc. all at once, right? That said, apart from the bathrooms, the layout is quite efficient.

The five Garden Villa units are rare townhouses in a brand new freehold project. Hence, they were in high demand and were all snapped up in double-quick time.

As another interesting feature, 56 of the four-bedroom units come with private lift access (around 30 of the three-room units also have this same feature).

Finishing and Layout

A few things stand out for Leedon Green.

The developers have paid extra attention to the bigger 3-bedroom and 4-bedroom units.

The 3-bedroom basically come in two sizes: 1044sf (3-bedroom premium) and 1356sf (3-bedroom exclusive). The 3-bedroom exclusive layout is very comfortable for a family of 4. Even the smaller 3-bedroom premium is also fairly comfortable with an enclosed kitchen and a helper’s room (not bomb shelter).

(Click here) Virtual Tour for

Leedon Green 3-Bedroom Layout

In this review, I would like to highlight the 3 and 4 bedroom layouts.

Leedon Green comes with a smaller 3-bedroom premium (1044sf) and a more spacious 3-bedroom exclusive (1356sf).

Here are the key differences between the two:

Living/dining area: premium has a portrait orientation whereas exclusive landscape. The latter gives a better sense of space.
Lift: Exclusive version comes with private lift but not for premium.
Master bedroom: Exclusive has a bigger ‘walk-in’ L-shaped wardrobe
Kitchen: The Exclusive layout has wet and dry kitchens (with 2 refrigerators) versus a normal kitchen for the Premium layout
Utility/helper’s room: The Premium utility room can be used as a dedicated helper’s room. For the Exclusive version, the utility, helper’s room and yard are 3-in-1.

The walk-in L-shaped wardrobe for the 3-bedroom Exclusive will be welcomed by the lady of the house. Most of the time, the wardrobes in the master bedrooms are too small.

The kitchen in the Exclusive comes with induction cooker for the dry kitchen and gas cooker for the wet kitchen.

The developers have a big family in mind by offering two refrigerators! The one in the wet kitchen is a massive one. A dishwasher is also installed. This will be good for expatriate families where a dishwasher is a basic necessity.

In the dry kitchen, a built-in wine chiller is provided.

There is no dedicated utility room or helper’s room for this layout. But it has a spacious yard with a back door. Some ID work would be required to turn this utility cum yard area to accommodate your helper. Possibly, the back access might be sacrificed to maximise the usage of the space.

(Click here) Virtual Tour for

Leedon Green 4-Bedroom Layout

The 4-bedroom Exclusive is very similar to the 3-bedroom Exclusive. Apart from having an additional room, most parts of the apartment are about the same.

Facilities and Grounds

The sprawling Leedon Green has a land size of over 306,000 square feet. Around 80 per cent of this is given over to landscaping, communal spaces and facilities. A noteworthy element of the design is that – rather than have a few flat gardens – the terrain is terraced, with green spaces on different levels.

(Click here) Other room types

One thing I like about Leedon Green is that the blocks are well-spaced out from one another.

The blocks are diagonal to Farrer Road and Holland Road; this facing reduces direct road-noise but comes at the expense of a North-South facing. This orientation, however, typically means indirect afternoon sun.

The best facing units are those facing inward or pool-facing. Those outward-facing units are either fronting the noisy Farrer Road and Holland Flyover, or looking into Leedon Residence (but at least they are quieter).

It would have been ideal if the blocks were a bit higher – at 12 storeys the view is not as spectacular as, say, D’Leedon. Higher also means they can overlook Leedon Residence next door.

Facilities wise, Leedon Green offers three large swimming pools; this includes a grand pool, lap pool, and aqua fitness pool. There’s a tennis court available, and a unique treetop walk that gives a great view of the multi-level, terraced approach to landscaping.

Location

Leedon Green is in a prime location. As I mentioned above, it’s about a three-minute drive to Holland Village (around a 12-minute walk on foot), and a roughly 10-minute drive to the Orchard area. Raffles Place would be about a 20-minute drive.

Traffic-wise, I guess you already know I’m going to warn you about the noise and congestion; this is a busy intersection, no way around it. The nearby D’Leedon – in which I’ve handled rental and sales as well – had broadly the same negative feedback regarding the roads here.

If the road noise bothers you, I would avoid picking the units directly facing Farrer Road or Holland Road.

With regard to congestion, fortunately Leedon Green has an alternative vehicular ingress and egress via Holland Road – that’s an advantage Wilshire Residences doesn’t have. Most of the congestion is from the Farrer Road stretch, heading towards Orchard.

Local Owner-Occupiers

Leedon Green is in between the Farrer Road and Holland Village stations. It’s about 950 metres to each one. This distance is not exactly a comfortable walk, especially on a sunny or rainy day. Since Leedon Green is targeting more at families who are likely car-owners, this may not be an issue.

For owner-occupiers, one of the main draws of the location will be schools. Many of Singapore’s most famous educational institutions are within close proximity to Leedon Green. The following schools are all within a 10-minute drive of Leedon Green:

Fairfield Methodist Primary School
Henry Park Primary School
*Nanyang Primary School
Raffles Girls’ Primary School
Singapore Chinese Girls’ Primary School

*If you are buying Leedon Green to enrol your children into Nanyang Primary School, you can check with me which blocks fall within the 1km boundary. The new way of calculating the 1km has resulted in more blocks that fit the criteria.

Expatriate Families

For expatriates, Holland and Farrer Road areas are always popular choices because some international schools, such as the Orchard campus of Chatsworth International School, as well as Hwa Chong International, ACS International, United World College and Tanglin Trust are all nearby.

I feel the location brings potentially high rentability; especially for the expatriate crowd who frequent Holland Village, and want quick access to Orchard or the CBD. As many of these tenants probably use Private Hire Vehicles or rent a car anyway, the distance to the MRT station may not be an issue to them.

Coupled with the lifestyle amenities of Holland Village, this will be a draw for families. However, I should point out that most of the retail, food, etc. isn’t surrounding or directly across the street from Leedon Green. If you don’t drive, this may involve quite a bit of walking to get there. So this is one main drawback.

Small Investment Units

If you are buying the smaller one-bedders for investment, you will face stiff competition from One Holland Village (in the heart of Holland Village) and D’Leedon (nearer to Farrer Road MRT) when looking for expatriate tenants who will likely be singles and young couples. They probably won’t own cars, and so easy access by MRT will be a crucial factor.

Is that the reason why at the moment these small units are not moving very well as compared to the bigger units?

Best Stacks

The way the blocks are oriented, they are not North-South facing. So generally the units either get road noise or afternoon sun. Not easy to get the best of both worlds.

