Condo Buying Guide

Freehold Condo with Enbloc Potential

Freehold-Condos-with-Enbloc-Potential-Singapore

Benefits of Owning a Freehold Property in Singapore

One of the key benefits for owning a freehold property is the perpetuity of ownership that grants the owner the peace of mind that the lease will never run out. Such properties are especially useful for legacy planning because they allow owners to pass them down from generation to generation since there is no time limit to their ownership. A word of caution – It is still possible for governing bodies to take back that land for national development projects. So, make sure to take a long-term view when selecting the properties to avoid land locations that are more likely to cross paths with national infrastructures such as train lines or communication networks.

Another benefit for perpetual ownership lies in the ease of on-going financing. In Singapore, banks require properties to have at least 30 years of remaining tenure. The amount of financing that these banks can provide, also known as Loan to Value (LTV) ratio, can be significantly lowered if the property starts to age. As such, buyers for properties with limited tenure can access fewer financing options, consequently restricting the owners’ ability to sell their properties. However, owners of freehold properties are free from such a problem because of their infinite ownership.
Additionally, the sale price of a new freehold condo unit can be 10 to 15% higher when compared to a leasehold unit in the same area. Because of the prestige and perceived value that are tagged to freehold properties, they are usually one of the more sought-after property types in Singapore.

Does Freehold Mean I Own the Land?

The answer is yes and no, it all depends on the property type.

If it is a landed property such as Detached house, Semi-detached house, Terrace House or Good Class Bungalows (GCBs), the owner of the property is essentially the owner of the land too.
For freehold condominiums and cluster houses however, the individual unit owners are not the landowner.

The lands in which multiple property units are built are held by the Management Corporation Strata Title (MCST). Such an entity is empowered by the law to administer and oversee the common property of strata developments such as private condominiums, shopping centres and industrial facilities to fulfil management duties under the Building Maintenance and Strata Management Act (Chapter 30C). In short, it serves as a managing agent to upkeeping the property and facilities in compliance with the Act.

What Does En-bloc Mean?

A collective sale, also known as an en-bloc, refers to a sale of two or more property units to a common developer. This occurs when a developer wants to buy up the land on which an existing property stands and redevelop it as a new estate.

What Are the Factors Affecting En-bloc Potential?

1. Condo Plot Ratio

The key factor that can affect en-bloc potential is plot ratio. It determines the height of developments and the number of residential units that can be built. Primarily, developers favour old condos with under-utilised plot ratios so that they can build more residential units than the existing development to reap a greater profit margin.

2. Development Location

The location and the land size also play a huge part in gaining developers’ interest because they can affect the marketability and profitability of the new development. A prime location can naturally draw buyers with its convenience, however, if the land size is too big, developers might be threatened by the additional government tax and charges that they will incur if the development is not built and sold out within five years of obtaining the land.

3. Tenure

Tenure is another indicator for en-bloc potential because the older the property, the more likely to be the target of collective sales and easier for the developer to round up enough residentials to agree to the sale. As a rule of thumb, for a development that is older than 10 years, only 80% of its owners need to agree to sell their homes before the collective sale can take place. For developments less than 10 years, the percentage increases to 90%.

4. Well-Developed Neighborhood

A well-developed neighbourhood such as one with improved accessibility such as new train stations, amenities and rising prices in other property developments in the vicinity can also signal a potential for en-bloc because development in such areas are more marketable and developers can price their projects higher for greater profit.

Enbloc Cycle in Singapore

The en-bloc cycle seems to run on a 10-year cycle. The first wave occurred in 1997 with almost 100 collective sales completed in the three years preceding, and the second happened in 2007 when almost 170 en-bloc deals worth $12.61 billion were closed in one single year. The most recent wave that occurred in 2017 also witnessed at least 37 tenders.

In general, developers tend to favour freehold properties for their en-bloc initiatives because the Government Land Sales (GLS) is no longer releasing freehold plots to developers, hence buying over old freehold properties through collective sales are the only possibilities for regaining these lands. Nevertheless, these are win-win situations for developers to acquire freehold plots and property owners to profit from these collective sales that tend to offer higher prices.

Is En-bloc Potential a Factor to Consider When Purchasing a Property?

Again, the answer is yes and no because it all depends on the buyers’ objective and preference. Besides, with the 2018 cooling measure that imposes 30% Additional Buyer’s Stamp Duty (ABSD) on developers purchasing residential properties, en-bloc may be harder to come by.

With the ever-changing Singapore property market, buyers should conduct substantial research and analysis before embarking on their buying spree. When in doubt, reach out to our experts to tap on their insights

Should I Buy a Freehold Condo with En-bloc Potential?

While the potential to reap a profit from an en-bloc sale is attractive, this should not be the key deciding factor for purchasing a freehold condo. Before making the purchase, why not consider the objectives for the purchase of a property and different lifestyle of the occupants? Such exercise can often reveal suitable alternatives that are not considered before.

List of Freehold Condo we think with a En-bloc Potential

If freehold condos with en-bloc potential are still on top of the buying list, here are some possible options we think have a good En-bloc potential:

PROPERTYTENUREDISTRICTNO. OF UNITSTOP YEAR
GLORIA MANSIONFREEHOLDD5 / QUEENSTOWN31 UNITS1995
CAIRNHILL ASTORIAFREEHOLDD9 / NEWTON36 UNITS1983
SPANISH VILLAGEFREEHOLDD10 / TANGLIN226 UNITS1987
BALMORAL POINTFREEHOLDD10 / TANGLIN31 UNITS1974
GRANGE HEIGHTSFREEHOLDD9 / RIVER VALLEY120 UNITS1975
EAST GROVEFREEHOLDD15 / BEDOK36 UNITS1975
HIGH POINTFREEHOLDD9 / NEWTON59 UNITS1974
STILL MANSIONSFREEHOLDD15 / BEDOK30 UNITS1967

Buying a property based on the en-bloc potential alone can be a real gamble for buyers because there is no guarantee of such collective sales or when it will happen. In Singapore, there are many property options to suit different needs, contact our trusted agents now and let them assist you in your search for that ideal property.

