What is a HDB Negative Sale and why should you care?

Or in other words, “Why did my flat price increase but I did not get ANY cash from selling my flat?”  

It’s a strange situation to think that you don’t get ANY profits from selling your flat – despite putting thousands of dollars in it every year, but yes it is happening AND it can happen to you. 

Putting money into a stagnant property is like pouring into a leaking bucket - HDB Negative sale

Is your own property a leaking bucket? 

How does a negative sale happen? 

A hdb negative sale happens when the flat prices increases at a rate that is slower than the amount of interest you paid to HDB (2.6%) or the bank (check with the bank for the amount you paid, 1.3 – 3%) AND  the CPF accrued interest of 2.5%.

To get any cash profit from the sale of your flat, its roughly estimated that your flat needs to have an annual capital appreciation that is more than the HDB interest rate and the CPF accrued interest rate i.e. an annual capital appreciation of 5.1%. If this doesn’t happen, your returns may get locked into your CPF. In addition, because of the minimum sum requirements,  usage for the next flat might also be limited (*this happens if you are planning to do downgrade after 55)

Singaporeans have the assumption that they can easily cash out on their HDB flats as source of retirement income when they sell their bigger flat and downsize to a smaller one. However this has not been the case recently.

Because of the stagnant market, quite a number of HDB homeowners have discovered that they do not get any cash profits from the sale of their flats and they are sometimes unable to down grade to a smaller resale flat due to the lack of funds. Their only option is sometimes a limited lease 2 room BTO from HDB, which takes times since it can only be purchased at BTO launches and SBF sales, although there are more options at ROF selections now.

What is a negative HDB sale

This is the sales cycle of HDB prices since 1989. If you are counting on holding on your flat until the next wave, you might be waiting for a very long time. Will your flat reach the 40 year depreciation dive then? 

Who has profited the most from their HDB?

  1. People who bought flats in the good old days and flats have appreciated 200 – 300%.  This is fairly common for those who purchased flats 20-30 years ago. However, it would be illogical to think that HDB flat prices can increase to more than 1 million. 
  2. People who pay for their flats in cash. If cash was used to pay for the flat, the returns would also be in cash. They are also not subjected to 2.5% accrued interest in CPF.
  3. People who focused on growth properties (Both HDB and private). There are some people who selected their home based on how the property can appreciate.
  4. People who accepts that their own home can never be an investment, but a rental property definitely is.  

How does this affect you?

What should i do if my flat is experiencing a negative sale? 

There is no one size fits all step for everyone experiencing a negative sale. If your flat has reached MOP or is about to reach MOP, you can read more about your options here.

 It's important to understand what you are going to do next before rushing to sell your flat.  While some people can benefit from asset progressions and focusing on growth properties. Some might benefit from cutting their losses and fully paying off their loans. 

We provide free consultations for those who are unsure about what to do next. Please text us at 96918885 to book an appointment today.

Can Your CPF Disappear? HDB Negative sales and the pitfalls.

Can the CPF that you earned disappear? Sadly yes.  

If you have been using your CPF to pay off your property, we have bad news for you.  In a stagnant or depreciating property market, we've seen cases of CPF that you've earned 'disappearing' from our client's accounts. If you are planning for your HDB to be your retirement plan, our advise is to think again. Read our article on why your HDB should not be your retirement plan.

No we are not just referring to the CPF accrued interest i.e. the funds that you would have earned, had you left that amount in your OA instead of using it for your mortgage payments. (Read the clarification on this on the Factually website. See Myth 2.)

Here's how it can happen.


Recently, I did a consultation with a young couple who were planning on selling the first resale flat they bought i.e.;

  • a 4- room resale flat in Woodlands/ Admiralty, which they bought about 5 years back.
  • They bought it at the peak of the resale market and prices have declined since then. They bought the flat at $409 000 and their remaining loan amount was about $250 000.  The estimated flat price now based on recent transactions and valuation is $320 000.
  • The CPF used by both parties for mortgage payments amounted to about $190 000 and the accrued interest amounted to about $30 000.

To break even, i.e. to not lose any money, they had to sell the flat for about $495 000, which in the 2019 Property market, would be quite impossible, as that might mean a COV (Cash Over Valuation) of about $175 000 for the buyer.  ( Yes, there can still be COV in the HDB Market. Check out this article to understand how it works).

If the the couple sold their flat at market rate, this would mean a negative sale of $150 000. Since their accrued interest was about $30 000 ( and since some claim that accrued interest is negligible anyway), their CPF contributions of about $120 000 just disappeared into thin air. 

Can you imagine?? $120 000 of your hard earned CPF just disappearing like that. They were only left with $70 000 of their CPF to use for their next purchase.

How did $120 000 of their CPF disappear?  

  • There was a steep decline in their flat prices. The flat’s location was in Woodlands and combined with an influx of new flats in the area, the price of older flats fell.
  • To profit from the sale of your HDB flat, you would need a growth of at least 5.1% each year. ( 5.1% is derived from 2.6% HDB interest rates and 2.5% accrued interest rate). The HDB resale market has been stagnant recently.
HDB Resale Prices Index
HDB Price Falling 2019

What can you do to protect your CPF or your assets? 