These are my recommendations:

1-bedroom: stacks 25 and 33. Do get some afternoon sun in the balcony. Nice pool view. Block 38 is quite a distance away. No road noise.
1-bedroom plus study: Stack 32 with nice pool view and distance from next block. Stack 8 may have a bit of road noise. No afternoon sun. Near to BBQ pavilion, tennis court and exit to Farrer Road. Can also consider stacks 50 & 58 though may also have some road noise from Farrer Road but have no afternoon sun.
2-bedroom: stack 01. No afternoon sun. Pool view. Some road noise. Likely within 1km to NYPS. Can also consider Stack 4 though view not as good but away from road noise). Stack 5 will have more afternoon sun than Stack 4. Stack 51 also has nice pool view but slight road noise.
2 plus study: Stack 52. May have some road noise. Pool view and no afternoon sun.
3-bedroom: Stack 06. Within 1km to NYPS. Least afternoon sun compared to the other stacks but may suffer slight road noise. Choose a lower floor may help because road travel upward and trees can help shield some. Possibly level 3 to 5.
3-bedroom Premium: Most difficult to choose from because either road noise or afternoon sun. Best of the worst is possibly Stack 7. Choose lower floor.
3-bedroom Exclusive: Stack 49 has the least road noise but some afternoon sun.
4-bedroom Exclusive: Interestingly all stacks have afternoon sun. Stack 02 would be the best with nice pool view and within 1km to NYPS.

Prices

Prices are in the range of about $2,600 to $2,700 psf, which is typical for the prime location and freehold status.

Average prices for freehold condos in District 10 is about $2,573 psf, having appreciated from just $943 psf back in 2005 (about a 172.7 per cent increase).

(Note that new launches are always priced higher than surrounding resale units, hence Leedon Green’s $2,600 to $2,700 psf is about right). This price level may not be comfortable to many, but this is the new norm for freehold new launches in district 10.

(You can check with me for the latest prices)

Now earlier, I noted that many of the units tend to be smaller two and one-room units. While the price per square foot is high, the smaller unit sizes mean the overall quantum (overall cost) is more affordable than you’d think.

Prices for one-room units start from around $1.31 million, while two-room units from around $1.66 million.

The three-room units are from $2.43 million up, while four-room units from $3.83 million up.

The low quantum, plus central location, will make Leedon Green very attractive to homebuyers looking for new freehold projects . Good yields are quite hard to find among freehold, prime district units.

For home buyers buying for own stay, Leedon Green may appeal to singles, or even to older couples who are empty-nesters or retirees. By getting a smaller unit here, you can effectively trade-off some unneeded space, in exchange for living relatively near to Holland Village and Orchard (and the facilities of a high-end condo, of course).

Future Potential

You maybe wondering at this price level, will there be any upside potential?

The first thing to take note is, high price PSF is here to stay for new launches. Even some OCR launches are already selling above $2,000 psf.

Boulevard 88 in Orchard area already selling at an average price of $3,708 psf, with the highest record at $5,125 psf transacted in June 2019!

Along the stretch of Holland Road and Farrer Road, there are few other older developments, such as Spanish Village, Sommerville Park, Sutton Place and Sommerville Grandeur. In the future, when these developments face the grinds of ageing and decide to go en bloc, then the surrounding projects will look ‘cheap’.

A Note on the Developer

Some buyers may be sceptical given that they’ve never heard of Yanlord Land. But to be clear, this is a foreign developer entering the market, and not a new developer. Yanlord is a large, listed firm with many properties under its belt in China.

Also, Yanlord Land’s partner, MCL Land, is an established local developer; and in most of these cases, the developer new to the country will let the established one take the lead. So I don’t feel there’s much to worry about here.

Final Thoughts

Leedon Green is one of the few opportunities many of us will have, to afford a freehold property in District 10. There are other prime region developments of course – but we can usually expect the quantum of these units to reach the $2 million mark, pricing it out of reach for most of us.

Besides this, I feel that ongoing developments in Holland Village – and the revamp of Orchard Road – bode well for the long term value of Leedon Green. As an investment, I feel this development is likened to a ‘blue chip’ stock – will do well as a long-term play (e.g. hold for 15 years before selling).

If you would like to find out more about the project, feel free to contact me or book me for a virtual presentation using the calendar below.

Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.

Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.

Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker.

New Projects in Holland

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PARKSUITES

hollandproperty — Mon, 16 Oct 2023 09:11:12 +0000

PARKSUITES: SOHO Living By The Park

Last Units. Can view actual units.

PARKSUITES BY FAR EAST

Kentish View Pte Ltd, a unit of Far East Organization (FEO), bought the Henry Park site in Dec 2011 for $175.9m. The tender attracted 5 bids. It is now developed into Parksuites.

The land size of the 999-year leasehood site is around 100,000 sq ft, comprising 16 shop units and 48 apartments.

The price works out to $1,246 psf ppr.

The developer is selling this new condo launch as a 101-year leasehold property.

A garden of possibility. Where park living thrives.

A home inspired by the park-scape, Parksuites is designed to be intimate, and will fit right in to the close-knit community that has formed in this charming locale. Enjoy more than just sweeping views of the greens; surround yourself with spaces that open up to nature. It is Henry Park reinterpreted. It is SOHO living like you’ve never seen before.

SOHO living by the park. A level of its own.

At Parksuites, discover a residential development integrated with artisanal retail and F&B options within. Shop and dine amidst the cool and welcoming greenery of Henry Park with the comforts of home literally steps away. Truly, a unique setting like no other.

Woh Hup – an established construction company and multiple award winner of Quality Excellence – Quality Champion (Platinum) by BCA, for the sixth year running, is the construction company awarded for Parksuites.

Connectivity. Surround with life.

Let convenience find you as you live close to everything that matters most. Situated along Holland Grove Road and the tranquil neighbourhood of Mount Sinai, Parksuites offers you a location that brings the world nearer to you. Now, you can get to any point of the city fast, so you can have more time with life.

Henry Park Primary School, a renowned GEP school (one of nine primary schools in Singapore offering Gifted Education Programme) is located within 1KM of Parksuites, aligned for your child’s educational journey.

Last 10 units left!

1 Bedroom 592sf $1,385,190

1 Bedroom + Study 635sf S$1,472,777

2 Bedroom Dual-Key Duplex 1098sf S$2,605,786

2 Bedroom + Study 786sf From S$1,960,552

3 Bedroom Dual-Key Duplex 1421sf S$3,397,997

4 Bedroom Triplex 3068sf from $7,849,118

SELLING POINTS OF PARKSUITES:

Right across from Henry Park Primary School
District 10
Landed neighbourhood of Holland Grove
Quiet environment
Foreigners are eligible to buy the townhouses (4BR triplex)
There are 2BR and 3BR dual-key units
Near Jelita Cold Storage
Near Ghim Moh market
Short drive to Holland Village
Good quality finishing
Mixed development with shops which provide the convenience of amenities
Low-rise development

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February 16, 2024 No Comments

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January 5, 2024 No Comments

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WILSHIRE RESIDENCES

hollandproperty — Thu, 05 Oct 2023 08:52:00 +0000

LAST UNIT: 2BR 753SF $2.266M
Can view actual unit

Wilshire Residences

Roxy-Pacific and TE2 Development Pte Ltd will jointly develop Wilshire Residences. They had acquired The Wilshire for $98.8 million in Jan 2018, which works out to a land rate of $1,536 psf per plot ratio (ppr). The freehold site has an area of 3,635.3 sq m (or 39,130 sq ft) and a plot ratio of 1.6.

