facebookIs buying HDB a good first choice for new buyer? At the end of the day we return the flat to the govt.. Makes no financial sense to me - Seedly

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Anonymous

18 Apr 2019

Events

Is buying HDB a good first choice for new buyer? At the end of the day we return the flat to the govt.. Makes no financial sense to me

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What are your thoughts?

Jim Tay

Jim Tay

05 Mar 2019

Level 3·Director at Jimtay.com

Hey!

Whether a HDB is a good first choice for a new buyer is a question of affordability.

You are right that at the end of the day you return it to the govt.

However, because of the generally lower quantum compared to private properties, it is usually where first time buyers start their real estate asset journey.

If you can afford a private property right away as a new buyer, why not? Less restrictions and greater investment potential.

Cheers.

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Zuhdy Farhan

Zuhdy Farhan

03 Mar 2019

Level 4·Real Estate at National University of Singapore

HDB - Resale, or BTO?

A Resale flat makes less financial sense, especially older ones,

  1. because it is generally more expensive

  2. because it may already start to depreciate

  3. you're absolutely right, it will be returned back to the government

However, if you are looking to at least make a profit from staying in a HDB flat, a BTO would make more financial sense because of the potential capital appreciation after 5 years MOP period. Owners in Buangkok Vale easily make over 100K in profits, for example.

Of course, at the end of the day, it makes sense to upgrade to a condo because of land ownership rights, which in turn lead to possible en bloc in future. In this case, you are not returning the land to developers, but selling it to them. And as seen for the past 2 years, sellers aim to reap high profits.

With that being said, if a condo does not go en bloc (which has not really happened before), it will also go back to the government after the end of its lease, just like a HDB.

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Hey there!

Yes definitely you should buy HDB! U can use it as an investment. Imagine you purchase ...

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