Disclaimer: The list of condos and content article does not take into account of your personal investment and property purchase objectives and does not constitute property purchase or investment advise. The information are not intended to be and do not constitute property advice, investment advice, property investment advice or any other advice or recommendation of any sort offered or endorsed by Prop.sg also does not warrant that such information and publications are accurate, up to date or applicable to the circumstances of any particular case.

10 Steps to Selling Private Property in Singapore

Singapore Private Property Seller’s Guide

Last Updated on January 27, 2025 by Editorial Team

If you are planning to sell your condo property without engaging a professional condo property agent, the process may get pretty complex if you are unfamiliar with real estate transactions in Singapore. Not only do you have to handle most of the paperwork yourself, but you’ll also need to take on the responsibility of marketing and selling the property to potential buyers.

However, skipping the middleman does imply substantial savings – often in the five-figure range. If saving costs is your main goal, and you’re ready to take on the extra responsibilities, the outcome can be well worth the effort. To help you succeed, here’s a 10-step guide to selling your property. Follow every step and you’ll not go wrong! 

Selling-Private-Property-in-Singapore-Infographic

Decide on an Asking Price

To start, determine a price range you are willing to accept for your property. Research websites such as SRX and Propertyguru to get a realistic idea of the market trends. This will help you determine a competitive asking price that is commensurate with the true value of your property.

Also, take into account key factors like the property tenure, current condition of your home, furnishings, amenities in the neighbourhood and location. These will offer a glimpse into the hidden potential of your property.

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Refresh Your Home, Make It Attractive for Sale

The first impression of your home is crucial when it comes to attracting potential buyers. Before putting your property on the market, give it a well-deserved touch-up. You’ll never know how that little enhancement can fetch throngs of admirers.

Declutter your space by selling, donating, or giving away items you no longer need. A fresh coat of paint or rearranging your furniture can also do wonders to create a more elegant and inviting atmosphere. In this day and age, people are leaning towards the “less is more” minimalist style, getting rid of a few unwanted furniture will not hurt anyone.

If you do not have the time to give your home a makeover, you can always engage in home staging services. These services specialise in decorating and rearranging properties to highlight their best features. Whether you need to spruce up your living room or kitchen, there is bound to be a home staging service you can rely on.

When snapping marketing photos of your property, be sure to remove personal items like family photos, framed certificates and memorabilia. Tuck away personal care items and avoid having your children or pets in the photos too. The goal is to create a neutral space where potential buyers can envision themselves living. 

Market Your Property on Multiple Platforms

Once your home is ready, it’s time to showcase it to potential buyers.

Thanks to the Internet, listing your property on platforms like 99.co and Carousell is now easier than ever. You may even want to stitch together a home-tour video with AI tools like Capcut and blast it on your favourite social media to catch the attention of potential buyers.

Your listing should also include important information like the size of the home, any unique selling propositions and images of your decorated property. Featuring future development plans in the neighbourhood, nearby facilities, and proximity to public transportation networks will also enhance your property’s marketability.

Once your listing goes live, your home will be ready to attract potential buyers.

Arrange for Viewings of Your Property

This is a critical step in selling your home as it allows potential buyers to experience the space firsthand. Provide clear contact details in your listing so interested parties can schedule appointments.

Prepare your home before every viewing to ensure it looks its best. If you’re short on time, consider hosting group viewings where multiple clients can visit at the same time. This not only saves time but also creates a sense of demand, encouraging buyers to act quickly.

Get Ready to Negotiate

Negotiations are a natural part of the property-selling process. Buyers may counteroffer, so it’s essential to know your limits and be prepared to renegotiate. If you’re not well-versed in the property scene, take some time to research the market rate and decide on the minimum price you’re willing to accept.

Don’t let low viewing rates or lukewarm responses tempt you into accepting a low offer. Homebuyers often need more time to contemplate because buying a home can affect their long-term finances. Sometimes, it pays to stay firm and wait for the right buyer.

Engage a conveyancing lawyer

You’ll need to appoint a conveyancing lawyer to handle the legal aspects of selling your property. The lawyer can assist in legally transferring your property ownership to the buyer, prepare the Option to Purchase (OTP) and guide you through the sale.

Essentially, your lawyer will take over the entire transaction once the buyer finalises the OTP and offers up the Option fee. You don’t even need to meet the buyer in person to complete the final stage of the deal.

Issue the Option to Purchase (OTP) and Collect an Option Fee

The OTP will be issued to a potential buyer, and upon their receiving it, he or she must exercise it by the deadline, normally about 14 days, in order to enter into a contract for sale with you. To ensure that the buyer remains interested in the purchase of the property, you should secure an option fee which is essentially a payment in exchange for your OTP. The option fee is normally priced at 1% of the purchase price of the house.

The Option to Purchase will contain terms on the sale and purchase of your property, such as confirming that the buyer has checked the property for physical defects, and as such will now bear those risks.

Buyer Exercises the OTP

Once the buyer decides to proceed with the transaction, they will return the signed OTP and pay the remaining 4% option fee to your lawyer before the deadline. This formalises the sale agreement and marks the official start of the selling process.

From this point, lawyers from both parties will handle most parts of the transaction.