The new condo will be a stunning 12-storey single-tower that responds harmoniously to its surrounding as its crystalline glass facade captures and reflects Singapore’s bustling cityscape.

The project was launched in early October 2019.

Beyond its impressive stature, the tower block is oriented intentionally to invite the admiration of its landscaped surroundings and the Singapore Botanic Gardens.

Wilshire Residences, brimming with possibilities, is where home takes you places. Stay in and indulge amidst the delightful amenities or step out into the city that never ceases to amaze.

GRAND ARRIVAL

You can experience every arrival marked with welcoming elegance when you step into Wilshire Residences where the grand drop-off lobby beckons invitingly,

LIFE AT ITS BEST AT WILSHIRE RESIDENCES

You can take a dip and swim a lap or two in the 25m swimming pool amidst the holistic retreats and amenities inspired by nature. Or enjoy an adrenaline rush working out at the Outdoor Fitness Lounge.

At Wilshire Residences, you can reconnect with yourself and give back what your day takes away.

COMMUNAL ROOF TERRACE

At the communal roof terrace, you can sit back and admire the fabulous view of the Singapore Botanic Gardens and its stunning surroundings. The array of amenities is designed to encourage a highly social and vibrant community.

SPECIALLY CRAFTED

Each apartment is designed to deliver a luxurious calm, allowing you to be the best version of yourself. Through the spacious master bedroom, living and dining spaces, the choice of material and joinery expressed a discerning touch of flair.

The enclosed kitchen is a showcase of modern sophistication, featuring finely crafted details, evoking a sense of comfort and relaxation for each residence. Wilshire Residences is carefully crafted to make it truly a place deserving to be called home.

Floor Plans

Project Details

PROJECT DETAILS
PROJECT NAME	Wilshire Residences
ADDRESS	30 Farrer Road. Singapore 266832
DEVELOPER	TE2KS-RH Pte Ltd. A joint venture between Tong Eng Group, Roxy-Pacific Holdings Pte Ltd and Kim Seng Holdings Pte Ltd
TENURE	Freehold
DISTRICT	10
SITE AREA	39,130 sq ft
GROSS FLOOR AREA	62,608 sq ft
NO OF BLOCKS	1
NO OF STOREYS	12
NO OF UNITS	85
TOP	31 July 2023
ROOM TYPES & SIZES	1BR 463sf / 2BR 646sf / 2+Guest 732/743/753/797sf / 3BR 840sf / 4BR + Guest 1270-1485sf

Prices:

Star buy units (prices after 10% project discount + 2% Star Buy discount + additional $10k-15k):

1BR 463sf $1.166m $2,518psf (list price $1.333m)
2BR 646sf $1.602m $2,480psf (list price $1.833m)
2+Guest 732sf $1.847m $2,523psf (list price $2.11m)
3BR 840sf $2.146m $2,555psf (list price $2.433m)
4+Guest 1270sf $3.346m $2,635psf (list price 3.811m)

Prices subject to change

Selling Points of Wilshire Residences:

District 10 freehold condominium
At about $2,600+psf, it is competitively priced against the upcoming new projects‘ expected prices.
Near to excellent schools eg. Nanyang Primary School, Hwa Chong Institution and other local and international schools
Near Botanic Gardens, Dempsey Hill and Orchard Road
Near Holland Village
Walking distance to Farrer Road MRT
A low-density project with only 85 units

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September 6, 2025 No Comments

New Launch vs Resale Condos In 2024: Which To Buy?

February 16, 2024 No Comments

Is It Still Worth Buying A Freehold Property For Retirement?

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4 Options After HDB Flat Reaches Minimum Occupation Period (MOP)

hollandproperty — Sun, 17 Sep 2023 11:53:13 +0000

4 Options After HDB Flat Reaches Minimum Occupation Period (MOP)

HDB Minimum Occupation Period (MOP), So What?

What’s the fuss about HDB Minimum Occupation Period (MOP)?

Some people look forward to their BTO (Build-To-Order) HDB flats reaching the MOP like their ORD (Operationally Ready Date). Those who had served their two-year national service would know the feeling.

To the majority, however, MOP may mean nothing.

Don’t get me wrong. It’s perfectly normal. After all, you had waited in great anticipation for your BTO flat (likely your first matrimonial home) five years ago. You had put your heart and soul (and of course, money) to renovate the flat. It is your pride and joy. So, it makes sense to continue to enjoy it for as long as you can.

To others, it signals the beginning of their roadmap to realise their property wealth planning or fulfil their aspirations of upgrading to private property.

More Are Selling Their BTO HDB Flats Upon Reaching MOP

Based on a Straits Times report dated Jan 30, 2020, in 2019 the sale of HDB flats less than 10 years old numbered 4,578, which was an increase of 33.4 per cent over the preceding year.

Over the years, more and more HDB owners sold their flats within a year upon reaching MOP:

2016 6.5% (811 units)
2017 9.5% (1,091 units)
2018 11.8% (1,392 units)
2019 12.2% (2,736 units)
2020 13.4% (2,919 units)

It shows that to a growing number of Singaporeans, their HDB flat is not meant to be a home for life but a stepping stone to a bigger plan.

I have helped several HDB owners fulfil their upgrading dreams by selling their flats upon reaching MOP.

A 3-room flat owner in Yishun contacted me months before his flat reached MOP to discuss the plan to sell it and upgrade to private property. Immediately upon reaching MOP, I put the flat on the market. Within a few weeks, it was sold for a record price of $450,000 with a gain of almost 100%.! The record still stands today.

Very recently, I sold a 4-room flat in Toa Payoh, a few months after MOP, at $950,000 within a week. The high-flying young couple intends to buy a landed property.

These are just a sample of many HDB owners who cashed out on their MOP flats to realise their upgrading aspirations.

It shows that to a growing number of Singaporeans, their HDB flat is not meant to be a home for life but a stepping stone to a bigger plan.

In the last few years, we have seen an increasing number of HDB resale flats sold for over a million dollars. They are not just flats in central locations but include estates such as Woodlands, Bukit Batok, Yishun and Jurong East.

These HDB owners recognised their acres of diamond and sold their highly-valued flats to upgrade to private property.

What is HDB Minimum Occupation Period (MOP)?

MOP is what sets public housing (HDB and EC) apart from private property.

Anyone who buys a BTO HDB flat, resale HDB flat and new Executive Condominium (EC) are all subject to the five-year minimum occupation period. During these five years, owners are not allowed to sublet the whole flat or sell it on the open market. If the flat owner has the approval to sublet the entire flat (eg. work or study overseas), the period of subletting will not be part of the five years.

Why Is There An HDB Minimum Occupation Period (MOP)?

The underlying reason why the government imposes the minimum occupation period for public housing is to curb speculations.

HDB flats are meant primarily to provide affordable housing for the public and not for profiteering.

I frequently came across ‘investors’ who entertained the idea of buying an HDB to rent out since the entry price is relatively low, and the rental yield is attractive. But the moment they heard that they can’t rent out for the first five years, that shattered their dream.