  • Pray that the HDB Market improves. ( We’re not sure if this works but no harm trying right? )
  • Figure out if you have profited from your current flat. ( For flats that just reached MOP, you might want to check out this article to figure out what you can do next)
  • Figure out a suitable asset growth strategy, based on your age and lifestyle to see if investing in an asset which can appreciate would be suitable for you.  ( We don't recommend upgrading to everyone)
  • SMS/ Whatsapp/ Call us at 96918885 for a free consultation and a customised plan on what to do next. No obligations, we promise. We’ll customise a plan to suit your needs.

My flat just MOP (minimum occupation period), what are my options?

HDB Resale Minimum Occupation Period (MOP)

Congratulations on your HDB flat reaching the Minimum Occupation Period or the MOP !

If you got a BTO, it's probably been 8 - 9 years since you applied for one. (i.e. 5 years since you collected your keys, 2-3 years since you got a ballot queue number and about a year applying for and getting the news that you have a queue number to select a flat) and hey you deserve more than a pat on the back for your patience ! BTO flats usually appreciate by the time they reach the MOP (unless you are one of the unfortunate ones hit by HDB's racial quota policies) and owners who choose to sell their BTO would probably be able to get some cash out of their investment after deducting the outstanding loan and the CPF refund. 

For resale flats, it's probably around 5-6 years since you've decided to get one. Profits, however, depends on how long ago you purchased the flat and the price that you paid for it. Demand for resale flats are picking up although prices are not as high as during the peak. 

But enough about the state of the HDB market . 

Although the end of the MOP signals that you can sell off your flat, the focus should not just be on how much cash you can get out of it. Instead, the focus should be on how to use what you have to profit further, or at least put it into another investment which can give you better returns.

HDB MOP Minimum Occupation Period

You've hit the MOP - What's next?

You may be confused about the choices that you have. Should you upgrade, should you downgrade? Will you get the same kind of profit appreciation if you stay put? Is there a chance that your profit might decrease?
Are there any other housing types which will allow you to experience the same kind of appreciation that you got with that BTO? 

So many questions, so many options.

Factors affecting your next decision. 

 If these are your concerns and you’re wondering, “ What should I do next?”, read on. We've listed below some of the next steps you can take once your flat reaches MOP. Of course, not every option is available to every on as it is dependent on a few factors. Some of these important factors include. 

A) Cash sales proceeds (if any)

Will you get any cash proceeds from the sale of your flat or is it a negative sale? Does your unit face ethnic quota restrictions which might affect your cash proceeds or how fast you can sell your flat.

B) Your current CPF Balance and your minimum sum amount. 

CPF can be used for the downpayment of your unit as well as other expenses like legal fees and stamp duty. Even if you are young and will not be approaching retirement age very soon, you need to know about your minimum sum amount if you want to use it to fund the purchase of your second property. 

C) Cash for downpayment

You will need some cash if you plan on taking a bank loan. If you are planning to take a loan, the minimum amount is 5% of the property price. If you have an existing mortage, the amount can be up to 25% of the price of the next property. 

D) Resale Levy

For some people, the resale levy payable by cash is a game changer. The resale levy is applicable to the next subsidised flat or EC, if you took a first-timer HDB grant on if your first purchase. The amount you need to pay depends on the size of your first flat. 

E) The loan you can get for your next purchase

The amount of loan depends on your current salary, your age, and the number properties you own that is still under a mortgage. This is known as the LTV or the (loan-to-valuation).

F) Your Timeline

One of the main determinants for getting a BTO, new launch or resale property is your timeline.  Appreciation is usually larger when you purchase a unit at a new launch rather than one that's ready for occupation. 

G) Other plans 

For some parents, factors like primary school enrolment is a factor to move house. 

We understand that selling your property is a huge investment. If you are still unclear about what to do next, we are here to help. Send us a msg at 96918885 if you'd like to find out more about the following : 

1) Current valuation of your flat 

2) Which step would be most suitable for you and your family? 

Even if you still haven't made up your mind regarding what to do next, don't worry about it. We are here to answer your queries.  

Some options you can take after your flat reaches MOP

1) Review your family situation ( and finances) to see if there is a need to rightsize /upgrade /downgrade to a bigger or smaller flat.

HDB resale calculations

For most of our clients, having a comfortable home for their family is the priority. Since the time you bought the flat, your family size and structure may be very different from what it is now. Whether it's because your family has grown, whether its because your children have left the nest, or that your parents have moved in with you, we understand your need for a change. ( If you just want to move closer to family and take advantage of the Proximity Grant, we've covered that in point 2) 

If you are looking for a bigger flat to accommodate a growing family or so that you can bring your parents to live with you, you might want to consider a resale flat in a mature estate. The size of a resale flat is typically larger in a mature estate where you would see flat types like Executive Apartments, Maisonettes, or even 5A size flats that suit your growing family. On the flip side, if you are downgrading, you might want to consider 3 room flats in a mature estate or even a 2-room flexi direct from HDB

2) Move closer to your parents and enjoy a $20 000 discount off your next resale flat (i.e. the Proximity Grant)

Proximity Grant HDB

Even if your parents aren’t keen to move out of their home, you can do them a favour and move closer to them. In fact, the Government encourages this and is willing to put their money where their mouth is.