Pay Seller’s Stamp Duty (SSD) if Required

You are liable to pay a Seller’s Stamp Duty (SSD) if the property you are selling is within three years of ownership, The rates are:

  • 12% of the sale price in the first year
  • 8% in the second year
  • 4% in the third year

Unless you have good reasons to sell the private property before the minimum occupation period, avoiding SSD is financially advantageous because it can directly impact your net profit from the sale of your property.

Complete the Sale and Prepare To Move Out

As the completion date approaches, your lawyer will finalise the contract and inform you of the final sales date when you’ll hand over the keys to the new owner.

As the completion date approaches, start packing your belongings and arrange your move to your new home. Planning ahead ensures a smooth transition.

And there you have it, a simple 10-step guide to selling your property without engaging an agent. The process may seem tedious and involve lots of paperwork, but as long as you follow these steps and engage an experienced conveyancing lawyer, selling your home may not be as daunting as you may think.

If you have any questions or would like to find out more about how to sell your property, feel free to contact us. Let our team of professionals help you sell your condo in Singapore.

FAQ Selling Singapore Property

Selling property in Singapore incurs several costs, including a property agent commission of about 1%-2% of the sale price plus 9% GST, legal fees ranging from SGD 2,500 to SGD 4,000, and a property valuation fee between SGD 500 and SGD 1,000.

Sellers may also face Seller’s Stamp Duty if the property is sold within three years, with rates up to 12%. Additional expenses can include repairs and renovations, a mortgage discharge fee (SGD 300 to SGD 500), early repayment penalties for mortgages, and miscellaneous administrative fees.

The timeline for selling private property in Singapore typically spans 3 to 6 months largely depending on the price you are planning to sell for as well as the attractiveness of your unit. Initially, preparation takes 1-2 weeks and it involves property valuation, cleaning, staging and listing.

Marketing and viewings will follow next lasting 1-3 months. During this period potential buyers will visit and offers are negotiated. Once a suitable offer is accepted, the Option to Purchase (OTP) process will start and it takes around 2-3 weeks, including a 14-day period for the buyer to exercise the OTP.

The Sale and Purchase Agreement (SPA) signing follows and it will take around 2-4 weeks. Finally the completion which includs due diligence, legal and financing, occurs over 8-12 weeks, culminating in the transfer of ownership.

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10 Step Guide: Buying Resale Condo in Singapore

Buying-Resale-Condo-in-Singapore

Working out your finances to understand your budget

The amount money that you can potentially borrow depends on your creditworthiness and the Loan-To-Value limit imposed by the Monetary Authority of Singapore. You can expect to obtain up to 75% of the property price on your first housing loan but this is subjected to the loan tenure. Additionally, there is the Total Debt Servicing Ratio (TDSR) to consider as it allows you to utilize up to 60% of your salary on debt repayment. However, if you are purchasing an Executive Condominium, the TDSR will be limited to up to 30% of your salary.

Moreover, there is a minimum cash down payment that one has to take note of. This cannot be made from either your own funds or from your CPF account, so you have to ensure that you have sufficient cash.

With reference to the financing that you are able to obtain, your real estate agent will be better able to narrow down properties that will best meet your budget.

Buying-Resale-Condo-in-Singapore-Infographic

Consider your key requirements

Attaining the home of your dreams begins with knowing what you want. All home buyers yearn for property that is able to reap generous returns. To determine the potential of a property, it is imperative for home buyers to do basic research and consider the following factors:

Freehold or Leasehold Condo

Depending on one’s risk appetite, some buyers are inclined towards freehold developments because such property tends to appreciate, and their tenure offers security to buyers. In contrast, some buyers may prefer leasehold developments for their higher capital appreciation and thus, higher yields.

Upcoming Regions and Availability of New Projects in Those Regions

Developments that are situated in areas designated for major redevelopment tend to provide better returns.

Proximity to MRT Stations

Developments that are in close proximity to MRT station(s) are able to fetch better resale values due to their potential to slash commute times for the residents.

Possible School Choices Relocation

Singapore’s distance-based priority allocation rule favors developments that are within a 2km radius from prestigious schools. To reap favorable gains from your potential property, it is thus wise to consider the location to which the good schools may possibly relocate.

Other requirements may include your budget and a convenient timeline for you to move in.

Engage a Real Estate Agent

Now that you have your requirements in mind, you will need assistance in narrowing down your options from a myriad of available ones – this is when you engage a real estate agent. A real estate agent will work with you to comprehend your requirements, subsequently creating a list of properties for your consideration. Subsequently, you may further narrow down the options on that list and start viewing the properties of your choice. Throughout the process, your agent will provide advice on aspects such as market rates and guide you along for a seamless transaction.

However, be sure to run a check on the Public Register (maintained by the Council of Estate) to ensure that you are engaging an authorized professional.

Engage a Property Lawyer

Your team of property professionals is not complete without a property lawyer. A property lawyer will assist in taking you through the complex financing and legal documentation process.

Running through contractual terms and conditions is one of the fundamental tasks of a property lawyer. Additionally, he also has to run a title search to check that the seller is the actual owner of the property. Next, he will have to send out legal requisitions to at least nine government agencies to ensure that there will not be any problems with your purchase, even in the future. After which, he will receive payment from you and exercise the Option-to-Purchase in a timely fashion.

A property agent also plays a crucial role in the preparation of your financing and i) making progress payments (for incomplete property) or ii) determining and making the right amount of payment needed in order to change hands (for completed property).

Buyer Stamp Duty (BSD), Additional Buyer Stamp Duty (ABSD)

The Buyer Stamp Duty (BSD) is a tax levied on all property buyers regardless of nationality who purchase any property and it is dependent on the purchase price or market value of the property. (the ‘Base’). Generally, the more expensive the purchase price or market value of the property, the higher the BSD Rate.

The BSD can be calculated as follows:

 

To avoid or reduce your ABSD liability, your lawyer may assist you in timing the sale of your existing property with the purchase of the new property.

