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Nicholas Woon

Gets loads of kick in helping people solving their real estate issues!

Nicholas Woon

Marketing Director at ERA Realty Network Pte Ltd

31Upvotes

About

Gets loads of kick in helping people solving their real estate issues!

Credentials

Marketing Director at ERA Realty Network Pte Ltd

Economics at National University of Singapore

Nicholas Woon

Marketing Director at ERA Realty Network Pte Ltd

31Upvotes
  • Answers (20)
  • Questions (0)
  • Reviews (0)

Salary

HDB BTO

Policies

CPF

Property

I would think for BTO, you are in a very safe position! Your house value would definitely appreciate in value whether you sell within 5 years or if you decide to hold longer. On average, people make between $100K to $200K in cash proceeds (after deducting outstanding loans and CPF utilized and accrued interest) even if they utilize CPF to pay for the mortgage. If you are not thinking of selling your BTO, you can consider using CPF to finance and your girlfriend to use cash to finance the mortgage. In this case, you can make your money work harder to reap the 5% interest while she can enjoy the CPF interest (which is higher than 2%)

Condominium

Career

Property

On average, BTO owners get to pocket $100-150K in cash proceeds after the sale. This helps in the 25% downpayment for the purchase of the condo. If the household income is about $8k monthly and above, you would be able to upgrade quite comfortably. Assuming 35 years old and $4k income per person (5 years later), you and your spouse can loan up to $1 mil (no other outstanding loans) with the current 75% LTV. Hope this clarifies!

CPF

Investments

Resale HDB

HDB BTO

Property

Hi! As you pointed out correctly, your sales proceeds might be eroded away since the HDB resale prices have been stagnant/slightly decreasing since 2013. Hence, selling once you reach MOP is a good strategy to capitalize the profit. If you are at a mature estate and near MRT, there might be more value/potential in keeping your unit. If your unit is at a non-mature estate, there is more competition in the newer BTOs. With that said, I would recommend investment property with a condo rather than HDB due to better tenant profile for the former in general. Assuming your HDB can fetch about $5xxK in the resale market, with the same amount of money (or a slight top up), you would be able to purchase a 1 bedroom condo. For HDB, tenants usually maximize the quota for number of occupiers (ie. 4-6). With a 1 bedroom, you would expect at most 2 people staying at the unit. The amount of damage/wear & tear at the property between the 2 would be very different during the lease. Althought HDB has an unbeatable rental yield, there is intangible cost that cannot be neglected. Hence, I would recommend selling your HDB and buying a condo as an investment property. P.S. I would recommend buying a 2BR for investment rather than 1BR in today’s market because it is much easier to sell the former due to ABSD. Then again, this is a discussion for another day! Edited It is easier to sell a 2BR in the future as compared with a 1BR because 1BR owners are usually investors while 2BR have a fair share of both homeowners and investors. From experience, many HDB upgraders would not consider 1BR as it is not big enough for their family, so they would only have their eyes set on 2BR and above. On the other hand, there are lesser investors in the market now that would buy 1BR due to the steep ABSD. Nowadays, most of them would have a long term plan where they would rent out for the first 10 years and perhaps let their children/themselves stay at the condo after if they decide not to continue renting. Hence, 1BR is less ideal and most people who prefer 2BR if they have the budget.

Property

Family

HDB BTO

EC Condominium

BTO! it is cheaper and the capital appreciation potential (in absolute terms) is about the same at 5 years mark! If you manage to get a BTO near MRT, that would be a bonus!

Condominium

EC Condominium

Investments

Property

Usually condos with maintenance fees of $1000 and more comes with a private lift in the unit and quite a fair bit goes into maintenance of the lift as well! Luxury condos are definitely worth it in the long run. Quite a huge percentage are owned by foreigners (if they need to pay 20% ABSD, they would rather own a more prestigious one) as they diversify their portfolio and they want to own prime locations in Singapore. As long as you time your exit, there is a huge resale value for D9 luxury properties in Singapore.

Investments

Property

The resale value of MOP HDB goes down in general if you choose to delay the sale of your HDB. The best time to take profit is once your HDB reaches MOP. Since you’d be selling your HDB, then you’d be considered first timer for private properties and do not need to pay ABSD. There is much more capital appreciation potential for you as compared with people who pay ABSD for the property. Having said that, I would diversify the cash proceed from the sale of your BTO into other asset classes like stocks as well. In the long run, the capital appreciation potential of a private condo would be more substantial than your current BTO.

Condominium

Resale HDB

HDB BTO

Property

I would go for condo! Price of resale HDB is stagnant and somewhat on a downward trend. It doesnt look like it will increase anytime soon with the huge supply of BTOs. Condo has much more room for capital appreciation!

General

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Salary

Savings

Condominium

Property

Hi, I don‘t encourage it as the rental would take up at least half of your take home pay. If you’re a Singaporean, then I would advise you to save for your house! Of course, if there are other reasons that you choose to rent a house, rent is quite affordable now. So it wouldn’t be a wrong time to rent as well!

Property

Hi, the recent changes in the Loan-To-Value ratio was from 80% loan to 75% loan and it only applies to bank loans. This means that if you intend to buy a HDB using HDB loan, you can still loan up to 90% at 2.6% interest. As Kenichi correctly pointed out, your age matters a lot in the computation of the loan amount. HDB Loan Since the loan tenure is at 25 years, the amount of loan is the same until age 40. Monthly Income: $4,000 MSR (30%): $1,200 90% Loan: $239,000 Max Property Price: $265,000 based on 90% loan Bank Loan (purchasing HDB) For this case, I assume you intend to loan for 25 years at 75% loan of the property price. Since the loan tenure is at 25 years, the amount of loan is the same until age 40. Monthly Income: $4,000 MSR (30%): $1,200 75% Loan: $239,000 Max Property Price: $318,000 based on 75% loan Bank Loan (purchasing private property) For private properties, the max loan tenure is 30 years or age 65 whichever earlier. Since max loan tenure is at 30 years, the amount of loan is the same until age 35. Monthly Income: $4,000 75% Loan: $534,000 Max Property Price: $712,000 based on 75% loan
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