The $20 000 Proximity Housing Grant (PHG) is a one time grant for eligible Singapore Citizens who move within 2km to their parents or to the estate where their parents live in. (Singles, we're sorry, a different set of rules apply to you for the PHG)
Can't decide between which parent to move closer to? Move closer to one set of parents and then move your in-laws closer to you, just because parents can also receive the $20 000 grant by moving close to their married children! This solution is perfect if one set of parents wants to downgrade - however, not all estate have smaller flats, so do your planning first. For e.g, Pasir Ris Estate does not have 3 room flats apart from the ones in Pasir Ris One.

3) Apply for another BTO

Once you have reached the MOP, you are able to apply for another BTO ( all Singaporeans are eligible for 2 new units). However take note of the following restrictions. 

  • You would have to pay a resale levy in cash. The amount ranges from between $15 000 to $ 55 000 depending on your first flat size.
  • If you choose to take a second HDB loan, half of the cash proceeds (if its more than $ 40 000) from the sale of your first flat, will have to go to paying for the second flat. 

4) Upgrade to an EC while there still are ECs without the Resale Levy

EC without Resale Levy Executive Condo

If you want to upgrade your lifestyle by living in a development with facilities, but do not want to be tied down with a huge mortgage, you might want to consider getting an EC. Since you have purchased a flat directly from HDB , you will be subjected to the resale levy of between $15000 to $55 000.  

Why should you consider purchasing an EC? Apart from the facilities, you enjoy a fully renovated & move in ready unit in a brand new development. Prices of ECs also usually rise substantially after the 5 and 10 year mark, making it a good alternative for property appreciation compared to stagnant resale HDB prices. 

2019 Update : ECs with No Resale Levies have completely been sold out and the supplies of ECs in general are very limited.  Check in with us for an updated list of available EC units. Meanwhile,  read more about Executive Condos here. 

5) Get an investment property while the private market is stagnant

We Asians love our properties. In fact, it is usually the ultimate dream to grow our wealth by owning multiple properties and renting it out for passive income.

If this is your goal as well, you might want to take a look at the available properties on sale while the market is cool. 

If you've been keeping up with the Singapore property news, you should know that the cooling measures (latest one in July 2018) has done its job pretty well to keep the market stable. Prices of property have not drastically dropped and doesnt look like it will anytime soon. In fact, the cooling measures show that demand of property in Singapore is still going on strong. 

This might be your opportunity to get an investment property while the market is cool. You may also choose to purchase a condo or a landed property for your family to live in while  you rent out your HDB.

Worried about the slow rental market? Get a new launch condo to ride it out and pay only a fraction of the monthly mortgage i.e the progressive payment plan (see below), while the development is still under construction.

Progressive payment schedule for new launches

Example of a progressive payment plan based on a $700 000 unit at an interest rate of 1.8%.

6) Stay put and enjoy the capital appreciation of your flat! 

If you bought the BTO during the launch, it is highly likely that you have enjoyed capital appreciation, i.e. the value of your flat has risen and you will be able to make a profit when you sell it off.  Since this remains 'virtual money' until you cash it out, some might prefer to sell and use the profits for another property which would experience another capital appreciation

If this is not your strategy, then sit back and enjoy the capital appreciation ! However, we strongly don't recommend using your HDB as a retirement plan as the HDB market might not appreciate enough to cover the accrued interest that has to be paid back to your CPF account. Click here to read more about this.

We understand that real estate is a huge investment. If you are still unclear about what to do next, we are here to help. 

Send us a msg at 96918885 if you'd like to find out more about the following : 

1) Current valuation of your flat 

2) Which step would be most suitable for you and your family? 

Even if you still haven't made up your mind regarding what to do next, don't worry about it. We are here to answer your queries.  

Cooling measure changes and how you can benefit from it

Seller Stamp Duty SSD Changes

Changes to SDD, TDSR and Stamp Duty for Companies (PHEs)

On 11 March 2017, The MOF and MND released a joint statement regarding changes to the cooling measures currently in place when you purchase property in Singapore.

These are :

1) Reduced Sellers Stamp Duty (SSD)

Properties purchased after 11 March will be subjected to a reduced holding period that is subjected to the Sellers Stamp Duty. (i.e. 3 years instead of the 4 years currently in place) as well as a reduction of % points . See table below. 

2) Changes to the TDSR limit for those planning to take out an equity term loan using their current property.

The current TDSR framework has limited an owner's ability monetise their properties in their retirement years, i.e. to borrow against the value of their properties to obtain additional cash. Therefore MND will no longer apply the TDSR framework to mortgage equity withdrawal loans with LTV ratios of 50% and below.

3) A new Stamp Duty Treatment for 'Property Holding Entities' (PHEs)

Companies owning properties are now subjected to a higher stamp duty rate, in line with the stamp duty rate for individuals. 

Since changes 2 & 3 only applies to a select group, we shall talk about it in a separate blog post .

Seller stamp duty changes

The sellers stamp duty has been in place since Feb 20, 2010 to prevent investors from making a quick profit in a rising market.