HDB MOP is an Important Milestone

HDB MOP is an important milestone because this is the point at which you can rent out your entire flat, or sell it on the open market.

But before you think about what to do, you must ask yourself if you have a game plan. Most people have no such plan, so they are happy to maintain the status quo by staying put. It is perfectly all right to be in this group of people. Upgrading and property wealth planning may not be for everybody. Different strokes for different folks.

If, however, you are keen to embark on the journey to grow your wealth through property investment, then you need to start planning. It is ideal for those who are in the 20’s to early 40’s. The younger you start, the better.

If you plan to sell to upgrade or to invest at the same time, it doesn’t mean you need to do it immediately upon hitting five years. Sit down with an experienced property agent and discuss your goals and aspirations, then devise a game plan.

Failing to plan is planning to fail.

Once you begin with the end in mind, then you can strategise how to execute the plans.

Don’t Sit On It Once Your HDB Flat Reaches Its MOP

It is not wise to wait too long to start planning.

I have clients who already started planning six months before the MOP.

If you intend to sell, the best time generally is within the first five years after MOP when the price is at its peak. In my opinion, it is better to sell earlier when your flat is still in tip-top condition. It is easier to sell and at a good price while the conditions of your flat are still very new.

It is not unusual for MOP flats to sell at more than 100% of their original prices. 50% to 70% is the norm.

Once you know your needs and plans, then you can consider the different options when your flat has fulfilled the HDB MOP:

Treating your flat as a pure rental asset and buy a private property
Purchasing another HDB flat
Upgrading to a private property
Taking a “sell one, buy two” strategy

Four Options To Consider Once Your HDB Flat Reaches MOP

1. Rent Out Your HDB Flat and Buy a Private Property

You may consider keeping your flat instead of selling it.

It might be an interim measure, such as by couples who need more time to accumulate cash before they upgrade. It can also be a contingency plan for those facing financial difficulties.

The idea is to move in somewhere else (such as with your in-laws) for a certain period. During this time, you rent out your entire HDB flat for income. This can help accelerate your savings rate to upgrade to a private property.

But do be cautioned that if you have an irresponsible tenant who messes up your nice flat, it may affect the value when you decide to sell.

If your flat is only five year old, likely it would still be in a pristine condition. That not only means easier to sell but also can fetch a higher value.

If you are PR, do take note this option is not for you because you are not allowed to sublet the whole flat. If you intend to purchase a private property, you would be required to sell off your flat.

If you intend to buy a private condo while keeping the flat for rental income, do consider the cost.

You will have to pay 20% ABSD.

If you were to buy a $1 million condo and are slapped with a $200,000 ABSD, that’s equivalent to 4.16 years of rental income (assuming you rent out your flat for $4,000 a month). Hence, from an economic point of view, it doesn’t make very good sense.

Furthermore, the rent is not much different between a five years old flat and an old renovated flat, even though the disparity in their resale values is great. From that standpoint, it is a waste to keep your five years flat for its rental income. Besides, at some critical points, the value of the flat will start to depreciate.

For those who have planned ahead even at the point when they purchase their BTO flats or resale flats with the intention to keep their flat upon meeting the MOP, the couple would have considered buying as owner-essential occupier instead of joint-owners. This would have saved them the ABSD.

If you intend to buy a private condo while keeping the flat for rental income, do consider the cost. You will have to pay 20% ABSD.

2. Sell Your HDB and Purchase Another HDB Flat

The idea of selling an HDB flat to buy another has fallen out of favour in recent years. Due to the declining prices of resale flats, there’s a chance these older flats won’t suffice as retirement assets.

HDB resale flats will likely see depreciation as they get older despite the current red-hot HDB market which was partly caused by the Covid-19 pandemic. The current supply shortage of resale flats and delay of BTO flat completion which result in the spike in HDB prices may not last indefinitely.

Since 2013, the overall HDB flat prices have trended downward after enjoying a strong run in the preceding years. This is due to a realignment of government policies to treat HDB flats more as a roof over your head than an investment. Also, diminishing lease of HDB flat has become a sensitive issue in recent years.

(This is good news for those who haven’t bought a home yet, as it keeps prices affordable; it’s not so good for those who seek to use their property as a retirement asset, or for wealth accumulation).

Selling your BTO flat and buying a resale flat is not always bad.

It might be suitable for those who are already in a ‘retirement mode’. Downgrading to a smaller flat can free them up with cash for their retirement funds.

There are also others who need a bigger home as their families get bigger and they can only afford to upgrade to a bigger flat instead of private condo. So there is no right or wrong option but a matter of needs, affordability and prudence.

So there is no right or wrong option but a matter of needs, affordability and prudence.

3. Upgrade to a Private Property or Executive Condominium (EC)

This is the time-worn, traditional method used by Singaporeans over the past few decades when their HDB flats reached MOP. You can sell the flat, and then use the cash proceeds to make the down payment to a private property.

Do take note if you were to buy a private property first then sell your HDB flat, you will need to pay 20% of ABSD (Additional Buyer Stamp Duty). Subsequently, when you sell your flat within six months, you can get a refund of the ABSD, provided the new purchase is under joint-ownership of the couple. But having to pay the ABSD first may affect your financial planning. So do plan your timeline properly.

On the other hand, if you were to upgrade to a new Executive Condo (EC) from your HDB flat, ABSD is not applicable.

For those who choose to upgrade from an HDB to private condo, it is to enjoy the improved facilities and privacy of condo living. However, there’s another advantage to doing this: it allows you to ensure your home is a better appreciating asset.

As such, many flat owners choose to use the proceeds of their flat to upgrade to a private condo or an Executive Condominium (EC)*. Assuming securing a full bank loan at 75% Loan-To-Value (LTV), you need just five per cent of the condo price in cash, while another 20 per cent can come from cash/CPF.

So you’d need $250,000 for a $1 million condo; it’s usually possible to meet this amount through the sale of your flat.

*EC is a viable alternative to a private condo, provided your household income does not exceed $16,000. Even though it has a similar five-year MOP, the prices are about 20 to 30 per cent cheaper than private condos.

Upgrading to a private condo is not as challenging or far-fetch as many may think. Supposed a couple (both aged 35) with a combined income of $6,000, they can possibly borrow up to $800,000. If their flat is worth $600,000, they can buy a condo worth up to about $1.3 to 1.4 million.

If you need help with the numbers, please feel free to contact me for a non-obligatory discussion.

Upgrading to a private condo is not as challenging or far-fetch as many may think.

4. Take a “Sell One Buy Two” Strategy

This is a popular strategy for dual-income families. Using this approach, the sales proceeds from the flat are used to purchase two properties; one by each spouse. For example:

Case Study:

Mr and Mrs Wee sold their five-room flat for $700,000 with an outstanding $100,000 loan. They have $40,000 each in their CPF account.

They want to buy a $1.5 million condo for own stay (under husband’s name), and a smaller $800,000 condo (under wife’s name) for investment. With the sales proceeds ($600,000) and CPF, they can pay the down payments of $375,000 and $200,000 for each of the respective purchases (assuming they have no problem taking the maximum 75% loan).

