Property advice needed

crux

New Member
My spouse & I can sell our hdb flat for about $700k, profit is about $400k. We have ready buyers and the flat's valuation is high too.

We are contemplating whether or not to sell and upgrade to a private property so that the kids can enjoy the pool while we use the gym. We have worked out our finances and are comfortable with the loan size & monthly instalment. However, we are unsure if it is a wise thing to sell high & buy high. We considered renting for a period of time after selling our flat but there's no guarantee that prices will come down and if so, when?

We also considered keeping the flat and renting it out in the future as the rental yields are rather attractive too due to the good location of the flat. This would mean buying a second property later, not now. However, will the flat's value drop over the years as it ages? Should we seize the opportunity now and cash in?

I'd appreciate if some of you can share your views & advice. Thanks!
 


clipperjunk

New Member
if you buy based on your needs, and if finances allow, all else is secondary.....if you try to time the market, it'll be a never ending process..
 

nichie

Member
Sell and buy EC...EC has condo facilities but cheaper than pte condo...recently there is a EC at pasir ris develop by NTUC Home is selling at I think $650psf...cheap compared to pte condo selling at $800 to 1000psf...although there is a min 5 years staying rule but even if you buy pte pty now there is this penalty if you sell within 4 years...first year is as high as 16%...or you can rent out your HDB and buy pte condo..this is a previlege pte condo owner don't hv...once you give up your HDB and buy pte condo, you will not able to buy HDB flat anymore unless you give up your pte condo..if you buy for own stay and can afford the mortgage comfortably, then you should be ok...my bf's parent also invest in pty and according to them you can't time the market but you must have the holding power when the turn sour and location is very important..it will determine how easy you can rent out your unit and the type of tenant...they quite confident with sg market..as long as economy is gd..the price will maintain and appreciate...even its down it will bounce back again...singapore is only 700sqm...as long as we hv gd gov..growing economy..continue inflow of capital and foreigner..pty is a gd investment...but within your mean lah
 

nichie

Member
Oh one thing...HDB flat and EC is our entitlement as a citizen...don't miss it ok...but of course we still don't know those changes made or going to make by Mr Khaw will have effect on the market...raising the salary ceiling, building new flat like no tomorrow will some how effect resale price when more people go for new rather than resale...if ceiling raised for EC then some people not eligible might buy EC rather than pte...so hard to predict and time the market.
 

tomasulu

Member
If I were to buy high I'd want to sell high too. I think of it as offsetting the risk of buying with the selling. I wouldn't rent to wait for the next downturn - expensive bet and (for me) it involves too much hardship.

Personally I don't like ec. Typically it comes with low quality fittings, low ceiling, bad location and, pardon my prejudice, messy neighbors. Unless it's at a great location like the one at bishan then all is forgiven. Location location location, ignore at your own risk.
 

crux

New Member
Thanks for your comments & advice. I agree that it is difficult to time the market. Unless one has the holding power and finances to purchase more than one property.

EC is a good suggestion. However the locations of EC are usually at the far ends of the island which is quite a put off. Proximity to good schools is a consideration too as our kids are at the school-going age. Changing schools is another headache.

Yes, quite a pity to let go of our hdb and not being able to buy back one later once we own a private property. Yet, we wonder if we will miss the opportunity and like what you said too, we have a feeling that property prices for the mass market may start to drop soon. Sigh, what a dilemma!
 

crux

New Member
I strongly agree that location is key but good location comes with a price tag too.
happy.gif
 

tomasulu

Member
duh.

i'm saying paying the premium, or doing a trade off in favor of location is worth it. it is not just about making the best of your investment $. people often don't consider the utility their family will get staying in the location of their choice. yes singapore is small but some roads/hwys are much much more conjested than others. priority to good primary schools. proximity to grandparents. good eateries, parks, mrt, markets, malls, etc. these are difficult to quantify $-wise but will have a huge impact on your quality of life. buying a house for your own stay is unlike getting an investment property. the derived utility from your location of choice should form an important and integral part of your consideration.
 

clipperjunk

New Member
if you are looking to move into a pte condo, buy resale units now, they are bigger but at a discount from new ones. the next question would be whether to buy freehold or leasehold..it doesn't matter as long as the development is big as it could be redeveloped in the future, hence the possibility of you enjoying the windfall..
 

miloice

Well-Known Member
if its comfort and quality in life, I would recommend to go for the mature and bigger condos. Maintenance is more problematic but the floor area is huge, pools and facilities are more spacious. I see no point with the current trend for small condos with only a few units and limited facilities.
 

tomasulu

Member
Milo has a point. Most people don't make full use of their condo's facilities because the pool is small and the gym is poorly equipped. So if you are gonna pay for condo living, you might as well get one with facilities you'll use. I don't regret getting a house but I would love having a proper 50m pool at my door step.
 

crux

New Member
Yes I agree with Milo and Tomasulu. If we do decide to move into a condo, we are definitely going for larger developments (we don't mind older ones). I used to fancy boutique developments when I was younger and single. In fact, before we had children and before we got our brand new hdb flat in a matured estate, we used to live in such a development (renting). I think it suited us then.

Club membership? Perhaps you missed the main point, powder. I wouldn't say that we are buying a condo unit just for the pool & gym. It's the whole package which I think Milo got it. We are happily living in our nicely done up hdb flat which is surrounded by good amenities, and we can do without the facilities. The kids have been enjoying the pool at my parents' place not as often as they would like to, as it is very far from our place. I do exercise from time to time and it'll just be lovely to head home upstairs right after a workout without having to waste time in travelling home. It's the convenience. Holding birthday parties in function rooms, organising BBQs with friends and families, condo security (need not entertain door to door salesmen anymore), etc. Quality living. Not a need but good to have and why not if there's now an opportunity to make a good profit from our current flat.