When times were good previously,  there were instances a single property could change hands multiple times within a few days, earning the flippers a good deal of money and creating a runaway housing market that the government was later forced to control.

​To curb this, the Government introduced the Sellers Stamp Duty which forced the seller to pay a percentage of the property's selling price to the government, thus reducing the sellers profits. Although it was not one of the most effective tools of the entire cooling measures in the government's arsenal, it contributes to an investor's hesitation to purchase a property, since they will not be able to sell it off if quickly if he loses his holding power.

​The Government announced that for properties bought on or after 11th March 2017, there will be a reduction in the holding period as well as the amount of stamp duty/percentage points of the SSD as shown in the table below :

Holding Period

1 year or less 

Between 1-2 years

Between 2-3 years

Between 3-4 years

Between 4-5 years

From Feb 2010 to 
10 March 2017






From 11 March 2017






How the changes can benefit you.

As of now, we believe that the changes in the SSD may have an impact on new launch properties or those that are still under construction. Smaller units that are meant for investment may experience the biggest impact.

[Analysts from the straits times seem to think so too. Click here for the article.]

The Seller stamp duty or the SSD starts from the day you exercise the Option To Purchase or sign the Sales & Purchase Agreement. This is regardless of if you purchase a new launch, a property under construction, one that has just TOP or a resale unit. 

[In contrast, the 5 year holding period of a HDB flat or the MOP, starts from the day you receive the keys, not while its under construction]

Therefore, the changes in the SDD can benefit you if you purchase a new launch, due to the following factors :

1) Reduced risk of not being able to rent the unit out in a slow market.

This means that the SSD period for buyers of new launches would be mostly during the construction period, taking away some risk from the owner, i.e. the risk of not being able to rent it out in a slow market.  Your profits would be through the capital appreciation that a development happens from launch to TOP, since not all buyers out there are willing to wait 3 years for a place to stay. 

To maximise your profits,  you should choose a property that is in an area that is either going through gentrification or one that MND has earmarked as a 'growth area'. Examples include Park Place Residences in Paya Lebar or Parc Riveria in the Jurong Lake District.  [ Other growth areas include Woodlands Regional Center and the Punggol Creative Cluster. ]

At the same time, we would advise against just purchasing a random property that under construction. Although this change cuts your risk, you should still stick to the fundamentals of purchasing a property at a good entry price and one that can easily be rented out. Not sure which properties to look at? Sms/ Whatsapp 96918885 so that we can give you proper advice. 

2) Lesser "Capital Outlay" via the progressive payment scheme if you purchase a property at a new launch.

Investors can also opt for the Progressive Payment Scheme when you purchase a new launch.

The progressive payment schedule for new condo launches are as follows: 

Progressive Payment Scheme for new condo launches

The monthly amount you pay depends on the stage of construction of the unit you purchased and monthly outlay can be as little as a few hundreds each month for the first few phases of construction. We've done up an example based on a $700 000 new launch unit. This can be via cash or CPF depending on your situation. 

Progressive payment schedule for new launches

3) Prices at launch are the usually the cheapest.

If you are wondering why there are still crowds at new launches, this is probably why. Buyers are willing to brave the crowd and wait in line to ballot for units during launch date because they are able to get their pick of the best units at a good price. Prices for good units tend to increase once supply decreases and the closer the development is to TOP.  

These are probably part of the reasons why, despite the cooling measures in place, new launches have experienced brisk sales at launch date. 

Thinking of benefiting from the changes? We suggest you take a look at new launch properties in growth areas, especially Park Residences at Paya Lebar. SMS us at 9691 8885 to book an appointment slot and a VIP pass to view the showflat before the official launch date.

Preview Period : 11th - 20th March 2017. Targeted Launch Date 25th March 2017.

Park Place Residences

Click here to find out more about the development or SMS/whatsapp us at 96918885.

Are developers becoming increasingly creative? OUE and the deferred payment scheme

Developer Discounts Property

1. Will creativity help the Singapore Property Market? 

Tough times call for creative measures and this exactly what this developer did.

UOE announced last week that they were offering 2 schemes to sell off the remaining units of the UOE Twin Peaks located on Leonie Hill Road in District 10. Rather than slash property prices to bring in buyers, the developers have decided to offer 2 creative payment methods to buyers in hopes of selling more units before they have to pay the ABSD and the extension QC charges for unsold units in 2018.

Straits times article : UOE Twin Peaks 

2. What is the OUE Twin Peaks selling scheme about?

a. Scheme 1

In the first scheme, the Buyer puts down a 20% downpayment for the unit he wants to purchase but he will only sign the Sales and Purchase (S&P) agreement ( $1000 ) at the end of the year (instead of completing the sale in about 2 weeks to 1 month i.e. the normal procedure. )

This scheme allows the buyer to lock in the purchase price, eventhough the sale will only be completed at the end of the year, where developers and experts predict the ABSD might be reduced or even removed. (Note: The various Stamp Duties is usually due upon the sale completion i.e. signing of the S&P)



  • You get to lock in the price and not be affected by price increases if the ABSD is removed/ reduced at the end of the year
  • (Analysts predict that removal of the ABSD will result in an increase in price, because of suppressed demand )
  • Instead of 5% cash deposit, you will need to pay a 20% cash deposit. 
  • If ABSD is not removed, its pretty much the status quo. You will still need to pay the ABSD if this is your second or third property and alternatively market forces might have allowed you to purchase a sub-sale unit at a cheaper price.

b. Scheme 2

Buyers will have to make a 20% downpayment first and sign the sales and purchase agreement (another $1000 ) as per normal but the loan payments/ balance payment can be deferred for another 3 years.

