Skip to main content

Home: HDB or Private Condominium


Abbreviations: 

  • HDB = government housing developed by the Housing Development Board
  • PR = permanent resident 

As the saying goes, the grass is always greener on the other side. Many of my foreign colleagues lament that they are unable to get a HDB (only applicable for Singapore citizens and permanent residents) while the Singaporean citizen/PR will want to live in private housing at the very first opportunity, some even at their first job after graduating from college. Back to the question, why HDB or why not?

Simple reason is cost.

HDBs are typically lower in cost versus private property at the same area. Of course, there are million-dollar HDBs located at popular area such as Tanjong Pagar, Holland Road, Queenstown, etc. However, if you really compare both types of housing at the same area, HDBs are way cheaper. For instance, a 5-room HDB (approx. 112 sqm) at Holland Village area cost about $1.3 to 1.5M versus $2M for a 2-bedroom 75sqm private apartment.

The next best thing: grants for resale flats. If the monthly household income does not exceed $14K, it is possible to get the grants up to $80K (for 2–4-room flat) and $50K for 5-room or larger flats. No grants for private housing.

Next is loans: for private housing, you can only borrow up to a max of 75% and 5% must be in cash. Take the previous example, that is $100K cash upfront and loan is for $1.5M - you still have to come up with the $400K (later). For HDB, you can borrow up to 90% assuming you are taking the loan from HDB and $0 cash down payment (upfront cost is from CPF). Assuming you (and your partner) have worked a few years, that should be enough to get the HDB with “no money down”.

Thirdly, option fees: option fees for HDB BTOs are a flat amount of $2K regardless. For private properties, it is 1% for the option fee. Oh yes, for HDB, the $2K will be refunded to your CPF once you exercise your option for your HDB flat.

Another thing: interest rate. When I got my 2nd HDB about 5 years ago, I was ridiculed by many for taking the loan from HDB of 2.6% when the bank interest rate was 1.3%. Well, bank packages always (yes, always) revert to floating (fluctuating) interest rates after three to five years. Currently, the bank rate is 3.6 to 4.6%. HDB rate today is still maintained at 2.6% but not sure for how much longer…hopefully until I finish paying the loan.

Most, if not all, private housing comes with gym + swimming pool + carpark. These are part of the monthly cost, no matter if used or not. Err…most of my friends in private housing say they use the pool and gym probably 1–2x per month. Some even commented they cannot recall the last time they use the condo gym or pool. If you are a frequent user, then go private.

The only 2 good things about private versus HDB: resale and leasehold.

For HDB, you have to stay for 5 years (minimum occupation period) before you can sell or rent. No restrictions for private housing - you just have to pay the Seller’s Stamp Duty (as much as 12% if sold in the 1st year). HDB are all 99-year leasehold whereas for private, there are some which comes with 999 year or even freehold. Obviously, the 999-year and freehold are more expensive but if you are buying an ancestral home for future generation(s), then it makes sense.

Labels:

Popular posts from this blog

Time Management or is it really Project Management?

We have been told since young by others that in order to do something well, we need to have good time management.  As one who leads projects for a living who knows a thing or two about this, I will say that time management is a fallacy.  Purely speaking, time management  (just like managing people) refers to managing time in which we control time, i.e. we can accelerate it (to make it go faster), slow it down, or to stop time. We can do this with a lot of things but we cannot manage time - it continues to chug along, whether we like it or not. If you were to ask me the time and my answer is, say 9:00am, that time is already gone because it is 9:01am when you continue with what you are doing.  Time is like a freight train or a subway that we can only latch on to and hope we can do things within the allotted time. Ask the student who needs to submit the paper at 11:59pm Sunday night or the employee who need to submit the report Mon morning 9:00am.  In truth, what ...
Read more

The Mental You - Reducing Stress part 2

Just like there are always 2 sides to each story (the good and the bad), we can tackle issues in 2 ways - either head on or perhaps we can do something opposite altogether. The previous post is primarily concerned on how to overcome stress by reducing it. Another way is to focus on something totally unrelated to stress. So, rather than looking at fixing the bad, we focus on the good such that there is little room for the bad.  Let's work on this together... Positive Thinking  What do you see if you turn on the news, or start looking at social media? More often than not, aside from the beautiful people and cute cats, the news is mostly gloom and doom. There are wars and rumors of wars, climate change due to global warming causing floods, and other disasters, earthquakes at various parts of the world. So, it's no uncommon for us to no longer see the world in rose-tinted glasses but glasses with murky lenses. And yet, to reduce stress, this is the one thing we must do - to think ...
Read more

Parenting

How did you do it? This question has been asked by many of my friends and colleagues when they found out about my children. We had initially thought that what we went through is typical. But as we talked to more and more people, it is only then we realized that the journey is not so common after all.  Singapore has been ranked amongst the top countries in the world by PISA, short for the Program for International Student Assessment that is under the OECD umbrella. In some years, it is actually ranked number 1. In other words, to be able to get through the Singapore education system is difficult enough as it is.  The Journey to College  By the grace of God, both my kids did well in the system by being selected into the Gifted Education Program (GEP) - for the top 1% of students - and then getting into Raffles Institution (supposedly the number 1 school in Singapore), and achieving straight As in the Singapore-GCE Cambridge "A" levels, and then receiving offers from a few o...
Read more