My fiancé and I have a combined income of more than $14k per month. Do you think we shall go for resale HDB or resale condo for own stay as first timer? Why? - Seedly
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Anonymous

Asked on 22 May 2019

My fiancé and I have a combined income of more than $14k per month. Do you think we shall go for resale HDB or resale condo for own stay as first timer? Why?

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HC Tang
HC Tang, Financial Enthusiast, Budgeting at The Society
Level 9. God of Wisdom
Updated on 07 Jun 2019

Since your combine inome of 14k monthly doesn't entitle to BTO nor Housing grant for Resale HDB, in the current market where condo price is still on decresing trend, see URA 2019 Q1 private property index: https://www.ura.gov.sg/Corporate/Media-Room/Media-Releases/pr19-16 It is still lower than previously, you should consider getting condo.

Few reason for doing so:

  1. Your combine income is way above any BTO or resell grant for HDB.

  2. If you opt for HDB, you have to stay for 5 years to fulfill the MOP (minimum occupation period) before you can rent out the whole unit or sell or buy a private condo. With Condo, you are free without these restrictions.

  3. If you are a Singaporean PR, there is no way you can buy a private property while keeping your HDB flat. You will have to sell your flat within 6 months of acquiring your private property.

  4. There's also ABSD ( Additonal buyer stamp duty) on the purchase price or market value if you were to get a HDB then only condo. It is 12% for Singapore citizen: https://www.iras.gov.sg/irashome/Other-Taxes/Stamp-Duty-for-Property/Working-out-your-Stamp-Duty/Buying-or-Acquiring-Property/What-is-the-Duty-that-I-Need-to-Pay-as-a-Buyer-or-Transferee-of-Residential-Property/Additional-Buyer-s-Stamp-Duty--ABSD-/

  5. Finally, at the lower condo buy in time such as now, it is suitable to get a condo for own stays over resell HDB. Not only for own accomodations, but also for some wealth building as private condo has higher percentage of increase in market value than HDB , which is rather stable (market price don't rise or fall much). If you happen to hit a Enbloc, consolidated sale might earns you much more wealth.

TIps: Some points to consider, to find out especially on the loan available or prepare before getting your first condo:

https://www.99.co/blog/singapore/9-milestones-buy-first-condominium/

Congratulations for getting your first house! And it's a Condo! Wow! :)

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The key factors to consider is not so much your income but

1) Amount of Savings

This determines your financial position in case of uncertainties. Real Estate is a long term investment so you have to be prepared for the long haul.

While Condo is a better investment in general, $14K a month is still within the stretching range. Many agents will say its ok, but its really still taking a bit of risk unless you have enough savings.

2) Your daily activities

Similar to the top point, the location of your house affects how much you spend in travelling and eating, etc.

For example if you work in town, it might be better to buy a HDB in town than buying a condo in woodlands just because of the additional travelling cost.

3) Your own personal needs

Someone I am helping out today wants to sell his HDB to buy a condo in Novena. While financially it is a good decision, he will go from a 4 bdrm around 1000++ sqft to a 2bdrm that is only 600sqft.

And this is really too small for his two boys + 1 maid.

In summary, buying to stay should not be just a finanical decision but one where you have to balance between your quality of living vs potential financial gains.

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