Later in life, they have the option of switching. For example, they could move to the smaller condo and rent out the bigger one, once the children have moved out.

This approach allows the family to hold two properties, without paying the Additional Buyers Stamp Duty (ABSD). This is because, after selling the flat, each spouse is effectively treated as a first-time home buyer (they have no other property to their name).

This strategy does require a certain level of income however, as both the husband and wife will each be taking on individual mortgages. Proper financial planning is crucial.

I can help you through the main concerns of both transactions; do contact me for a non-obligatory discussion.

Read in more details: Sell One Buy Two Why & How?

Start Planning When Your HDB Flat Is Reaching Its MOP

Meeting your MOP for your HDB flat presents a huge financial and lifestyle opportunity. Don’t let inertia get in the way of taking full advantage of it.

I have come across so many people who never take action because they suffer paralysis by analysis. They have so many ‘what if’ that hold them back. In the end they fall back into their comfort zones.

Take action today! Make the first step to explore your various options.

Consider how your property assets fit your overall portfolio and think long term (15 or 20 years) rather than just in the present.

You can make an appointment with me for a free consultation via Zoom using the calendar below.

“If you opt for a safe life, you will never know what it's like to win.”

Richard Branson (Screw It, Let's Do It: Lessons in Life)

Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.

Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.

Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker.

Subscribe to receive updated practical property investment insights, property reports and good investment deals

The post 4 Options After HDB Flat Reaches Minimum Occupation Period (MOP) appeared first on Holland Property.

What Should You Buy For Your First Home?

hollandproperty — Mon, 11 Sep 2023 17:22:00 +0000

What Should You Buy For Your First Home?

Singapore has one of the highest home ownership rates globally, standing at more than 90 per cent of its population.

Every Singaporean aspires to own their own home, be it newlywed couples buying their marital home or singles their bachelor pad. Others purchase for retirement and investment.

Since buying a property is possibly the most significant investment of our lives, it requires much thought and proper financial planning.

Take, for instance, Jonathan and Judy. Both of them just returned from overseas after spending several years pursuing their education and acquiring some work experience. They decided to come back to Singapore, get married and start a new home.

Inevitably, one of the most immediate needs is to sort out their housing needs. They could have stayed with their parents but felt that it would be ideal to have their own private space as a newlywed couple.

So what are their choices based on their needs and budget?

Option 1: Build-to-Order (BTO) HDB Flat

BTO flat is, by default, the number one choice of many Singaporeans.

Buying a BTO flat has many advantages.

Since heavily subsidised by the government, they are cheaper than resale flats. This means it will likely enjoy capital appreciation potential. Those who are lucky enough to secure a BTO flat is akin to striking a lottery. At the end of the five-year minimum occupation period (MOP), many would sell their flats for a tidy profit. It is not uncommon to enjoy 30 per cent gain or more.

My clients, Ali and Fatimah (not their real names), paid $240,000 for their 3-room BTO flat in Marsiling. After staying for five years, they sold it for $320,000. That translated to a 33.3 per cent gain!

Most home buyers prefer BTO flats to resale flats also because they come with a fresh 99-year lease, attractive design, aesthetic appeal and modern amenities.

The inclusion of flooring and wall tiles in some parts of the flat helps to save some renovation costs. Furthermore, if you opt for the Optional Component Scheme (OCS), you can enjoy more savings since the additional cost is part of the total flat price.

During the recent National Day Rally, PM Lee Hsien Loong unveiled a future change in public housing policies to reduce the ‘lottery effect,’ especially in prime locations.

With the next change which will be implemented from the second half of 2024, BTO flats will be categorised into Standard, Plus and Prime flat types.

The Plus type BTO flats are those in choice locations, and the Prime type in the choicest and most central locations.

These two types of flats are the most sought-after because of their resale values upon meeting the Minimum Occupation Period (M.O.P.).

However, the MOP period for these flats will be increased from 5 years to 10 years.

Furthermore, when selling on the open market, the government will claw back the subsidies given for the flats.

For the Prime type, other conditions include an income ceiling and 10-year MOP for the buyers of such resale flats.

With these changes, it might no longer be attractive to those who intend to buy BTO flats with the intention of reaping a huge profit when selling on the open market.

10 years is a long time to wait.

Having the subsidies clawed back by the government will eat into any potential profit.

And it will be harder to find buyers who need to meet the income ceiling because their buying power will be capped.

If you are buying a BTO flat with the pure intention of long-term staying, then it will be a good option.

Lowest price among all options.
Heavily Subsidised.
Brand New flats with the modern amenities and common spaces.
Fresh 99 years lease.
Capital appreciation potential is the highest among HDB flats, at least for the time being.
Minimal renovation required.

4 – 5+ years waiting period.
Coupled with the 5 to 10 years MOP period upon taking over the home, the opportunity cost is very high.
Smaller sizes than older resale flats.
Limited supply.
Luck of draw.

Option 2: Sale of Balanced Flats (SBF)

If you die die must own a brand new flat but miss out during BTO flat launches, you can try your luck at Sale of Balanced Flats.

HDB SBF launches occur twice a year, usually in May and November. These are unsold flats or flats given up by successful applicants from previous BTO launches, which may have already completed or still under construction.

These flats pooled together by HDB, can be found both in mature and non-mature estates.

In May 2021, HDB launched 2,494 SBF in mature and non-mature estates such as Jurong East, Yishun, Marine Parade, Queenstown and Clementi. About 28 per cent of them are ready to move in, while the rest are still under construction.

A friend of mine was fortunate enough to secure a 4-room flat at Clementi NorthArc. The mid-floor 93 sqm flat costs $536,000, though more expensive than the original BTO price but cheaper than a resale flat. Recent transactions of MOP resale flats in the same estate are more than $800,000. Even 15-year-old 4-room resale flats in Clementi are above $700,000.

One main advantage of SBF is the shorter waiting time compared to BTO flats since they are ready for moving in or are under construction.

Whilst there may be choices of estates to choose from, the number of units is limited. And usually, the level and facing are less than ideal.

Do take note ethnic integration policy applies to SBF.

Brand New flats with short or no waiting period.
Cheaper than resale flats though higher than BTO flats
More options for locations

Limited choices of units
The level and facing of the balanced units generally not very good
Limited supply

Option 3: Resale HDB Flat

Since not everyone has the luxury of waiting for a BTO flat, there is a spike in demand for resale flats.

If you need to move into your new home FAST (about 3-4 months vs 3-5 years for BTO flats), you should consider a resale flat.

While resale flats may not be as ‘profitable’ as a BTO flat, the government gives generous housing grants to eligible buyers, making it an attractive proposition.

As of Feb 2023, the grants have increased from $50,000 to $80,000 for 2 to 4-room flats for first-timers (families), and from $40,000 to $50,000 for 5-room or larger flats.

Furthermore, those who are eligible can enjoy up to another $80,000 Enhanced CPF Housing Grant (EHG) and $30,000 Proximity Housing Grant (PHG).