Secure the Option to Purchase (OTP)

After determining the BSD and ABSD taxes that are payable, you may proceed to secure an OTP. Securing an OTP involves the payment of the first option fee (1% of the purchase price of the property). The payment of this option fee prevents the seller from selling that property for a specific duration (usually two weeks).

Afterwards, a second option fee (4% of the purchase price of the property) will be incurred (Step 8).

Final Payment

Finally, you will have to pay your real estate agent and your property lawyer.

If you are purchasing a resale unit, it is customary for the seller to pay his own agent, who will then pay your agent. If you are purchasing a new condo unit, your agent will receive his payment from the developer.

Payment to your lawyer does not only consist of his legal fees; payment will also have to be made to the Singapore Land Authority and Inland Revenue Authority of Singapore.

Exercise the OTP and pay balance of down payment

Within two weeks of securing your OTP (Step 6), you will have exercise it and pay the first option fee (1%). Your property lawyer will assist you with this and ensure that the OTP is exercised before the deadline.

Next, you have to obtain your financing and pay the second option fee (4%). Once this payment has been made, you can then make the down payment of 15% or 45% on your first or second property respectively.

Payments for both option fees must be made in cash, while the down payment can be paid via a combination of cash and CPF.

Wait for completion, Awaiting the keys

Once all the relevant paperwork and payments have been processed, you can officially look forward to collecting the keys to your new home. The purchase of property that is approaching its Temporary Occupation Permit (TOP) allows for a shorter wait.

Home Renovation and Make Over

Let your imagination run wild by borrowing the creative juices of interior designers. When selecting an interior designer to help you with transforming your vision into a reality, you should weigh the cost involved with the designer’s track record to reduce the likelihood of having to incur repair costs in the future.

Once the house has been designed and furnished to your heart’s desire, you may begin moving into your new home. Creating a list of all the belongings you would like to take with you and packing them in an orderly fashion will guarantee that you will have an easier time unpacking. You may engage professional movers, family or even close friends to assist you in moving bulkier items.

Summary

Purchasing a condo may seem daunting on first glance but it does not necessarily have to be if you follow the steps in this simple guide and engage a professional, reliable team.

If you’re looking for to buy a condo in Singapore with professional guidance at every step of the way of your property purchase, look no further because Prop.sg is the team for you and do you know what is the best part of it all? The resale condo buyer services provided by us are completely free of charge (i.e. no commission) to you as a buyer.

8 Ways to Upgrade from HDB to Condo: The Ultimate Guide

Upgrade-from-Hdb-to-Condo-Singapore

8 Ways to Upgrade from HDB to Condo: The Ultimate Guide 2022

Public housing is the most common form of housing ownership here in Singapore, with over 80% of Singaporeans residing in one. Yet, there are also private houses, in which upgrading to one is subjectively deemed as rising towards the upper echelons of society. Perhaps, after living in your humble abode for a while now, it may have crossed your mind to either upgrade or purchase a private house, namely a condominium.

Table of Contents

Upgrade-from-Hdb-to-Condo-Ultimate-Guide Before you begin, you ought to consider your eligibility in purchasing or upgrading to a condominium. You will only be able to buy a condominium if you have met the following requirements: reaching the Minimum Occupancy Period (MOP) of living in your HDB for five years and above, and that at least one of the registered homeowners is a Singaporean Citizen. Once you have cleared these requirements, you may begin to contemplate if you wish to retain or sell your flat. There are these four basic sources for you to fund your purchase: cash, personal savings, Central Provident Fund (CPF) from the Ordinary Account as well as taking a bank loan. You have to consider how readily available these funds are to you before you proceed to purchase your new home. For instance, bank loans are dependent on your income, determining how much the bank is willing to provide you with a loan. Selling your flat will allow you to properly fund your purchase of a condominium, with sales proceeds as another channel to being able to pay for it. Should you choose to sell your HDB and upgrade, you may purchase either a private condominium or an executive condominium with the option of using or keeping your personal savings. On the other hand, keeping your HDB allows you to purchase either a private condominium or an overseas condominium, also with the option of using or keeping your personal savings. In totality, selling your HDB renders you with one property, while keeping it leaves you with two properties under your name. And there you have it, a basic overview of purchasing a condominium. If you have any further queries, feel free to contact us, with a no obligation, no charge consultation on the options available to you.
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3 Top Reasons why People Upgrade to a Condominium?

Singapore is home to the wealthiest individuals in Singapore, with over 207,000 Singaporeans declared millionaires in 2019 (Business Insider, 2019). With the close association of one’s home ownership to their wealth, it is no surprise that Singaporeans are choosing to shift away from public housing to owning their own private properties. Yet, others also choose to upgrade their homes to condominiums for convenience as well as to be able to make passive income.

Aspirations and Dreams of Private property ownership

A private property is largely deemed with opulence, being able to afford the luxury of calling a home your own. Singaporeans are by and large, very ambitious people with many dreams and aspirations. Looking to rise towards the upper echelons of society, private home ownership plays a crucial role in validating one’s wealth and status. It is hence seen as a goal that most people wish to work towards.

An investment property to Rent out for Passive Income

Others may have considered upgrading to a condominium because they have the sufficient funds of purchasing a condominium, while retaining their HDB. In turn, they are able to rent out their HDB flat and receive passive income. They will use their former house as the investment, which will allow them to grow their wealth. In a 2017 study, out of 1 million HDB homeowners, 54,000 households rented out their whole flats while 73,000 households rented out bedrooms (Straits Times, 2018).

