facebookWhat would your advice be? Wife and I are discussing and appreciate inputs 1) Downsize to HDB and grow CPF, 2) Sell the existing condo and buy a condo under each of our names or 3) Remain status quo? ? - Seedly

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Anonymous

07 Jun 2019

Property

What would your advice be? Wife and I are discussing and appreciate inputs 1) Downsize to HDB and grow CPF, 2) Sell the existing condo and buy a condo under each of our names or 3) Remain status quo? ?

What are possible gains and risks in each option? Wife and I are in our early 40s, have a teenage son, combined income of $15k. Each of us has CPF OA $230k, SA: $180k. There’s a $700k outstanding loan on the condo (bought new in 2012), which we use our CPF OA to pay for monthly.

AMA 1M65

Discussion (6)

What are your thoughts?

Loo Cheng Chuan

Loo Cheng Chuan

07 Jun 2019

Level 9·Founder at 1M65 Movement

  • I cannot tell you what you should do but here is my advice. I am not a big believer of property as a good investment vehicle.
  • The 2 reasons for property prices to rise are Population Growth and Economic Growth. At the moment, none of these are growing in Singapore right now, hence I will not invest much into property right now and for many years to come.
  • That said, I make sure that I am not overleveraged on my property purchase and it is not stretched beyond my purchasing power. On that note, I have always lived in HDB and I am very comfortable in it.
  • I will be skeptical of using property as a tool for retirement because it does not necessary grow well and there is a lot of property risks involved.
  • It is also my view that Government being very careful about property bubbles being formed and regularly step in to prick little bubbles that brew in the property market.

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Option 1 might not be feasible. You can only buy a resale HDB, but that you'll have to sell your condo within 6months. To buy a new HDB (or executive condo) you'll need a waiting period of 30months after selling your private property before able to buy. Even after that your income levels are too high.

I might want to ask what would be your goal here?

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