Single & Over 35, Now What?

Single, over 35, still living with parents and suffering the brunt of a triple whammy? Strong desire to have your own place but don’t know where to start, how to start and wondering if you can even afford it? Well, you’ve come to the right place! Today, we’ll give you a low-down of the options that you have.

Purchasing a house is a huge decision that involves time, effort, research, knowledge and most importantly, well, money. There is a lot of information out there on the various property types. BUT, is there someone to really recommend and advise you based on your wants and needs? Read on...

If you are looking to stay long–term...

A quick search will show you the type of government housing that singles can currently buy. For BTO, singles are excluded from mature estates and prime location housing (PLH) estates. In the 2nd half of 2024, singles will be able to buy 2-room flexi BTO flats in all locations under the standard, plus and prime schemes, subjected to prevailing MOP, resale conditions and levy. There are currently no changes to resale flats. More on new btohdb schemes below w.e.f H2 2024.

Source: https://www.mynicehome.gov.sg/hdb-how-to/buy-your-flat/what-are-standard-prime-and-plus-hdb-flats/

What does this mean?

If you’re looking to BTO, yes you will have more options to choose from. For plus and prime units, however, the MOP period has been increased to 10 years, with a resale levy imposed. This means that the 2nd owner needs to be okay with a house with a shorter remaining lease when you decide to put up your house for sale in the resale market after the MOP is met. Your potential profits will also be reduced with a resale levy imposed. With a 10-year holding period, the maximum loan that you can get for your next property would also reduce, because you would have been at least 13 years older (3 years to build + 10 years MOP).

For resale HDBs, there aren’t any new regulations imposed for available properties in the market, except for PLH projects (which will be built in the next 3 years + MOP = available in 13 years’ time). No short-term impact for now, though we foresee potential higher prices for resale HDBs in the future which are nearby prime and plus developments. If you fulfil the conditions, there are also available grants for your resale flat purchase. Do bear in mind the age of the house as it will a) determine the amount of loan you can borrow, hence affordability and b) the condition of the house will impact your renovation cost.

Here at HomeGen, we strongly believe that apart from being a roof over your head, a house can actually be an important stepping stone to building your wealth and contributing to your retirement. So, do make sure that you take the crucial first step in the correct direction!

Having a house, and a roof over your head is great. But won’t it be better if a house is not just a roof, but also provides an important stepping stone to building your wealth?

Too many mind-boggling questions? Let’s break it down and first look at newly-MOP BTOvs resale HDB flats in Queenstown. We’ll also share potential capital appreciation options that you can consider later part in this article.

Brown line: New BTO flats (4-5 room) TOP 2014 – 2015 in Queenstown

Purple line: HDB flats (4-5 room) TOP 2000 onwards in Queenstown

You’ll see that the average PSF of a newly-MOP BTO is higher than that of resale units. With the numerous government grants, newly mop units will profit more than resale, especially with the first mover advantage, where you will not have to pay for the profits of all the previous owners combined.

However, do bear in mind that there is a minimum 8-year waiting period for your BTO to hit MOP (3 years of build time + 5 years MOP). For flats under the new prime and eventually plus schemes, the total waiting period will be 13 years (3 years build time + 10 years MOP). This would be a waste of youth and time = lesser maximum loan you can borrow for your next property if the age you fully service the loan exceeds 65 years, impacting affordability. For this cause, there is a huge impact!

Brown line: New BTO flats (4-5 room) TOP 2014 – 2015 in Queenstown

Purple line: HDB flats (4-5 room) TOP 2000 onwards in Queenstown

Blue line: 99-year leasehold condo, TOP 2014-2015 in District 3 (Queenstown, Tiong Bahru)

Now, let’s look at the performance of condos which TOP in the same period. You’ll see that the psf is substantially higher. With no MOP restrictions, sellers will be able to roll their profits and proceed to the next property after fulfilling the 3-year SSD, which is well within BTO’s MOP.

If you are looking for potential capital appreciation...

Average psf in the past 10 years have seen condo on an upward trend, with hdb relatively stagnant up till 2020 when prices started rising for the entire property industry. This doesn’t come as a surprise as the government has always set out to make public housing affordable and accessible for all. There are definitely exceptions with Pinnacle, Queenstown areas, rare executive apartments, maisonettes, loft hdb units transacting at record breaking prices.

What does this mean?

Rare hdb gems aside, condos generally provide better rental yield, and potential capital appreciation if you buy into the right project at the right time.

Blue line: Treasure at Tampines price since 2019 launch

Orange line: D18 condo prices (99 yrs leasehold)

Take Treasure at Tampines launch for example. This mega development was launched in 2019, with a recent TOP in 2023. You can see that the PSF for Treasure is on a sharp upward trend. Buying into a new launch condo gives you first mover advantage, the profits you get from selling will be yours, and you do not have to account for any profits made by the previous owner, because there isn’t one. Also, you get to enjoy brand-new facilities and amenities, having the choice to move in or rent out. In general, brand-new units usually fetch a higher rental yield. With a longer lease remaining, you won’t have the stress of a decaying lease (yet). No pressure to sell. You can sell your new condo unit during sub-sale or TOP. Did you know that there is also a magic number where we see development prices rise again after TOP?

Do you also know that there are actually condo units you can buy that do not have to be brand new with potential resale capital appreciation? Especially if we are looking to match the timing for you since brand-new condo developments usually require a waiting period of about 3 years for the project to be built.

Let’s now do a case study on some condos in D19.

PSF for High Park (TOP 2018) has been increasing steadily over the years. This means that people who bought into this project 3 years ago are still making profits to date.

For Compass Height (TOP 2002), the prices have been almost stagnating, largely due to decaying leases and many transformations in the area. For the newly launched condo The Florence Residences (TOP 2023), you can see that the prices have been increasing exponentially. For your first property, a safer bet would be newer/ new launch condos so that you can enjoy the 1st mover advantage without having to worry about decaying lease or previous owners profiting from you. That said, not every new launch project and layout will give you the profits so please exercise due diligence and research beforehand.

Convinced? Not convinced? Want more information and ready to start your property journey as a single, empowered individual? Reach out to us today and we will be happy to talk to share more. If you have other thoughts and opinions, we are happy to engage in a friendly banter as well!

Disclaimer: When considering the purchase of a property, it is crucial to take into account individual needs and purposes. This report includes comparisons of several condominiums belonging to different age groups. While concerns about properties reverting back to the state upon lease expiration are valid, it is important to carefully assess such possibilities. The intention is not to suggest that only older condos serve as superior investment instruments. Regardless of the property's age, attractive opportunities can arise if one effectively times and executes their market entry and exit strategies. Additionally, it is essential to consider macro factors such as buyer behaviours and profiles. It is worth noting that the peak performance of these properties may not necessarily align with the timeframe of our study.