This is known as the deferred payment scheme.

However, since the S&P has been signed, buyers would have to make the payment for the various stamp duties as per IRAS’s timelines.



  • With no monthly mortgage payment, buyers who are purchasing a unit to rent out will not be pressured by the weak rental market.
  • These buyers can technically underbid all other landlords who are renting out their units in the same or neigbouring developments. The rent collected for the next 2-3 years adds directly to your profits.
  • If the overall property and rental market improves in 3 years time, owners would have bypassed the worst of times.
  • Instead of 5% cash deposit, you will need to pay a 20% cash deposit. 
  • The property price is increased by about 3-9 %
  • You will still need to make the ABSD payments.

What is the Deferred Payment Scheme (DPS) ?

The deferred payment scheme is basically a scheme which allowed buyers to put off a bulk of their mortgage payments until the building was ready for construction. This was popular in 2002 to 2006 but was removed in 2007 when the market started heating up. 

Currently the deferred payment is only available for Executive Condominiums.

Why is UOE able to do this? Will other developers follow suit?

UOE is able to do this because the property has received the CSC (Certificate of Statutory Completion) and is no longer subjected to the Housing Developers Rules. Other developers might follow suit or they might have other methods of overcoming the ABSD.

In this Business Times article, " Developers sanguine about selling out before stamp duty deadline, rather than giving hefty discounts to individual buyers and thus be accountable to their lenders and their shareholders, other options might include:

  • Buying the properties themselves (using a subsidiary) and rent the units out. 
  • Selling to a bulk buyer
  • Accepting a silent offer from a buyer without offering hefty discounts from the public. 

Our Thoughts? 

With plenty of supply and many buyers waiting on the sideline, developers would definitely come up with creative ways of selling off their units.  

However, its still quite clear that these developers have choices and it is not as simple as slashing their prices to get more sales. Their bottomlines and profit margins still matter especially where there are shareholders involved. These developers won't risk scaring off their shareholders or even reducing the shareholder's confidence because this affects the company's long term progress ( while selling off the units affects only their short term balance sheet). 

This is not to say that there aren't any developers who offer price discounts.

While 'waiting for prices' to drop may seem a reasonable strategy , we believe that taking a pro-active method and offering a lower but still reasonable price for a better unit can make all the difference for you, especially if the development is in a good location. 

Update: As of 5th May, The Straits Times reported that UOE Twin Peaks sold about 30 units over the past few weeks. Its not indicated if all the buyers opted for the DPS. 

Eyeing a condo at a particular development ? Let us find out for you the lowest price developers have accepted for similar unit types.  Email us at askus@propertyrocking.com today. 

Singapore Property Truths for 2016

Singapore Property Market Truths for 2016

Is it time to accept a new normal?

We’re already a few days into the start of a new year and the Singapore property market doesn’t show any signs of a quick recovery. Prices are inching down (though at a slower pace), and buyers are pretty much sitting on the sidelines waiting for either a further fall in prices or the removal of the ABSD (Additional Buyers Stamp Duty) before re-entering the market.

To add salt to the wound, a soft rental market and predictions of a financial downturn is further scaring off potential investors.

Is the property slowdown a good thing? 

Apart from forcing practicing agents to turn to other means of income (helloo Uber), the property slowdown has actually allowed prices to soften so that first time buyer or first time investors can actually get a good bargain if they play their cards right. Look at it this way, if you buy with contingency measures set in place for the worse case scenario, you are actually in a better position than someone who buys in a good market, and who is unprepared for a downturn.

That brings us back to the situation that we are in today. Rather than waiting for a single turning point and for things to return to the ’normal’ of the previous years, maybe it’s time to face facts, to welcome the new ‘normal’ and embrace the opportunities that 2016 will bring.

Singapore Property Market in 2016

1) It’s all about the Long Term

Gone are the days of property prices rising continuously and at such a fast rate that flipping properties becomes the norm. In fact, the Seller Stamp Duty (SSD) was introduced to stop this and with it still in force, property owners have to be doubly sure that they’ll have the holding power to weather dips in property prices and rental demand. The reality is that prices are slowly dipping and might dip further with the impending financial slowdown, so the rental potential of the investment property you buy is extremely important. In a good market, the rental yield or the passive income that you collect each month can be a determinant of a good investment property. However, in a bad market, getting clients just so that you can cover the monthly mortgage should be your focus. See point 2.

2) Lose the battle, Win the war.

In a situation where supply exceeds demand, you will definitely be faced with tenants asking for a lower rent or even demanding more furniture etc, which will come as a shock especially if you had the upper hand for the past few years.