With BTO flat prices hitting above $600,000, the housing grants for resale flats help narrow the price gaps.

The key difference is resale flats do not come with a fresh 99-year lease.

Read: What Is Driving The Red-Hot HDB Resale Market

On the other hand, resale flats appeal to those who want to live near their parents or preferred primary school for their children. They can afford to pick and choose the unit in terms of location, level, facing and condition. If you want massive space, you can even look for jumbo flats or executive flats that HDB has stopped building.

On the flip side, resale flats have an issue with lease decay, especially with older flats. If they are more than 40 years old, there may be a cap on the usage of CPF.

As opposed to a BTO flat, you only have to wait for the five-year MOP before you can sell and upgrade.

Ready to move in within 3-4 months.
You can choose the location, size, level, facing, etc.
Unit sizes may be much larger.

Slimmer chance of capital appreciation.
Will be subjected to CPF usage and loan restrictions if the remaining tenure of the flat and the age of the buyer is less than 95 years.
Concern about lease decay.
Dated design, amenities and common areas.
Usually requires more renovation.

A couple can opt to buy an HDB flat using one name as owner and another as ‘essential occupier’. Upon fulfilling the five-year MOP, the couple can choose to keep the HDB flat, and the ‘essential occupier’ can buy a private property for own stay or investment. However, the catch is that both husband and wife must be able to bear each of their respective housing loans.

Option 4: Brand New Executive Condo (EC)

Like BTO flats, Executive Condos (EC) are subsidised by the government. While they look exactly like any private condo built by private developers with a full suite of condo facilities, the eligibility criteria are set by HDB.

Because they are subsidised, the capital appreciation potential is high.

Minimal renovations are required for a brand new EC, just like a private condo, unless you want to turn it into a palace.

If you meet the eligibility criteria and the prices match your budget, you should seriously consider a brand new EC.

So, is new EC for everyone?

When I was doing financial planning for some clients, I found out it is not feasible for many of them.

Part of the reason is that the prices of EC have risen considerably over the last few years. Current price level averages slightly above $1,300 psf.

As a result, new ECs are now smaller than older ones to bring down the quantum prices.

The main setback for potential buyers is the loan issue. Buyers of new EC are subject to Mortgage Servicing Ratio (MSR) instead of Total Debt Servicing Ratio (TDSR) as in private condo. With the same income, you can borrow twice as much for a private condo than an EC.

The double whammy is while you can take up to 90% for an HDB loan, the maximum Loan-To-Value (LTV) for EC is 75%. The 25% downpayment is very challenging for young couples since they have yet to accumulate sufficient savings and CPF.

Another disadvantage of buying an EC is that you are also bound by the five-year MOP before you can sell or lease out.

Condominium lifestyle facilities and security without the full price tag of a private condo
Enjoy first-mover advantage since you are buying at the lowest possible price.
Enjoy high capital appreciation potential upon MOP & privatisation.
Wide choice of units.
Longer lease tenure than resale since buying new.
Minimal renovation required since it comes with finishings
Latest designs and facilities.

3-4 years waiting period followed by five years of MOP before you can rent out or sell
Smaller in size compared to HDB flats and older ECs.
Subject to MSR so less affordable than resale ECs.
Maximum Loan-To-Value (LTV) is 75%.
Can only take bank loans with no 90% loans available from HDB, thus a higher initial downpayment.

Option 5: Resale Executive Condo (EC)

Like buying a resale HDB flat, a resale EC gives you the benefit of choices on the secondary market. And there is no need to wait for years for the construction period.

A resale EC is actually more affordable than a brand new one despite the higher price. This is because your loan now comes under TDSR instead of MSR. You can borrow twice as much with the same income.

Let’s zoom into the cluster of EC and private condos at Pasir Ris Drive 3 to make a bit of comparison:

Watercolours (EC TOP 2014)
Sea Horizon (EC TOP 2016)
Seastrand (Condo TOP 2014)
Ripple Bay (Condo TOP 2015)
Sea Esta (Condo TOP 2015)

Resale EC Watercolours and Sea Horizon are between $1,134 to $1,252psf. The other three resale condos average between $1,206 to 1,325psf. So the price difference between resale EC and condos is quite minimal though slightly lower.

By looking purely at the price level, if all other factors are equal, it may make sense to have a small saving to buy a resale EC. It still boils down to the preferred project and unit. The only factor is you can’t sell the resale EC to foreigners till it reaches the 10-year mark.

Ready to move in within 3-4 months.
No MOP, so can rent out immediately.
May have upside potential upon privatisation at the 10th year mark.
Good length of remaining tenure.
More choices in terms of location, level, size, facing and conditions.
Subject to TDSR instead of MSR, hence higher affordability than brand new ECs

Units usually require some renovations.
Bank loans only. No 90% loans available from HDB, thus a higher initial downpayment.
Usually less profitable long run compared to brand new EC.
Lesser tenure than brand new.
Maximum Loan-To-Value (LTV) is 75%.

Did you know you can borrow twice as much to buy a condo/resale EC than buying an HDB/new EC?

Mortgage Servicing Ratio (MSR) applies to loans for HDB (new and resale) and new EC, whereas Total Debt Servicing Ratio (TDSR) applies to resale EC and private condos.

Under MSR, you can only use up to only 30 per cent of your gross monthly income to service your mortgage loan. On the other hand, under TSDR, the cap is 60 per cent of your total debt commitments, including mortgage loan, car loan, and credit card instalments.

So if you and your spouse are both 30 years old with a total household monthly income of $8,000 (assuming no other debt commitments), based on a 30-year loan tenure, you can borrow up to:

$534,466 to buy an HDB or new EC
$1,068,935 to buy a condo or resale EC

Option 6: New Condos

There are a lot more choices when it comes to buying a private condo than EC. Locations are usually better in terms of proximity to amenities and MRT.

One main advantage of private condos over HDB and new EC is that it is not subjected to the five-year MOP. That means you can rent it out immediately when completed or sell it (subject to Seller Stamp Duty if you sell within three years). So this works best for investors.

Private condo prices are higher than HDB flats and EC. However, you can take a bigger loan, thus making it more affordable.

If you are buying your first home, new launches mean you will have to wait for TOP. Typically, the construction can be anything between three to five years.

For those upgrading from an HDB to a private condo under construction generally means you will have to sell first.

You will have a rent a place for either case or find a temporary home during the interim period.

Read: 6 Reasons Why New Launch Is A Better Investment Property Than Resale

Higher capital appreciation potential because of first-mover advantage
Not subjected to MOP.
Widest choice of locations.
Plenty of unit choices for new launches. Can choose the layout, level and facing you like.
Usually higher quality finishings and nicer facilities.
Save on renovation costs.
Enjoy one-year defect warranty.
Eligible for a higher amount of loans since Total Debt Servicing Ratio (TDSR) applies, as opposed to Mortgage Servicing Ratio (MSR).
Lower price quantum because new condos are smaller, thus more affordable.
Progressive payment scheme helps to migitate the current high interest rates.