Moving nearer to the School of the Parents Choice (For their Kids)

Upgrading to a condominium may also be a result of wanting to ensure convenience for the children, as they travel to school. Condominiums these days are located at spots where many schools are just around the corner. Instead of simply looking for another HDB, people are usually more inclined to look at condominiums as their new potential home. The convenience will allow parents to spend more time with their children and ensure that travelling will not be too tiresome which may in turn result in a loss of morale. Being located nearer to the school also allows parents to provide their children with extracurricular activities to heighten their growth and enable them to excel holistically. As such, parents choose to upgrade to a condominium because they want to be nearer to their children’s school.

All in all, Singaporeans are slowly looking to upgrade to condominiums when they are able to because it is a goal of theirs, alongside other reasons such as convenience and the ability to profit off of their former home.

Can I buy a Condominium if I Own a HDB Flat?

 

As you contemplate on whether you should upgrade to a condominium, you may wonder if you are eligible to purchase one in the first place. Before you begin thinking about your finances, there are a couple of legal requirements you have to meet in order to be able to buy a condominium.

HDB Flat Minimum Occupation Period (MOP) Status

If you currently reside in a HDB flat, you will have to meet the Minimum Occupation Period (MOP). The MOP is the number of years you need to have stayed in the HDB before you are able to buy a condominium.

According to HDB, the period will be dependent upon the purchase mode, type of flat and the date in which the flat has been applied. If you purchased your HDB flat from HDB directly, from a developer via the Design, Build and Sell Scheme, the Selective En bloc Redevelopment Scheme (SERS) with portable SERS rehousing benefits or a resale flat bought from the open market with the CPF Housing Grant, the MOP will be 5 years.

A flat bought under SERS only, the MOP will either be 7 years from the date of selection of the condominium, or 5 years from the date of occupation, whichever may be earlier. Resale flats bought from the open market without a CPF Housing Grant is dependent on the size of the flat. For one-room flats, there is no MOP. For two-room flats and larger, if you applied for the flat after 30 August 2010, it will be 5 years, flats applied between 5 March to 29 August 2010 will have an MOP of 3 years and any time before that will be 2.5 years with an HDB loan and 1 year with bank loan/without any loan.

For flats bought under the Fresh Start Housing Scheme, the MOP will be 20 years.

At least 1 Homeowner is a Singapore Citizen

Should you have already met the MOP, you will be eligible to buy a condominium. However, in order to keep the HDB, at least one of the homeowners of the HDB has to be a Singapore Citizen. Otherwise, the HDB flat has to be sold within six months of purchasing the condominium.

If you have met these requirements, congratulations! You are eligible to upgrade to a condominium.

Should I Sell or Keep my HDB Flat when buying a Condo? - 3 Things to consider

 

Once you have made the decision that you intend to upgrade to a condominium, you may begin to ponder as to whether your old flat should still be kept or sold. While everyone will have different circumstances, this article provides you with a few prompts on which decision you should make with regard to your HDB flat.

1. Current Financial Situation

When you have made the decision that you intend to upgrade to a condominium, the most important question you have to ask yourself is if you have the means of purchasing the condominium without considering having to sell your current HDB flat. If the answer to that is yes, you are open to the option of choosing to keep your HDB flat. But if you answered no, then perhaps you should think about selling your HDB flat because you do not want to be in a great deal of debt as you keep your old apartment. On top of that, what are some purchases you will be making in the near future, perhaps maybe funding your child’s education? In addition, you should consider your monthly income as it determines the loan that you are able to take from the bank, and the amount in your CPF alongside how much of it you can actually use is crucial. These factors will be considered later in the guide under ‘Financial Considerations for your Condominium Purchase’.

2. Remaining lease of HDB flat

It is no secret that as HDBs become older, they start to slowly depreciate and the demand for it falls. As such, it is important to consider how long these flats will be under your name until they are returned to HDB. If you own a relatively new flat, which has been upgraded and the amenities around are in pristine condition, you can continue to keep your flat if you choose to. However, if you have been living there for a long time, you should perhaps start to consider putting it up for sale.

3. Location of HDB flat

If you are looking to keep your HDB flat for the sake of renting it out and earning passive income from it, you have to ensure that your flat is situated in a popular area. Renters are more drawn to renting flats at areas near their workplace or schools, because it may be the reason why they are looking to rent a flat in the first place. Consider how desirable is the location of your HDB flat, by listing out the facilities nearby such as transportation, shopping centres, hawker centres and recreational areas such as parks.

These are a few factors that you may consider when deciding on keeping or selling your HDB flat. Ultimately, your finances will show if you have the means to do so. But even then, the value of the HDB flat in the long term should also be taken into consideration.

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Selling your HDB Flat

What is the process of selling a HDB flat in Singapore?

Once you have set your mind to selling your HDB flat, your next move would be how exactly do you expedite this process? The following article will give you a rundown of putting your HDB flat on the market.

For starters, you will have to register your intent to sell your HDB Flat. Visit the HDB Resale Portal on the HDB website to register. Because of the Ethnic Integration Policy (EIP) which ensures a balanced mix of ethnic groups living in HDBs, the website will provide you with information with regard to who will be able to purchase your flat. After registration, you will also be able to view your flat’s Singapore Permanent Resident (SPR) Quota. The SPR Quota refers to a limit on non-Malaysian Permanent Residents eligible to buy your flat. The SPR Quota at the neighbourhood level is capped at 5%, and 8% at the block level. In addition to this, you should also check if your flat will be affected by any upgrading or renewal programme. If so, the buyer will be liable to pay for the upgrading cost.

Once you have registered under the HDB portal, you are able to put up your flat online on various platforms and list it for sale with the help of a real estate professional. You will have to begin considering how to make your flat appealing to buyers. From the price, images of the flat, its furnishings as well as a convincing description of the house such as a convenient location will help boost a buyer’s interest.