If it is one of only a few offers that you receive, re-consider which of these situations would be worse; a slight loss in income (even if it means topping up a few hundred dollars of the mortgage for the duration of the lease) or paying the whole mortgage by yourself for a few months.

If you are still servicing a loan from a bank, the answer should be pretty apparent.

However, instead of feeling blue about having to suffer a loss, you need to think about the fact that the monthly rent the tenant is paying each month contributes to the capital build up of the property. When you sell the property, this would be part of your profit.

Accept small losses as part of the bigger picture. Even if it is a small loss for one or two years, the money that you are putting in can be considered a form of forced savings for your future.

3) Is your HDB still an investment?

Sorry HDB owners (especially those who bought their property between 2008 and 2014). If you were looking at a quick profit by selling your flat, you would be very disappointed. With prices stagnating, you probably would not have made much cash profits when you factor in the amount of CPF you would have to refund. However, should this be the only indicator of a ‘profitable’ transaction?

Even if most of the ‘profits’ or appreciation is in your CPF, this can still be utilized to offset your next mortgage if you are looking to upgrade to fit the needs of a growing family. If this move is beneficial to your family (and your pockets), you should still take advantage of the CPF appreciation because it’ll take a while for HDB prices to go up this high again. Wait any longer and you would probably run a deficit and end up owing CPF i.e. a negative sale.

Why will HDB prices not rise as high in the short term? 

  1. The massive BTO supply pumped in,
  2. The new method of calculating how much HDB loan you are entitled to i.e. the Mortgage Servicing Ration (MSR) limits the loan amount that can be taken for HDB flats.
  3. The new procedures where the valuation of the flat is “hidden” from the sellers.

Will my HDB ever be profitable? 

It depends on what you consider profits. For you to truly make a cash profit, the price appreciation of your flat will have to exceed the interest rate + the CPF accrued interest rate. If you have a HDB loan, this will mean that to get any cash out from your HDB flat, the prices need to rise at least  2.6% +2.5% = 5.1% each year.

4) Location matters more than ever.

If you are prepared to purchase an investment property, keep in mind its not just about the price of the property , it is also about how easy it will be to rent. A cheap property or low property prices does not necessarily mean that the investment would be profitable.

To determine this, put yourself in the tenant’s shoes. In a market where there’s a lot of choice, why would they go further when they can rent one near amenities and public transportation?

5) Opportunity fund VS using all your life savings

In an uncertain market, the worst thing you can do is to ‘gamble’ your life savings. Even though property investments theoretically can be a relatively safe form of investment, you do not want to add on to the added stress of an underperforming investment.

Set some money aside in an ‘opportunity fund’ that may come your way but make sure that this is money that you can afford to lose.

6) Find legal loopholes & use it to your benefit.

The Government’s Cooling Measure rules are pretty straightforward. 2nd property but you still have an existing housing loan? You’ll only qualify for a 50% loan and you’ll have to pay the ABSD. Buying a 2nd property but you’ve cleared your other housing loan? You’ll need to pay only the ABSD.

Consider decoupling . That way you’ll qualify for an 80% loan and won’t need to pay the ABSD.

7) Find someone who will tell you both sides of the coins.

Everyone hates salespeople. I hate them too. (I know, strange considering my choice of profession) But truthfully, I especially hate how I have to only share how the ‘grass on the greener’ when on duty at a showflat.

You have to understand that agents at showflats are representatives of the developers. They are not allowed to speak ill of a property or to even pitch other properties, even if we think they are more suited to your needs. (That’s natural don’t you think? Imagine walking into an apple store and having the salesperson tell you that you actually need a PC, strange right?)

Speak to us on a one to one basis, and let us understand your needs and requirements. Agents from reputable agencies have access to a whole list of properties as well as get the info first hand when developers give discounts. We’d be more open to giving you the whole story when we’re not in a tight position.

8) Always do a stress test

Remind your agent that you would like do a stress test to measure affordability. The stress test would give you a gauge of how much you will be paying if the interest rate reaches the support level of 3.5%. To add in an additional level of security, predict a scenario where rents fall to a level where you have to top up $200 – $500 to the monthly mortgage of your investment property. Are you still in a good place financially? If not, put off purchasing that property until the market or the rent demand stabilises.

Chicken Little or Warren Buffet?

Chicken little thinks that the sky is falling, while Warren Buffett knows that opportunities are present when times are bad. While we don’t deny the fact that the market is not stable right now, there are also gems out there for you to consider. If you are in a good position financially, consider entering the market when everyone else is skeptical.

After all, would it be better for you to enter the market and have the upper hand when no one is buying or would you prefer to wait for the floodgates to open when the cooling measures are removed?

Can your HDB flat still be used as a retirement plan?

Is your HDB Flat your only retirement plan?

Avoid making this mistake before it's too late.

I felt compelled to write this post after reading this post on PropertyGuru about a 64 year old Singaporean who would not have much cash for retirement even after selling his Tampines Court Apartment. This is even though he bought the unit before privatization i.e. it experienced a substantial increase in price from the time he purchased it.

The owner was appealing to buy a BTO from HDB, most likely for the lower prices, which would free up more cash for his retirement.