Highest price tag compared to HDB and EC.
New condos are usually smaller than older condos.
Need to wait 3 to 5 years of construction period.
HDB upgraders need to sell their flats first to avoid paying ABSD.

Option 7: Resale Private Condo

Buying a new condo under construction is not always feasible when you need to move in immediately.

If space is a priority for you, older condos are more spacious. The average size of a three-bedder used to be about 1,200 sf. These days, it’s less than 1,000 sf, and with more unusable space.

For HDB upgraders, buying a resale condo can be a seamless process with proper timeline planning.

The downside of resale condos, especially for older ones in their original conditions, is the cost of renovations.

Maintenance costs can also be higher with more going towards repairs and sinking funds. Over time, you will have to deal more with pipe leakages, fixtures deteriorating, ceiling concrete spalling, ageing air-conditioners in need of replacements, etc.

If the resale condo tenure is leasehold and is more than 15 years old, the chance of capital appreciation is slimmer. But on the other hand, some very old condos in excellent locations may have high enbloc potential.

Not subject to MOP.
Widest choice of locations.
Eligible for a higher amount of loans since Total Debt Servicing Ratio (TDSR) applies, as opposed to Mortgage Servicing Ratio (MSR).
Usually larger in sizes than new condos

Less choice of units in the condo you are interested in. May not have the level and facing you want.
Usually requires some renovations.
Possible issue of lease decay for older 99-year leasehold condos.
Might be subjected to CPF usage and loan restrictions.
Dated design, facilities and common areas.
Higher cost of maintenance and repairs.
Higher price quantum because of bigger sizes.

Factors in Determining Your Choice

There is no right or wrong in any of these choices because everyone’s needs and budgets are different.

What are some of the factors that will affect your final decision?

Affordability

It is prudent to buy within your means.

Start where you are, with what you have.

Have enough reserves that can last you at least six months, or better still, 12 months, in case the unforeseen happens.

Needs

Your needs based on your priorities could be space, number of rooms, workspace for work from home, convenience, facilities, etc.

With your budget, find the type of housing that matches your needs best.

Urgency of Moving In

How soon you need to move into your first home will largely determine your housing choice.

Obviously, if time is not on your side, you will have to take BTO flats, new EC and new condos that are under construction off your list.

If you are in no hurry to move in and would like to see a higher capital appreciation potential, then brand new HDB, EC or condos would be the better choice.

Location

A few factors can affect your preferred location:

Distance and convenience of travel to your workplace
Proximity to your parents or in-laws
Proximity to your children’s schools
Personal preference: lifestyle, amenities, near sea, near nature, etc

Investment Returns Potential

Different housing choices have different investment returns potential. Since most of us are unlikely to stay in the same house forever, we would like to see our property value appreciates when we are ready to sell.

If you would like to know how the various types of housings perform in the last ten years, drop me a note.

Feel free to contact me for a non-obligatory discussion should you need help in your purchase of your first property.

Danny Han is a licensed property agent since 2005.

What Danny is passionate about is not just about showing clients properties around Holland Village, but also enjoys sharing anecdotes and nuggets of information that are part of his growing up years.

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The post What Should You Buy For Your First Home? appeared first on Holland Property.

Timeline Planning for Upgrading from HDB to Private Condo

hollandproperty — Mon, 11 Sep 2023 16:06:14 +0000

Timeline Planning for Upgrading from HDB to Private Condo

To upgrade from an HDB to a private condo is one step away from fulfilling the Singaporean dream. This upward mobility is a natural progression for an affluent nation like ours, where many aspire to enjoy not just homeownership but a lifestyle.

Have you taken the first step by assessing your financial status?

So with the financial planning done for upgrading from HDB to private condo, what’s next?

The next step is to do a timeline planning for upgrading from HDB to private condo.

(Please read: “Financial Guide to Upgrading from HDB to Private Condo”).

Before you start shopping around for your dreamed condo, you have to consider these options:

Keep your HDB flat and buy condo
Buy condo first then sell your HDB flat
Sell your HDB flat first then buy condo
Sell your HDB flat and buy condo concurrently

The other question is, should you buy resale or new launch? (Read my article on “Investment Property: 6 Reasons Why New Launch is Better Than Resale”)

Option 1: Keep HDB Flat and Buy Condo

Own two properties with one for rental income (can be HDB or condo)
No need to worry about timeline since there is no need to move out of your current HDB flat

Have to pay 20% ABSD
Can’t do decoupling for HDB flat
HDB flat likely to depreciate over time
Need high capital outlay for condo purchase
If you have an outstanding HDB loan, you can only take 45% loan for condo purchase

If you have fulfilled your five years Minimum Occupation Period (MOP), you are allowed to keep your HDB flat and buy a condo. You can choose to continue staying in your HDB flat or move into your new condo.

Maybe you are thinking, why not keep your HDB and rent it out since the rental yield is very attractive? Then with the rental income, you can use it to finance your new purchase. Sounds very logical?

But do take a step back and consider the disadvantages.

Firstly, since the new purchase will be your second property (HDB doesn’t allow part-sale or commonly known as ‘decoupling’), you would need to pay an Additional Buyer Stamp Duty (ABSD) of 20%. Yes, no kidding! 20% is a lot of money.

Many people loathe the thought of throwing away this considerable sum of money.

If you were to buy a $1.2 million condo, a 20% ABSD amounts to $240,000. Suppose you rent out your flat at $3,500 a month or $42,000 a year, the $240,000 ABSD will set you back by 5.71 years in rent.

Oh no! It’s like going through another round of M.O.P.!

Your HDB flat will likely depreciate over time, especially for older flats with the concern over tenure decay.

Not only that, but you would also need to fully clear your HDB loan to enjoy the maximum 75% loan for your condo purchase. Otherwise, you can only borrow 45%.

HDB prices might have gone up since Covid-19, the trend may not last indefinitely. The spike in prices is the mainly due to a shortage of supplies on the market caused by the pandemic. BTO flats were delayed. Cost of labour and materials went up. More buyers turned to resale flats instead of waiting for BTO flats. Furthermore, with more CPF grants, it makes resale flats more attractive than before.

To meet this shortage, HDB is ramping up more BTO flats to meet the demand. Construction time is also now shortened. Hence, we may see the current shortage situation stabilised over time.

On the other hand, private property prices have appreciated more than HDB prices in the last 10 years (see chart above).

Hence, to buy a $1.2 million condo without selling your HDB flat, you would need at least 25% (5% down + 20% ABSD) in cash, which is $300,000.

And if you don’t have enough CPF to cover the other 20% plus $38,600 Buyer Stamp Duty (BSD), you would need another $278,600 of cash.

This upfront capital outlay makes it out of reach for many people.

Option 2: Buy Condo First Then Sell HDB

Can carefully choose the right property
Have the time to renovate and move into the new house

Has to pay ABSD first but can claim back if new purchase is a matrimonial home (i.e. buy under husband and wife’s names) and sell the HDB flat within six months. This upfront financial commitment may present some cashflow problem.
If you still have outstanding HDB loan, the maximum amount you can borrow is 45%, so you would need more capital outlay to buy a condo.

