Should I buy Condo or HDB ? – As a Single

Single and hitting 35 – Should I buy Condo or HDB ? 

35 is a special age for Singles in Singapore. It is the age when you are eligible to purchase a HDB flat. It is also the age where you start making headways in your career, earning a decent keep. 

With housing eligibility and funds in hands, you start considering your options.

• BTO / Sales of balance flats 
• Resale HDB 
• Private condo 

Questions arise as you ponder. Which of these can I afford ? Which housing option is most suited towards helping me achieve my lifestyle and financial goals ?

Well, that’s what this article’s all about, a basis for Singles to make wise housing decisions. 

Side note, if you are Single but below the age of 35, make a u-turn and refer to this article on Single below 35 years old purchasing condo instead.

We are – Decoupling Expertise

Before you commit the next 5 mins of your life towards reading this article, it helps to find out who’s behind the keyboard. 

We are a team of specialist realtors specialising in helping our readers research and shortlist investment properties for both homestay and investment objectives. 

Having noticed an information gap towards helping investment minded Single buy and select the right property. 

We seek to answer every real estate related query that a Single could have, with well researched content and non obligatory consults. 

Scoping it down for a meaningful discussion – BTO for Singles ? 

We have 3 options on hand, BTO, Resale HDB, Resale Condo. Clear decision making calls for focus, let’s eliminate one of these options. 

First off, do you make more than $7,000 per month ? If you do, BTO is out of the equation for you. There is an income ceiling of $7,000 for BTO application. 

Even then, at age 35 are you willing to wait for another 3 to 4 years for your BTO to be fully constructed ? Factoring in time taken to successfully bid for a BTO, you would be looking to get your first property at age 40/41. 

At a glance, other noteworthy BTO application criteria for Singles, applying under the Single Singapore citizen scheme as follows. 

• Income ceiling of $7,000 for 99 year lease BTO, $14,000 for a 45 year lease BTO
• Singles can only apply for 2 room flexi flat, essentially a hdb flat with 1 bedroom 
• Singles are required to pay an additional $15k premium on top of BTO selling price 

If you are wondering why there is a need for Singles to pay a $15k premium. According to HDB, BTOs are subsidised housing made for couples, the $15k premium is meant to cancel out the subsidised price offered to couples. 

On the bright side, based on the latest 2024 HDB regulation, starting from H2 2024 Singles will be able to apply for BTO across both mature and non-mature estates. 

Looking at the restriction and the long wait time, for most Singles looking for an immediate place to live in. It will be easy to first remove BTO from the consideration and focus on Resale Condo vs Resale HDB for now. 

Resale Condo vs Resale HDB 

Both provide an immediate place of dwelling for a Single. But yet each opens up a very different path in terms of future lifestyle and financial options.

Let’s lay out what each of this property type brings to the table.

Resale Condo

We will be scoping our discussion mainly around studio and one bedroom condo, the go-to consideration for Singles.

Lifestyle 

Lifestyle and standard of living is a very subjective construct. But in general, living in a one bedder in a private condo brings about a very different living experience compared to living in a HDB housing estate.

Privacy

Condo tends to offer a greater sense of privacy, units often located as point blocks. You will not have to deal with windows opening up to common corridors.

There are also fewer units at each level, providing a greater sense of privacy.

Neighbours 

Purchasing a condo in a particular development is somewhat like purchasing access to a community. Condos within a certain location offer exposure to residents or neighbours of different profiles.

This gets more profound as you purchase condos within city fringe areas. I.e getting a unit in a condo development in Newton, exposes you to a higher concentration of working professionals and the expat community.

Where else purchasing a resale HDB in a mature estate exposes you to a more diverse mix of neighbours. From your retired grandparents to your upstart families.

Exclusivity 

A resale condo is characterised by security guards, gates only accessible by access cards, basement car parks and private pools.

So in many ways the attributes of a condo provides you with a sense of exclusivity.

Amenities

As Singles, time to yourself,is one of the perks that you are entitled to. If you are the sort that enjoys swimming in a private pool and working out in a gym at your doorstep, then you would appreciate the facilities a private condo development provides.

Investment Upside

Let’s compare the investment potential of a resale condo to a resale HDB.

Assuming you were to purchase a resale condo vs a resale HDB in a city fringe location. Let’s review historical transactions to examine how much owners make.

Queenstown – HDB Profits – 55 Strathmore Avenue, 4-5 Bedroom Resale HDB

Queenstown – Condo Profits – Queens Peak, 1 Bedroom

Bishan – HDB Profits – Blk 115 Bishan Street 12, 4-5 Room Resale HDB

Bishan – Condo Profits – Sky Vue, 1 Bedroom

At a high level you would see condo owners making a higher average profit then HDB owners over a shorter average holding period.