After you and a buyer have come to an agreement on the sale price and they have declared their interest in purchasing your flat, the next course of action would be to grant them an official HDB Option to Purchase (OTP), the only viable agreement in the sale and purchase of a flat. The buyer then has to provide an Option fee in exchange for your signed OTP. Within 21 days after the exchange, the buyer will have to confirm their purchase. After confirmation, the buyer will pay you the Option Exercise Fee before signing on the OTP form. Bear in mind that the OTP and Option Exercise Fee may be negotiated between both parties, but may not exceed S$5000 in total.

The buyer and yourself will then have to go online to the HDB portal and submit a resale application document. The application has to be submitted within 7 days of each other’s submission, both the buyer and seller. The resale application has to include the details of the OTP, the buyer and your particulars, a declaration of an existing loan with HDB or any financial institution if applicable, as well as your purchase.

Through the HDB portal, you will then have to endorse the following documents: seller’s sale proceeds, acknowledgement for Upgrading Programme (if applicable), spouse Consent to Resale (if applicable) and resale documents for acknowledgement. There will also be a resale administrative fee that has to be borne by both the buyer and seller each, at S$40 for 1 to 2 bedroom flats, and S$80 for 3 bedroom flats and bigger.

Once HDB has given a final evaluation, they will then provide a stamp of approval with regard to the sale of the flat. There will be a Resale Completion Appointment at HDB hub, in which legal documents will be signed and the exchange of house keys will be facilitated. HDB will then issue an approval letter which claims that you have now successfully sold your HDB flat.

Computation of HDB Flat Sales Process (Selling Price – Cost and Fees)

HDB-Flat-Sales-Proceeds-Guide

Financial planning is crucial when you decide to sell your HDB flat. The following article will guide you through the computation of your final sales proceeds. However, if you are not too concerned with the complex breakdown of costs and fees, you may simply utilise the HDB Sales Proceeds Calculator available on the HDB website to get an estimate of the costs.

The final sales proceeds, refers to the purchase price of your HDB flat, excluding the outstanding mortgage loan, the return of CPF funds used with accrued interest, deposit fee received previously and any other payable amounts such as resale levy or upgrading costs.

There are also a couple of outstanding payments you will have to settle as well when you sell your HDB flat.
Firstly, there is the outstanding mortgage loan, which refers to a housing loan you have taken which has yet to be repaid. To settle this, it will be deducted from the resale price of the flat should it be sufficient. Otherwise, the balance of the loan will have to be repaid in cash. Should you require information on your outstanding mortgage loan, you may visit the HDB website on financial information of purchased flats.

Secondly, if you have made a purchase of the flat with the aid of CPF monies, either as a down payment or monthly installments, it has to be returned with accrued interest into your CPF account when you have sold your flat. This cost will also be deducted from the resale price of the flat, and should it be insufficient will be covered by the fees collected (i.e: deposit fees). You may view the amount to be refunded through the CPF website under Public or Private Housing Withdrawal Details.

For those who will be purchasing a condominium or another subsidised flat after the selling of your HDB flat, you will also have to cover the fees of a resale levy. If this is your first resale of subsidised housing, the resale levy for households are as follows: S$15,000 for a 2-room flat, S$30,000 for a 3-room flat, S$40,000 for a 4-room flat, S$45,000 for a 5-room flat, S$50,000 for an executive flat, and S$55,000 for an executive condominium. As for single grant recipients, they are only required to pay half of the resale levy as stated.

There are also other costs which you may have to bear such as the upgrading costs, which will be borne if you are still the flat owner on the date the bill was issued. Should your existing flat reside in an upgraded precinct and you are a Singaporean Citizen who benefitted from the former Main Upgrading Programme (MUP) more than once, you will also have to fork out money to pay for the upgrading levy.

In addition, there are the non-refundable resale application administrative fees, whereby for 1 and 2-room flats, it will cost S$40 each for the buyer and seller, and S$80 each for 3-room and bigger. Legal fees are also applicable should you engage with a HDB solicitor which consists of the conveyancing fees, registration and microfilming to register land titles and deeds as well as miscellaneous fees. Without a HDB solicitor, you will only have to pay for the total discharge of the mortgage. The seller stamp duty will only be applicable to those who recently became homeowners by way of transfer, and the property tax will have to be paid to the Inland Revenue Authority of Singapore (IRAS). There is also the Service and Conservancy charge which has to be paid on the date of completion.

3 Financial Considerations for your Condominium Purchase – How much can you afford? (CPF + Bank Loan + Savings)

1. How much CPF can you use for your property purchase?

CPF-Usage-for-Housing-Loan-Guide
Purchasing a property is not a mere stroll in the park. Not only do you have to make many considerations and decisions, you need to have the financial means of being able to fund your property purchase. However, the government has put in place a savings plan named the Central Provident Fund (CPF) which can be used to fund your next property purchase.

If you are looking to upgrade to a condominium, the loan taken up will be a bank loan. The maximum CPF usage is dependent upon whether the remaining lease will be able to cover the youngest owner until they are aged 95. If it does, you are able to the Valuation Limit or the Withdrawal Limit. The Valuation Limit (VL) the lower of the purchase price or the market value of the property when you bought it. If the remaining lease on the home does not cover the youngest owner till at least the age of 95, CPF savings can only be used up to a pro-rated VL. As for the Withdrawal Limit (WL), it is essentially 120% of the VL, in other words, the maximum amount that may be used from your CPF savings.

For those who wish to use beyond the VL (up to WL), the following requirements have to be met: Firstly, the house is able to cover the youngest homeowner until they are 95 years old. Next, for those below the age of 55, you need to set aside the current Basic Retirement Sum (BRS) in your Ordinary Account (OA) and Special Account (SA). Those above the age of 55 need to meet the BRS in your OA and SA.

