HDB
While we don’t have data for buyers of new ECs yet, we’re certain that a quick visit to any show flat – along with conversations with some agents – will also reveal the popularity of ECs with HDB upgraders.
You may be wondering why that is, given that private condos tend to have more accessible locations (ECs are often further from MRT stations, barring the occasional exception like Parc Canberra). These are the reasons to consider:
Price
The HDB-like restrictions are immaterial to these buyers
Increasing number of ECs in better locations
1. Price and financing
Let’s get the most obvious factor out of the way: ECs are priced lower. This matters a great deal for HDB upgraders, especially as they need to take bank loans (there’s no HDB loan for ECs).
We recently received this particularly interesting question: Do you think it is worth to pay ABSD for second property (condo) and keep the first property (HDB) for a rental income? While that does mean incurring Additional Buyers Stamp Duty (ABSD), there are merits to doing so. Some would argue, for instance, that the rental income from their HDB flat could.
December 30, 2020
Stackedhomes
So you’ve owned a home, or perhaps even a second property, for quite some time. In the eyes of many, this leaves you set for life; but you probably know the truth by now: it’s not as simple as sitting back and letting the money roll in.
Every year, Singapore’s dynamic property market changes. Back in the 1990’s, your rent could have more than paid your mortgage.
In the early 2000’s, practically every HDB flat was a golden ticket to condo ownership in five years. In 2020 however, things have gotten more complicated – from Coronavirus to new housing policies, it’s tougher to tell where you stand.
Additional Buyers Stamp Duty (ABSD)
Can buy a second property without incurring ABSD.
No ABSD if you sell your previous home first, but you only end up with one property.
Property tax
Almost always higher, as you pay property tax on two condo units, and one is at the higher (non-owner occupied) rate
The usual owner-occupied property tax on your condo
Maintenance fees
Depends on the size of your unit, but almost always lower
Rental income
Zero unless you’re willing to rent out rooms
Income requirements
Less demanding, as both co-borrowers are splitting the mortgage
Initial cash outlay
Minimum cash down only on your next home