The challenge of getting a resale condo in a mature estate, as an investment asset

HDB in the mature estates were specifically pointed out as due their central location with developed amenities. They are often the preferred HDB housing location for Singles.

But to a large extent the challenges articulated below are applicable across resale HDBs.

Decaying lease 

Decaying lease is often a challenge faced by Singles purchasing a resale HDB. As a general rule of thumb, a HDB with a short remaining lease presents several financing challenges to future buyers. 

This makes reselling the HDB increasingly more difficult as lease life decreases, compromising on its resale value. 

At glance, a HDB’s lease decay in accordance to the following timeline

• When HDB’s lease is less than 35 years – No private bank financing available for future buyers. Flat can still be financed with CPF and HDB loan
• When HDB’s lease is less than 30 years – CPF is no longer allowed for down payment, HDB loan is still available
• When lease is less than 20 years – HDB loan is not available at this point

Government Policy

Government has reiterated that HDBs are primed to serve as affordable housing options for Singaporeans, not investment assets. 

Hence, whenever HDB flats reach an elevated price point, the government will start rounding out cooling measures to cap its appreciation. 

The most recent government cooling measure stipulates the implementation of 15 months wait out period for private owners, before they are eligible to purchase resale HDB. 

This essentially seeks to taper off the flow of wealth from private property owners back to resale HDB, hampering price appreciation. 

On the flip side, private condos are able to tap on the wealth transfer from HDB upgraders. There are no restrictions on a Single or a family upgrading from a HDB to a private condo. 

In fact, one of the core drivers of private condo price appreciation are driven by HDB upgraders, re-deploying their profits and savings into a private condo. 

Flexibility 

When purchasing a resale HDB, you would have to fulfil a minimum 5 year minimum occupancy period. Within these 5 years, you are not allowed to sell the HDB or rent out the entire unit. 

On the contrary, there are no restrictions, restricting the sale of a private condo. The only downside is that you will be levied a seller stamp duty, if you were to sell your condo within 4 years of ownership.

Resale HDB

Having discussed the advantages of getting a resale condo, let’s explore the benefits of getting a resale HDB. 

Affordability 

Affordability is the greatest strength of a resale HDB, making a smaller quantum purchase reduces the financial burden that a Single undertakes. 

While lifestyle, privacy and investment upside can be a motivator for some Singles, financial freedom could be the primary goal of others. 

The lower quantum of a resale HDB gives you an opportunity to reduce or pay up your mortgage, potentially freeing yourself from monthly mortgage commitment. 

To put things into perspective, below is a table comparing the cost of a 3 bedroom HDB flat to a 1 bedroom resale condo.

As a side note, if you are interested in shortlisting a list of condos below 1 million in Singapore, refer to the article link inline. 

* Indicative prices are accurate as of the date of writing. If you are interested in getting an updated price list, do drop us a whatsapp message. 

Referencing the table above, a resale HDB is both more cost efficient in terms of per square foot pricing and overall quantum as compared to resale Condo. 

To put things into perspective, let’s break this down into affordability in terms of salary range and savings. 

To Purchase a 3 Bedroom Resale HDB in Queenstown. 

Estimated price – $750,000

To finance property (assuming you take a private bank loan for apple to apple comparison)

• 5% cash – $37,500
• 20% cash or cpf – $150,000
• 75% bank loan – $562,500

Transactional cost

• Buyer stamp duty – $17,100
• Agent fee (1% for HDB buyer) – $7,500

Funds required

• Total Cash or CPF – $212,100
• Total Loan – $562,500

Loan related consideration

• Salary to qualify for loan – $5,000 (assuming, age 35 and  no other loan application) 
• Monthly mortgage – $2,371 (assuming 3% interest, can be paid with part cash and cpf monthly) 

To Purchase a 1 Bedroom Resale Condo in Queenstown. 

Estimated price – $950,000

To finance property (assuming you take a private bank loan for apple to apple comparison)

• 5% cash – $45,000
• 20% cash or cpf – $180,000
• 75% bank loan – $675,000

Transactional cost

• Buyer stamp duty – $21,600
• Agent fee (0% for condo buyer) – $0

Funds required

• Total Cash or CPF – $246,600
• Total Loan – $675,000

Loan related consideration

• Salary to qualify for loan – $6,000 (assuming, age 35 and  no other loan application) 
• Monthly mortgage – $2,845 (assuming 3% interest, can be paid with part cash and cpf monthly) 

Space and functional layout

Inline with the earlier point, due to the affordable quantum of a resale HDB, you will be able to get a larger 3 to 4 bedroom resale HDB unit in an equally central and convenient location as a 1 bedroom resale condo. 