As for HDB flats which will take up a HDB loan, if the lease covers the youngest owner up to age 95, usage of CPF for new HDBs do not have a VL or WL. As for resale HDBs, there is a VL but no WL.

For all houses, if the remaining lease does not cover the youngest owner until they are age 95, the maximum CPF usage will be a pro-rated VL.

By and large, whether you are able to utilise your CPF in order to fund your next property purchase is dependent on a variety of factors. Depending on the property that you wish to purchase, it will affect the amount that you are able to use. HDBs will allow you to use more of your CPF as opposed to private properties. The age of the youngest owner would also greatly affect whether you are able to use a VL and WL, or a pro-rated VL. You should also keep in mind on the remaining lease of the property

2. Bank Loan: How much bank loan can you get?

Residential-Property-Loan-Guide
Unless you are making millions on end, most of us will have to take a loan from the bank when buying a condominium. Properties are not cheap, and as such we have to take hefty sums from the bank. Because banks have to take into consideration the riskiness of loaning to an individual, there will be a limit to how much one can actually borrow from the bank. This article will cover the factors that affect how much bank loan you may take.

Mortgage Servicing Ratio (MSR)

MSR refers to the portion of a borrower’s gross monthly income that goes towards repaying all property loans, including the loan being applied for. This is applicable to those looking to purchase an executive condominium. To calculate the MSR, take the monthly repayment installments for all property loans and divide it by your gross monthly income, then multiply it by 100%. The borrower’s MSR has to be less than or equals to 30%.

Total Debt Servicing Ratio (TDSR)

TDSR refers to the portion of a borrower’s gross monthly income that goes towards repaying the monthly debt obligations, including the loan being applied for. To calculate the TDSR, take your total monthly debt obligations and divide it by your gross monthly income, then multiply it by 100%. It should be less than or equal to 60%. The monthly debt obligations will include property-related loans, including the loan being applied for, car loans, student loans, renovation loans, credit card loans and any other secured or unsecured loans, including revolving loans.

Loan Tenure

The loan tenure refers to the amount of time you are given to repay a loan, dependent upon the property type. The maximum loan tenure for housing loans is capped at 35 years for non-HDB properties.

Sum of Loan Tenure and Age of Borrower

Taking the maximum loan tenure as 35 years,

Loan-to-Value (LTV)

The LTV limit determines the maximum amount an individual can borrow from a bank for a housing loan, which is a percentage of the value of the property purchased. If you have no outstanding house loans, the LTV limit is at 75% with a minimum cash down payment of 5%, or an LTV limit of 55% with a minimum cash down payment of 10%. For those with one outstanding house loan, the LTV limit is 45% or 25%, with a minimum cash down payment of 25%. With two or more outstanding house loans, the LTV limit is capped at 35% or 15% alongside a minimum cash down payment of 25% as well. The lower LTV limit will only apply if the loan tenure exceeds 30 years, or if the loan extends beyond the borrower’s age of 65 years.

Down Payment Requirements

As an extension of the aforementioned sub-section (i.e: Loan-to-Value), the down payment can consist of only cash, or cash and CPF. For your first bank property loan, with a 75% LTV,

Cash: How much personal savings do you plan to use?

Beyond the use of your CPF and taking a bank loan, you may have to utilise your personal savings in order to fund your next property purchase.

Consider what proportion of your savings you intend to use to pay for your new house. For starters, how much does your property cost? It is important that the cost of the property is not out of your budget, as while it may be a good investment in the long run, you may encounter financial difficulties in your day-to-day finances. Next, are you currently in any financial debt? Perhaps, you may have purchased a car and you have yet to completely pay off your debts. The income you take home is also crucial in your financial planning, as it determines how quickly you will be able to pay back your loans.

Ensure that you set aside a proportion of your personal savings for situations such as in an emergency or to pay for your children’s college education. It is important to remember that you should not be using most or all of your personal savings in order to pay for your new property. Keep in mind that your personal savings is there to ensure that during emergency situations, you will not struggle with your finances.

If you are unsure of how the calculations with regard to personal savings, you may wish to hire a financial consultant to advise you on how to plan your finances. They will guide you through your expenses for each month and in turn the financial considerations for the future such as the time span of being able to pay off your debts. You will be able to understand how much can be allocated to purchasing your new property, while ensuring that you do not break the bank doing so.

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8 Available Options for your Next Property Purchase – Property Asset Progression Plan

Upgrade-from-Hdb-to-Condo-Ultimate-Guide

As you venture into your quest to purchase your next property, keep in mind that you have a variety of options. You will have to choose either to keep your HDB flat while you purchase a new property, or sell your HDB flat and then purchase a new property.

If you are looking to only own one property, the route that you will take would be to upgrade your apartment, likely a HDB flat, to a condominium. You have the choice of purchasing either a private condominium, or an executive condominium. But based upon your financial ability, it determines whether you will use your personal savings or not. If you are financially stable, you may be able to keep your personal savings while you purchase either a private condominium or an executive condominium. However, if you have budget restrictions and are not able to fully cover the costs after loans and the use of funds in your CPF, you may have to utilise your personal savings.

Perhaps you are looking to withhold the previous property and invest in a new one, you may choose to either purchase a private condominium or an overseas condominium. Once again, it is largely dependent on your financial ability to keep or use your personal savings in your purchase. Hence, you will either buy a private condominium or an overseas condominium, and keep your personal savings if you are able to cover the expenses, or you may have to use it if the loans and CPF does not fully cover it.

While owning only one property will be less costly, keep in mind that owning two properties enables you to earn passive income. You will be able to rent out your HDB apartment and in doing so may aid you in the repayment of your loans over time.

Key Condo Purchase Considerations

Executive Condo vs. Private Condo – Which is suitable for you at this moment?