Reactions on the Propertyguru FB post showed that most people were not convinced that this could happen and accused him of lying to get special privileges from HDB.

Tamp Court FB Pic Singapore

However, as a practicing agent, I feel that it is important for the general public to know that this type of scenario is NOT an exception.  It is increasingly becoming the norm, and it is especially sad for those who want to retire but then realise that they will NOT have much cash proceeds from the sale even though their flat price has appreciated substantially. 

By that time, you won't have sufficient time to start a proper retirement fund and most would have to resort to working for the rest of their lives. 

If you are still confused about how this might happen, I've included a case study below from a Singaporean couple who I have recently spoken to. Details have been made generic for educational purposes. 


Mr and Mrs XYZ are in their late 40s and have 3 children who are still in school. They bought a resale executive flat in Tampines for $443 000 in 2001. They took a HDB loan with a 2.6% interest rate.  Currently the selling price of that flat (as well as the estimated valuation from SRX) is around $620 000. 

They have been monitoring the market and since prices of flats have been falling, they would like to cash out and downgrade to a fully paid 4 room flat before their CPF gets compulsorily diverted into the Retirement Account.

Outstanding Loan : $195 000

They do not have much CPF in their ordinary accounts (OA).​

MR XYZ : CPF Usage for property + Accrued Interest = $ 230 712 +$61 379 =$ 292 091

MRS XYZ : CPF Usage for property + Accrued Interest : $83 642 + $23 130 = $106 772

Total to be returned to CPF = ​$292 091 + $106 772 = $398 863

Cash Proceeds  = Selling Price of the Flat  minus (-)  the existing loan minus (-) the amount you need to return to CPF. 

Therefore for this couple , the cash proceeds from the sale of their flat would be a mere $620 000 - $195 000 - ​$398 863 = $26 137.

This also means that they are only able to use $398 863 from their CPF funds for their next flat, without even considering additional factors like renovation costs etc. 

If they delay their decision, we predict that the HDB ramping up supply would lead to a further dip in prices, and with interest and accrued interest still accumulating, they might have a negative sale further down the road.

Alternatively, they might want to wait until their children are all grown up, and move into a studio apartment so that they can pocket more cash from the transaction. 

Why were my parents able to retire on the funds from their HDB flat? 

  • ​Prices of HDB Flats were extremely low 30 - 40 years ago and it is a norm to see prices of flats appreciate by 3-4 times. In contrast, the prices of flats of flats purchased about 10 years ago have only appreciated by less than half. 
  • The previous generation most likely paid for their flats by cash (instead of CPF) and this reduces the amount of CPF and the accrued interest to be refunded back into the account.
  • The minimum sum for couples increase according to inflation  which means you will be paying more.

Will the prices of HDB go up? 

There will definitely be an increase based on inflation but we don't forsee double digit growth or a doubling of prices like that in 2008 - 2015. If you look at the HDB Price Index Below, you'll see that the growth did not occur in history and probably would not continue, especially with Ministers promising to keep public housing affordable. 

HDB Price Index 2016

What does this mean for you? 

We are not fortune tellers and we cannot predict how the market would be like when it is time for you to retire but this is some advice that we would like to give so that your situation won't be so tight 20 - 30 years down the road. Of course, you have to carefully consider each one with regards to your own risk appetite and financial situation.

  1. Plan for retirement early and don't depend on your HDB flat as a retirement p​lan. 
    • Just to understand how much interest you will be paying ( believe me it can be a shocker) , find a free mortgage calculator app or online. The total amount of interest you pay will be based on your the interest rate, your total loan amount, and the number of years you are taking the loan for.  Unfortunately there are no calculators online to estimate accrued interest, so you can estimate it using a 2.5% interest rate. 
  2.  If you are the type who allows excess CPF to just sit in your OA, you should consider paying of your home loan early.
    For HDB loans, this reduces the total amount of interest and accrued interest you have to pay. Making Partial Capital Repayment  on HDB loans is extremely easy to do and there are no penalties for early repayment. 
    For bank loans, you need to check with your banks if there are any penalties for early repayment.
    • NOTE : We understand that there multiple point of views about paying off a mortgage loan early. From our point of view, paying off mortgage loans early works well if it is for your own residence. For properties that you rent out, the strategy should be different since it is the tenants who pay for the interest and the principal. 
    • We also know about the argument that a person shouldn't pay off their home loan early because if you die, your home would be covered by insurance and your spouse will get both your existing cpf and the insurance payout ( instead of nothing since you used up your CPF to pay for the loan) . Well we can't argue with that, but we also hope that you have a plan in place if both of you live long and healthy lives. 
  3. Look into other forms of retirement plans or purchasing another private property  to fund your retirement as the rent that your tenants pay will contribute towards your equity. Once the tenants fully pays off your mortgage for that property, it can be a source of monthly income for you. 

Dual Key Condominium Units

Dual Key Condominiums in Singapore

What are dual key condominium units?

Dual Key condo units are apartments with 2 separate living spaces, typically a 2 or 3 bedder apartment and with an attached studio unit or one bedroom apartment.

They are found in private condominiums and executive condominiums (ECs).