If you choose to buy condo first then sell your HDB, the disadvantages are quite similar to the first option, namely there will be issues with ABSD and loan. The initial capital outlay is very high.

However, though you have to pay the ABSD first, if you can sell your HDB flat within six months, you can apply for remission and get back the money. This remission only applies to the matrimonial home; that is, the property must be in both husband and wife’s names. For singles, widows/widowers and divorcees, there is no remission.

On a positive note, with this option, you can shop around for your dream home without any pressure. In this way, you are more likely to make a good decision.

Option 3: Sell HDB First Then Buy Condo

No ABSD
Can take time to find the ideal home
No cash flow problem
Sell HDB at a higher price NOW than a lower price LATER

May need to find temporary accommodation after selling your flat eg. renting
Cost of renting a place during the interim period

The biggest advantage of selling your HDB first is not having to pay ABSD, thus easing your cash commitment. Plus, with the sales proceeds from the HDB, it will reduce your cash flow when paying for the new purchase.

If you are selling your HDB flat to buy a new condo launch, you will need to find a temporary place to stay before T.O.P.

If you have to rent during the interim period, you will need to factor in the cost of rental. With current rental at an all time high, this could be a deterrent. It would be ideal if you can stay short-term with your parents or relatives.

It’s also wise to book a new condo during launch to enjoy early bird discounts and first mover advantage. So, selling your flat first will free you from the time constraint to buy a new condo.

Some do not like the idea of having to move twice and having to rent for say, two to three years before the new place is ready.

However, it is wise to book a new condo during launch to enjoy early bird discounts and first mover advantage. So, selling your flat first will free you from the time constraint to buy a new condo.

Option 4: Sell Your HDB Flat And Buy A Condo Concurrently

Time to find the ideal house
Have time to renovate
No need to arrange for temporary accommodation
No ABSD if planned well

Need to have sufficient cash to pay 5% cash and Buyer Stamp Duty
Need proper timeline planning
The buyer for your flat may not be willing to grant you an extension of stay

The idea for this course of action is to time the selling and buying such that:

After the buyer for your HDB flat exercises his option to purchase, you can commit to your condo purchase. Theoretically, your buyer can’t back up after exercising OTP, so you are quite safe. But to be even safer, you wait till HDB acceptance after submitting the resale application. This is because there are cases when the buyer can’t go ahead with the purchase for various reasons.
You exercise your OTP after your buyer to avoid having to pay ABSD
Completion of your HDB sale comes before the completion of your purchase so that the sales proceeds can help to pay for the purchase. If this is not possible, you would need to apply for a bridging loan. If you need to use the CPF from the sales proceeds for the purchase, do note it takes about two weeks before the money is credited into your CPF account.

Since the HDB completion occurs before the completion of your private condo, you need your buyer to grant you an extension of stay. Again, you need to express this intention up front before you accept his offer.

To facilitate a seamless move from your HDB flat to your condo takes careful planning to execute, so be sure you seek the help of an experienced agent.

Are you still confused? Are you lost in the jungle? Still not sure which option to take? Fret not because I am here to help you.

Everyone’s situation is different. Contact me for a non-obligatory discussion and I can help you devise a bespoke plan to realise your upgrading goal from HDB to private condo.

Go to my facebook page and like my page so that you can be notified of my upcoming article on how to choose the right condo.

Need an opinion on your property investment plans? Want to know the value of your property? Or need help to sell or rent out your property?

Get a 1-time free 30 min Property Wealth Planning consultation. Schedule one right now by using the calendar below .

A PWP consultation includes:

An in-depth financial affordability assessment
Highly relevant investment insights
A clear and customised investment road map for your real estate investment journey ahead.

Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.

Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.

Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker.

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The post Timeline Planning for Upgrading from HDB to Private Condo appeared first on Holland Property.

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New Launch vs Resale Condos In 2024: Which To Buy?

New Launch vs Resale Condos In 2024: Which To Buy?

New Launch Condo Prices In 2024

New Launch Condos in CCR

New Launch Condos in RCR

New Launch Condos in OCR

Do You Notice A Common Factor In All Three Regions?

Resale Condo Prices in 2024

Resale Condo Prices In CCR

Resale Condo Prices in RCR

Resale Condo Prices in OCR

What’s Happening In The CCR?

Harmonisation of Gross Floor Area

Conclusions On New Launch vs Resale Condos in 2024

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Is It Still Worth Buying A Freehold Property For Retirement?

Is It Still Worth Buying A Freehold Property For Retirement?

Why is it so hard to give a definite answer on whether freehold is better?

Case Study: Leedon 2 vs The Merasaga

So how can we determine if a freehold property is really good for retirement?

But let’s put the property lifespan aside, and look at rental income

Finally, we should consider that long-term changes to the area could trump your freehold value

A private property is a great retirement asset, but it may not be necessary to make it a freehold

Simply put, find a well-located and well-priced condo for your retirement asset; whether or not its freehold is a secondary concern

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Is It Still Worth Upgrading To A Condo In 2024?

Is It Still Worth Upgrading To A Condo In 2024?

Can I Afford To Upgrade from an HDB To A Condo In 2024?

Cost for upgrading from an HDB to a resale condo:

Cost for upgrading from an HDB to a new launch condo:

Is upgrading from HDB to condo worth the cost?

1. Your ability to cope with the higher interest rates going forward

2. The role that the condo will play in your retirement

3. For younger buyers, potential delays in right-sizing

4. Whether you see value in cash-out refinancing as an option

5. The condo as a “safety margin”

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How Your Property Can Still Provide For Retirement In 2023 And Beyond

How Your Property Can Still Provide For Retirement In 2023 And Beyond

HDB flats as a retirement asset?

HDB resale flats

BTO flats new classifications: implications for HDB flats as a retirement asset

This being said, the momentum in the resale flat market is likely unsustainable

Implications regarding resale flats as retirement assets

1. Plus and Prime flats show a repositioning toward ageing-in-place

2. Increased supply could moderate long-term appreciation

Private condo as retirement asset

New launch condos

Resale condos

Implications of condo units for retirement planning

1. Due to higher costs, it becomes ideal to upgrade before the age of 40, when financing restrictions start to bite

2. There may be more impetus to upgrade if possible, as flats become less investment-oriented

3. En-bloc sales have become less reliable as an exit strategy

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PINETREE HILL

PINETREE HILL

Project Details of Pinetree Hill

Likes and Dislikes

Facilities

Orientations and Views

Pricing

Is the pricing attractive for investors?

Sizes of the smaller units are too big

Prices of 4-bedders

Potential

Who then should buy Pinetree Hill?

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LEEDON GREEN (Former Tulip Garden): Review

LAST 9 UNITS! 1+STUDY (8 UNITS) / 3BR (1 UNIT)

LEEDON GREEN (Former Tulip Garden): Review

Key Points To Note About Leedon Green

My Ratings on Leedon Green

Pluses of Leedon Green

Minuses of Leedon Green

LAST UNIT: 2BR 753SF $2.266M
Can view actual unit