You may be conflicted about whether you should purchase an executive condominium or a private condominium. An Executive Condominium (EC) refers to a hybrid between a public-private property, whereby it is not exorbitantly priced while ensuring a comfort comparable to that of a private condominium. This article will give you a rundown of the factors to take note of as you decide on either an EC or a private condominium.

Financial ability plays a large role in this decision. ECs are better in the sense that they are not as expensive as private condominiums are. Purchasing an EC allows you to receive a HDB grant of S$30,000 or less, while there are not any for private condominiums. ECs are also up to 25% cheaper than private condominiums, and as such allows you to save a ton of money.

However, ECs have greater restrictions as compared to private condominiums. For one, you are not allowed to rent out your executive condominium, and you have to fulfil the MOP of five years before you are able to sell your property. New ECs are also only open to Singaporean Citizens, and then to PRs in the sixth to tenth year. Subsequently, only then are foreigners eligible to purchase. Moreover, private condominiums are freehold, while ECs generally come with a 99-year lease.

All in all, the condominium you choose to purchase is largely dependent on your financial ability as well as your purpose with regard to the property. If you are financially stable and the cost of a private condominium is affordable for you, by all means, you should purchase that. If you may have budgetary restraints, perhaps an EC may be more suited for you. It should also be noted that private properties are more worth it in the long term, if you wish to own your property for an indefinite period.

New Launch condo vs. Resale condo – Which should you buy?

There are so many pros and cons when it comes to purchasing a new launch condo and a resale condominium. You are able to go on for hours until the cows come home on the perks of both of these choices, but ultimately your decision should be based upon your personal preferences.

The main difference between a new launch condominium and a resale condominium would be the quality of its facilities as well as how pristine the condition of the home is. However, this may vary depending on how long it has been since the resale condominium was built. If you are someone who is not bothered by your expenses and willing to splurge on the newest and latest facilities, a new launch condominium is likely to be suited for you because it is most likely to be equipped with much fancier components. For instance, new launch condominiums are incorporating smart home technology within the homes, while resale condominiums most likely do not have this. But if you are looking for a cheaper option, a resale condominium is definitely the go-to option if you are not looking to break the bank.

In addition, new launches usually require a few years before you are able to live in it as it is still under construction. Resale condominiums are already built, hence you are able to make examinations of your preferences within the house as you go for a viewing, which you cannot do for a new launch.

Even then, it should also be kept in mind that new launches are likely to have smaller units as opposed to resale condominiums. This is because with the limit of land in Singapore, constructors have to work their way around this limitation which became a product of the smaller units. If you are looking to house a large family, perhaps a resale condominium will be more suited for you as you are likely to be assured that there is ample space around your home. However, if this factor is not on your radar, perhaps consider going for a new launch. The furnishings are more guaranteed to be of superb quality.

There are many factors that come into play with regard to choosing a new launch condominium. While a resale condominium has its advantages, a new launch condominium has newer facilities and features that a resale does not, and the investment horizon and remaining lease will be longer. New launches are hence deemed more attractive to buyers or potential tenants, if you are looking to sell or rent out your condominium respectively.

Condo Location – Considerations on where should you buy?

Deciding on the location of your new home should be done carefully and strategically. It is essential to keep in mind your preferences as you view the different houses, as the location of it will be a gamechanger. This article will consider the various locations across the island and which area you should narrow down to.

Travelling in this tiny island is not an issue at all. With an efficient train system, the Mass Rapid Transport (MRT) allows you to get to places rather quickly and easily. Even then, if you are travelling to the same place every day for school or for work, it may sometimes become tiring during your commute, especially if it takes more than 45 minutes to get to your destination. As such, if you travel via public transportation, you should ensure that your new home has easy access to the MRT, a bus stop to take you to one. Moreover, you should keep in mind those more travelled places, including your family’s place and the preferred school of choice for your children. This way, you are able to get to places easily If you are someone who drives, apart from choosing a location near to places more travelled to, it is suggested that your new home should have quick access to the expressways.

In addition, it is better to have your new home conveniently located near amenities such as shopping centres, hawker centres as well as community centres, depending on your personal preference. That way, if you have to run errands or wish to take a quick bite, it is easily within reach. If you are someone who enjoys nature and or often exercise outdoors, you may wish to look for a home located near parks or trails. This way, you have easy access to take evening jogs without the hassle of travelling too far away.

As for houses you are looking to purchase as an property investment, while the aforementioned does still apply, it is largely dependent on the demographic you intend to rent the home to. However, there are a few places that are more popular than others. Houses situated near the Central Business District (CBD) area, industrial or business parks such as the Changi Business Park, Buona Vista Biopolis or the Punggol Digital District are likely to attract more buyers because it is near to where most people work. Not forgetting areas where expatriates tend to reside at include Holland Village, the East Coast and Changi area will garner more potential renters, likely because these areas are where universities are located at.

Conclusion

After reading through the guide, you should have a clearer understanding as to how you are able to upgrade from a HDB flat to a condominium. There are decisions you have to make such as knowing whether you intend to keep or sell your HDB flat, and if you do decide to sell it, the guide has covered the legal processes that you ought to perform with HDB. It has also mentioned the financial side of things, such as the computation of final proceeds, as well as the costs and the fees that have to be borne by both the buyer and the seller. 

There are also other options you can explore to fund your new condominium such as using your CPF and taking a bank loan, and whether you have to delve into your personal savings. In addition, should you be indecisive on which type of condominium you should purchase, there is a section which compares condominiums such as between an executive or private, a new launch or a resale as well as which locations are more desirable for you to be purchasing from.

If you are still unsure of what options are best suited for your next property upgrade, feel free to contact us for a no-obligation, free assessment report of the best options available to you.

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