Hence, the question really is, "Should we buy a condo right now considering that the prices are very high and let go of a good hdb flat which in the long run can potentially fetch us good *rental yields if we hold on to it"? (*High ROI given that the cost of the flat is low).

We don't want to cash in rashly and have regrets later. Buying a condo at a high price now may have its unfavorable consequences when selling later. Like Nichie pointed out, we will not be able to buy back a hdb after owning a private property. Condo facilities are good to have but it's not a must have for us. Of course, ideally, we'd be glad to buy another condo unit without having to sell but rent out the flat instead, unfortunately we'll be over-stretching ourselves and we're not keen, prefering to live within our means.
 

miloice

Well-Known Member
Condo isn't the only option. Its really the convenience. One can stay near a sports stadium and public swimming pool for similar convenience. But, there isn't so many of these HDBs. It would be probably easier to find condos.

I really frankly discourage buying those budget small condos in less known locations. When it gets old, the maintenance is a nightmare. Its smaller or at most the size of your HDB without any real improvement to your quality of life. On the investment front, these are the ones that are more vunerable to the market demand. They are only sellable in a good market when the rest are probably out of reach for the masses.
 

powder

Active Member
i didn't miss the point, i made one which most folks miss out when they are in this Mental Zone to buy. they tend to throw caution to the wind and most considerations are Pro-Decision.

whilst i do not disagree with the quality of life, i would say that finances always take precedence. as much as i believe u can afford and get by, i believe u need an extra factor to bring u to "let's do it!".

assuming that if u wanna buy that condo n u definitely need to sell your current place to finance it... it is hard to envision u trying to hold on to both. as a fellow sporean, i would say not to look back, this is preciely why some pple end up in debt, or why our gov encourage us not to hog public housing. being able to enjoy investments comes from the plannig u made a decade ago... u can't make a decision today and in 1fell swoop, suddenly be living in a condo, and getting yields from your HDB. if u had missed that astute, planning, simply admit to it and upgrade to your condo. u have to find investment in other vehicles, u won't be holding an extra hdb flat or house like some who are. live with that.

so if u can upgrade now... it's a good problem to have. just now or not... timing may not be good for money, but if quality of life can be had Now when u're younger, it's still an opportunity over upgrading when every member of the family has aged a further 10yrs.

i'm not discouraging it. i see what's in your head which i have seen over the years... u are not the first with this 'problem'. unfortunately the present environment does not allow u to do what u want. a decade ago, u can buy private and still hold onto your hdb. today u can't becos the prices have arisen to a level that makes it an Unaffordable issue, and not a "Should I?" issue. if u've missed it, wait for the next in anticipation and with Vision.

besides prices, u have to also look at the interest rates and servicing of the mortgage. as long as u can service it with good tenancy, it should not pose a big issue. problem is when u can't.
 

nichie

Member
I think its prudent to hold on to your decision first in current uncertain market situation with new ND minister and gov is reviewing all policies...we just dont know how all these will affect the market...but high chances it that the price will be stable or drop slightly under such political environment....gov will not cuase the HDB resale price to crash since they will have to answer to another group hdb owner voter...but not so for pte pty owner which seem the 4th control measure implemented....with the 29% increase in the number of unit sold in april for new launch...rumours are circulating that there will be a 5th control meansure coming if these continue for another few months....how these will affect the pte pty price is anybody guess..there are also these comments about over supply of condo come 2013 or 2014...how europe debt crisis will develop...how US economy will performance...will there be a 3rd QE which depress the green back value and keep the interest low and the effect of carry trade using US dollar on our stock market and bank interst rate...will the congress agree to lifting US debt borrowing limit...will US credit rating be lowered...all these will have a effect on sg economy...the pte pty index is at a all time record now and still increasing although at a slower rate....will the party continue..or is it going to burst soon...nobody know...alot of people are taking loan to buy condo and renting it out and the return is much better than putting money in the bank with the low mortgage interest...but will this last?....if you have another place to stay after selling your hdb...its good to sell now to lock in the profit or rent it out to earn rental where the return should be better than your bank deposit....and wait for further development if you are buying pte for own stay but also looking for appreciation in the near term...but for long term own stay...as long as its within your means then annytime is a gd time to go in...personally..I would not give up my hdb so easily especially you are geting loan from hdb...you are assure of a roof over your head even if you are bankrupt...no one can touch your flat and hdb is not known to throw people out just because they cannot service their loan due to difficulty...like others said..buying property is about location and holding power...
 

tomasulu

Member
i really dislike assertions such as - the govt will not cause the HDB resale price to crash. they are aunty talk pretending to be conventional wisdom that's ignorant of history and market forces. and all the chatter about the us economy is laughable in view of recent history. since 2008, our property market has risen strongly despite the weak us economy. do you just string words together into sentences and hope that they make sense?

everybody has an opinion but the reality is, nobody knows for sure. even if you are right about the trend to come, you can't be sure when it will last or when the tide will turn. i thought the 2008 dip presaged the end but boy was I wrong. and folks i think foolhardy was laughing their way to the bank (assuming they cashed out by now).

back to TS' situation. he wants to sell high and buy low. so he needs sell the flat and wait out for the downturn. the bet is the rental paid from now till he enters the market will be less than the price difference between now and when he enters the market. the next best scenario is sell high and buy high, which is what i think he should do. to hold on to the flat is just buy high, this is only viable if you think the market will continue to climb. why hold on if you think a downturn will come in the near future?
 

simpleman

Active Member
Wah, din know so many property gurus here..

Ya, I think I should sell my property now and sleep in the streets?

Come to think of it, I have not own a HDB yet.. so after selling all my property, I should qualify as first-time owner.. how cool is that..
 

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