HDB or Condo?

Case Study of how a HDB owner can upgrade to a condo and own another one for investment!

Are you a HDB owner wondering if HDB owners can buy private property?

How to buy more than one property?

Is Property Investment still possible after all the cooling measures?

Is it better to keep your HDB and rent it out if you buy a private property?

Are you thinking of selling your HDB flat but not sure what to buy next, is it better to buy a condo or another HDB?

Let’s dive into a real life case study that will clarify some of those doubts.

Case Study of Alan & Agnes

Alan & Agnes own a fully paid up HDB 5 room flat in Punggol and has about $100,000 each in the CPF ordinary account.

They would like me to help them buy a 2room condo in the vicinity for investment while they continue to live in their HDB flat.

How to maximise their property portfolio:

This is how I worked out the sums for them .

If they were to take this opportunity to sell their HDB flat in Punggol at still high prices, they will be able to own 2 condos which have proven to have bigger increase in prices than HDB properties . Besides they are still in their prime years and they still have lots of earning power.

Assuming they keep the HDB & buy another 2 bedder condo, they have to come up with this amount of money:

Option 1-Keep the HDB flat & buy the 2 bedder condo

Assuming that the 2 room condo is $950,000

5% cash – $47,500

7% Additional Buyers Stamp Duties$66,500 as the condo is their 2nd property

Total cash from their savings: $114,000

15% from CPF -$142,000

3% Stamp Duties -$23,100

From Existing CPF : $165,100(They jointly have $200,000)


1) They have $550,000 locked in their HDB flat which they cannot use

2) They have to make sure that they have at $74,000 min sum in their CPF before they can use the rest towards payment of the 2nd property

3) They have to spend $114,000 of their savings and this will leave them with little reserves to buffer against any change in the property market.

Option 2-Cash out the HDB flat & buy 2 condos

If they were to sell their HDB which has more than doubled in price, they will take back:

Sale price of HDB= $550,000 (presuming cash take back is $300,000 & CPF returned to both account is $125,000 each)

Total cash + CPF =$550,000

Savings in hand =$114,000

Total funds at their disposal =$664,000

With the equity of $664,000 in hand, they can comfortably afford

1)to upgrade to a 3 room condo in the whether in the northeast or north of Singapore PLUS

2)buy another new launch 1 or 2 bedroom condo solely for investment

Calculation for buying of Condo 1 (in Alan’s name)

Cost of 3 bedder in Hougang : $1,150,000

5% cash is $ 57,500

15% CPF $ 172,500


Total CPF avail in his account: $125,000( from sale) + $100,000 from Ordinary Account

Total available CPF for purchase =$225,000

Less Stamp Duties (3%-$5400) = -$29,100

Less 15% of sale price =-$ 172,500

CPF left over to service future loan instalments =$23,400

Amount of loan = $920,000

Monthly Instalment $3175 (60% of $6500 monthly income is $3900)

Interest rate : 1.5%

Loan Tenure $30 years

Monthly Income: $6500

Cash in hand from sale: $150,000

Less 5% for purchase -$ 57,500

Emergency Savings $92,500

Calculation for buying of Condo 2 (in Agnes’s name)

Cost of 2 bedder from New Launch $950,000 (For example Riverbay in Bendemeer area) 5% cash is $ 47,500

15% CPF $ 142,500


Total CPF avail in Agnes’s account= $125,000( from sale) + $100,000 from Ordinary Account Amount of loan = $736,000

Monthly Income: $5000

Cash in hand as savings: $150,000(from sale)

Less 5% $ 47,500

Emergency Savings $102,500

If the rules are further tightened to lesser the amount of loan that one can take from today’s 60%(Total Debt Servicing Ratio), they may not be able to take loans of the above amounts.

In summary the advantages of cashing out on their HDB is:

1)Instead of owning 1 HDB for own stay and buy 1 condo for investment, they can pamper themselves to upgrade to a condo for own stay and also own a 999 leasehold 2 bedder at city fringe which they too can move into if they so wish.

2) They don’t have to pay 7% ABSD as they are buying 1 property each and not a second property in joint names

3)They are riding on the capital appreciation of 2 properties instead of only 1 property

4) They can still keep their cash savings of $114,000 for rainy days or another commercial property

If you would like to know more about how this can work for you, please call me at 90228919 for a no-obligation chat!

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