Are you thinking of moving from your flat to a nicer and bigger condo? What’s stopping you?
Despite the uncertainties brought by the Covid 19 global pandemic crisis, experts believe that the Singapore real estate industry will remain resilient. This is great news for both investors and homeowners. Here's a quick guide on how to upgrade from HDB to a Private Property in 2020.
If you’re looking to buy a private property in Singapore click here to schedule a free call back with me and let's talk about it.
First, Find Out Your Why
What is the reason for upgrading? This is the most important question you need to ask yourself before making a purchase decision.
Many people want to move from their residences because they want a larger space or a unit closer to work. Some want to escape their current living conditions to experience the amenities most condominiums offer.
Whatever your ‘why’, make sure that you have discussed it first with your spouse or closest family members. Moving is a big decision that can affect your finances. And the wisest thing you can do is to prepare for it through research and planning. Before moving, you need your financials sorted so that you can live the lifestyle you seek in the location you want.
When Should You Upgrade?
Upgrade when you can handle the cost and when you have finished your Minimum Occupancy Period or ( MOP).
Before you can upgrade to private property, you need to have a minimum occupation period of five years. This is the number of years you should have physically occupied your flat.
What a lot of people do not know and what you might be surprised at finding out is that a lot of people are sitting on a potential upgrading move without realising it.
Many feel like they need more cash in the bank, or are waiting for the Property price to rise higher before making a move. These are Property Myths that more often than not, set you back on Opportunity cost instead of bringing you true value.
If you make a decent income, have a good credit rating and enough money in your CPF, chances are, you have already fulfilled all the necessary criteria to make an immediate upgrade.
If you are not sure, click here to schedule a free call back with me and we can work it out.
Determine Your Budget
The biggest concern before purchasing a private property is, of course, the money.
Once you’ve worked out your finances and you’re in a good financial position then you can upgrade.
But before determining what property to purchase, ask yourself these questions:
What kind of apartment can you comfortably afford with the money you have?
Do you have any other financial options such as bank loans and CPF savings? What other considerations can affect your income or financial stability in the future?
After you’ve saved enough money for the property, you also have to consider additional costs that come with the unit. Aside from maintenance fees, home insurance, and utility bills, here two of the common expenses you’ll get:
- Minimum cash down payment – 5% of the property price or valuation
- ABSD (additional buyer’s stamp duty) – this is paid first if the condo is bought before the flat is sold. It’s reimbursed if the flat is sold within half a year.
When choosing the area to move you have to consult your ‘why’, as mentioned in the first part of the article.
If you’re moving for work, you’d want a place that’s near your office or at least near a station for an easy commute.
If you’re looking for luxurious living, choose homes with a grand view or units on higher floors or near coastal areas.
If you value your health, choose units with fitness centers, spas, and pools close by.
Each one of us has our own reasons for moving, so a good location depends entirely on your preferences and immediate needs.
You don’t just choose a unit because it’s cheap or because it has a beautiful interior, choose a property that aligns with your lifestyle and your goals.
I highly recommend making a list of the things you want in your ‘dream neighborhood’. Use this list as a guide when searching for your ideal location.
Types of Private Property
Do you want to buy an executive condominium (EC), a regular condo, or a landed property?
In Singapore, landed properties are basically any type of residential property where the owner has title to the land.
These types of properties priced higher than all other properties.
ECs are just like private condominiums but are less expensive and can be sold like a private condo once the MOP is completed.
ECs are properties for people whose salaries surpass the monthly income for public housing.
Private condos are just like EC’s in terms of the building construction and facilities.
The only difference between them lies in the selling price and law regarding who can purchase the properties.
For example, unlike ECs which have strict restrictions, private condos have few limitations. Most private condos can be sold to any national citizen or foreigners living in Singapore.
In the wake of COVID-19, many potential home buyers are having a hard time deciding if they should purchase a new property.
This is normal and understandable. Income stability and job security is a big risk at the moment.
However, this is also the time where many home buyers are making moves to secure their dream home.
If you're determined to learn how to upgrade from HBD to private property, we can help you get started.
Who knows, chances are, you are already sitting on a potential upgrade without being aware of it.