In terms of space the resale HDB option will triumph over the resale condo option. You firstly enjoy more space to house your passion and belongings. If you are a big collector of sneakers, bearbricks, aspiring urban farmer or pet owner, then a larger HDB flat will definitely address your need for space. 

From a hosting standpoint, you will be able to do a lot more in a resale HDB as compared to a small one bedroom condo. 

In terms of functional living, a one bedroom condo may be lacking in providing well partitioned living space for cooking, doing laundry and dining. Where else a larger 3 bedroom resale HDB would provide a dedicated area for each of these activities. 

Floor plan of a 3 bedroom HDB

Floor plan of a 1 bedroom Condo

Government Grant

For a private condo, you are left to finance it on your own. But for a resale HDB, there are several government grants you can tap on to reduce your cash or CPF outlay. 

Singles CPF Housing Grant

The singles CPF housing grant provides a payout of $40,000 for 2 – 4 room flat and $25,000 for 5 room flat. Payout to be credited into your CPF OA account. 

That is if you meet the following eligibility criteria

• Aged 35 and above
• First time applicant buying a resale flat
• Average gross monthly income not exceeding $7,000

Proximity Housing Grant

A CPF payout of $15,000 if you were to live with your parents, a payout of $10,000 if you were to live within 4km of your parents.

Enhanced CPF Housing Grant 

Payout in CPF based on income tier, only eligible if income do not surpass $4,500 per month

Insert image – table of Enhanced CPF Housing Grant

Putting aside the Enhanced CPF grant, assuming you were to earn an income of above $4,500 and below $7,000, you stand to qualify for over $50,000 in government grant. 

Summary – Attribute of Condo vs HDB at a glance

So should you buy a condo or hdb ?

So back to the big question: which option is better for you ? At the risk of sounding politically correct, I would say it really depends on which type of Single you are. 

To better articulate the consideration, let’s define some Singles archetypes. 

Single Profile #1 – Upwardly mobile and investment minded

If you are a Single that is career minded, working in a job that pays you well and foresee healthy progression in your career. Say you work in tech, law, pharma, cyber security, AI or finance. 

You earn a salary of above 7k, appreciate the lifestyle that comes with living in a private condo.

You are interested in leveraging your real estate as a form of investment and interested in progressing into a higher value private property in the future. 

Ideal Property = Resale Condo ( selected with due diligence for investment upside ) 

Single Profile #2 – Simplicity and freedom

You are the type that values simplicity, and most importantly prioritises financial freedom over absolute wealth. 

Your salary can range anywhere from $4,000 per month to $15,000 per month. But it doesn’t matter if a house to you is strictly a place of dwelling, you would rather be free from liability and travel the world. 

Ideal Property = Resale HDB ( optimise for affordability, pay off mortgage and be done with it) 

Single Profile #3 – Building a dream home

You are on a quest to look for a big home to build up your home dining business or to house you tools of passion like camera gear. 

To you a home is a place of retreat for your passion, hobby and life and you don’t really care about real estate investing. 

Ideal Property = Resale HDB ( large 4 – 5 bedroom, ample space for renovation and ID) 

Bonus – What happens if you have a partner after getting your own property ?

Let’s consider what are the implications if you were to get married down the road if you own either of the property types.

Resale Condo

• You will have to wait for 15 months if you were to buy a resale hdb with your spouse
• and you would have to wait 30 months to purchase a new ec or bto

Or 

• you can sell the one bedroom and buy a bigger condo
• you can both own one condo each, rent both out and rent a bigger condo or hdb to live in

Resale HDB

• you can sell the resale hdb and buy a bigger resale hdb
• if you do not plan to get married, you can each keep your hdb

Turnkey solution to put thoughts into action – Decoupling Expertise 

This article is 10 pages long, I was panting psychologically as I put the last word to this article. But your effort to put thoughts into action could be way easier. 

That’s why we created Decoupling Expertise. 

Our goal is to provide a fuzz free turnkey solution to help Singles purchase their first condo. 

Stating upfront, there are no fees involved in our consulting services. We earn our keeps by taking a “co-broke” commission from the seller of the property that you purchase. So there is really no cost on your side. 

Our suite of consulting service include

Singles home finances

• Singles budget and affordability calculation
• Helping Singles in IPA application
• Helping Singles overcome loan eligibility challenges
• Loan package comparison and advisory for Singles

Singles real estate strategy

• Property research and shortlisting
• Location selection
• Unit type selection
• Layout review for unit selected
• Negotiation and purchase of unit

Singles real estate planning

• HDB or private condo consideration
• Boutique condo or mainstream development consideration
• Solo purchase or joint purchase with other Singles
• First property flip strategy 
• Second property flip strategy

Feel free to drop us a text for whatsapp chat. No sales obligation, promised 🤞