5 min read

The high cost of getting your property purchase wrong in Singapore.

Do you need to wait a few more years to afford a condo? Or are you just unsure? Then you may just want to wait.

There are people – some of them industry professionals – who will tell you that’s bad advice. The cost of private properties increases every year, rises faster than HDB flats, etc. By now you’ve probably seen the “HDB vs. Condo price gap” chart a million times over. And I’m not saying they haven’t got a point:

Yes, it’s true that waiting longer probably means paying more for your private property. But the thing is, paying a bit more is much less painful – and less risky – than buying a condo when you’re not ready.

Case in point: young, over-eager buyers who jump into the first condo unit they can afford, even if it’s just a one-bedder. They may not even be staying in it, just looking to rent it out while they’re still living with parents, a partner, etc. 

And if it’s not the investment prospects, there’s the appeal of being able to say you live in a condo in Bugis, Anson Road, Holland V, etc. Even in 2024, this really is possible for under a million dollars, if you stick with a one-bedder. 

But what really came to mind to me was this, when I wrote about the craziest property flipping piece recently:

There’s no undo button if you buy a condo before you’re ready.

Unlike the earlier years where you could buy a property and sell it the next day if you suddenly had cold feet, or stayed for a month and realise that quiet living next to the forest isn’t for you – you don’t have that luxury today. 

First, there’s the Sellers Stamp Duty (SSD). Sell within the first three years of buying, and you’ll be taxed 12%, 8%, and 4% of the sale proceeds on the first, second, and third years respectively. 

Second, consider that the sale proceeds may not also cover renovations. If you’ve blown $30,000 to $50,000 renovating your shoebox unit, don’t assume you’re getting it back when you sell. It doesn’t matter how new the renovations are: I’ve seen homebuyers tear down renovations less than three years old because they want to make it their own space. 

Third, unless you’re 55 years old and downsizing to a smaller flat, there’s a 15-month wait for you to buy a resale flat. If you don’t want a resale flat that’s pricier, older, and requires more renovations…good luck, because you need to wait 30 months before you can apply for a BTO flat. 

So consider what happens if you buy a one-bedder, and a short while later you meet the right person. You want to move in together, start a family, etc. But a one-bedder isn’t big enough for that; and you can’t get a flat while you own a private property. So this forces you to sell the condo, possibly in a downmarket. 

There’s a real risk that the financial damage is so significant, you would have been better off just waiting a few more years. 

As such, regulations such as the SSD or MOP make it even more important that you get that decision right – if not, it would become a big regret. 

In other news, HDB is piloting a new layout: an open-concept unit without partition walls. 

This design, which is also beamless, can be found in the Kallang-Whampoa area, sometime during the October BTO launch. It’s called the White Flat Layout, and it gives the home buyers total flexibility in how they customise their units. 

I see this as a nod to smaller families and lifelong singles. For the past decade, Singaporeans have had fewer children, with many opting to stay single, or as a couple for life. For this group, it may be preferable to have a bigger living room, study, or specialised room (e.g., music studio or home gym), rather than an added bedroom. 

However, the question is whether this adds to the complexity of renovations (not necessarily in terms of monetary cost, but also time required). And we’ve long heard that having more rooms is generally better for resale gains; most people want more bedrooms, not fewer. Overall, I think the new concept may appeal a little less to families, but more to couples and lifelong singles. 

Interior Designers are going to throw a party over this though. Finally, versatile and easy-to-work-with layouts!

Meanwhile in other property news:

• There are some harsh truths about the Singapore property market that need to be addressed, but the quicker we accept it the better. 

We compared the profits of one, two, and three-bedder condos to check out the returns. Here’s what we found.

Weekly Sales Roundup (20 May – 26 May)

Top 5 Most Expensive New Sales (By Project)

Top 5 Cheapest New Sales (By Project)

Top 5 Most Expensive Resale

Top 5 Cheapest Resale

Top 5 Biggest Winners

Top 5 Biggest Losers

Transaction Breakdown

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