[Note: As of end 2013, HDB revised its policies and would only allow multi-generational families to purchase Dual Key ECs.]

Dual Key Condominium Singapore

Sample 3 bedroom Dual Key Unit at the Santorini in Tampines

As you can see from the floor plan above, there is one main door but living space is quite clearly defined.

Some dual key units (like the one in the floorplan above) come with 2 kitchens spaces (i.e. the studio unit has an induction cooker) while others come with an oven / microwave oven for simple cooking and reheating.

Why are these types of units popular?

1) Passive income while enjoying condo living.

While many people enjoy the perks and facilities of a private development, be it a condominium or an apartment, they usually shudder at the thought of the hefty mortgage payments.

A dual key condominium unit ensures that you have some rental income coming in while you enjoy the luxuries associated with condo living.

2) More privacy than renting out a room

Some families, especially those with young children, do not like the option of renting out a room because of the loss of privacy associated with the sharing of a bathroom, kitchen etc.

With a dual key unit, the tenant has access to his own bathroom and kitchen, which means more privacy for the family.

3) Restrictions of the Cooling Measures

Currently, if you purchase a second property, there are several restrictions for example a lower loan amount (LTV), and an additional stamp duty (ABSD) imposed on the owner.

With a dual key unit, you technically own ‘two’ properties since you can rent one out.

However, we can also suggest other legal means of avoiding the ABSD if it is an issue for you.

Typical Use of dual key units

  1. Owners of dual key units usually stay in the main living space and rent out the one bedroom /studio
  2. There are also savvy singles or young couples who prefer to stay in the one bedder and rent out the 2 or 3 bedder for a higher monthly rent.
  3. Multigenerational families also remain close by using the space for their teenage or adult children, or even elderly parents.
  4.  Entrepreneurs who operate a home office might also prefer to use the unit as a study or as an office space. Please take note that you would still need to abide by URA's guidelines for operating a home office. 

Is it a wise investment to purchase a dual key apartment?

As with other investment properties, you need to remember that there are basic concepts to purchasing a good rental property.

    1) Proximity to amenities and transportation

If the attached apartment does not have any cooking facilities, proximity to eateries would definitely be an important factor.

Distance to public transportation is definitely an important factor since , if everything else is equal, tenants would definitely prefer accommodation closer to public transport.

2) Living space

Some dual key studio or 1 bedroom units come in loft style, which means that the bed is on a platform. You might want to survey the other developments in the area to see if this is a typical set up because tenants might not be too receptive to this set up, unless there are a lot more advantages to living in that development, for example, bigger living spaces, a condominium in the city center etc.

3) Lower Quantum because of total PSF

When buying a private property, the bigger the size of the unit, the lower the PSF (i.e. price per square foot).​

If you were to compare the cost of purchasing a 4-room dual key apartment to 2 separate apartments (i.e. a 3 bedder and a one bedroom apartment for rental), the cost of the dual key is definitely cheaper than that of the 2 separate units.

A list of condominium developments with dual key units?

Note: This is not a comprehensive list of developments. If you have any other development in mind and need more information, we will be glad to assist. 

Private Condominiums

  • Citygate - Beach Road
  • Sunnyvale Residences- Lorong K Telok Kurau
  • The Santorini - Tampines
  • Bartley Ridge - Bartley Rd
  • The Interlace - Depot Road
  • Waterfront at Faber
  • The Glades - Tanah Merah

Executive Condominiums (ECs)

  • Ecopolitan @ Punggol

Buying a HDB resale property: Does $0 COV really mean no cash upfront?


Resale HDB Prices : $0 COV

Do you need cash to buy a HDB Resale Flat?

On 10 March 2014, HDB revised the procedure for buyers to purchase a resale HDB property from the open market. Since then, prices of HDB flats have been going down, with one very obvious change  being the drop in the asking COV (Cash -Over-Valuation)  prices.

With the change in procedure, sellers are no longer able to dictate how much COV they want but instead have to “package it” into the total asking price for the flat.

What does this mean for buyers? Does this mean that there will not be any COV payable? Does this mean that buying a resale flat does not require any cash up front?

Not quite. There might be COV involved AND there is still some cash involved in the purchase.

Before we explain the COV portion and the cash involved in the process, buyers should first understand the old and new HDB resale procedures, and how it will affect how much cash you need for that resale HDB.

Old Resale Procedure

Prior to 10 March 2014, when the seller of a flat decides to sell, they would purchase a valuation report from a valuer through HDB. The valuation report will give the seller the ‘starting price’ of the flat, and the seller would add on to it by placing a cash premium on top of the selling price.

This cash premium was known as Cash over Valuation or COV and you cannot take a loan to cover this amount. Note that the banks or HDB will only grant buyers a loan based on the official valuation of the flat.

It got to a point where COVs went up to $100 000 and finding a flat with low COV was almost like hitting the jackpot.

New Procedure

When a seller decides to sell his home, he can no longer get an official valuation of the flat. Instead, he can review HDB’s recent transaction of flats in the area or use various tools available online for example on SRX online to make an estimate of the value of his flat.

With the estimated valuation in mind, the seller can then invite buyers to view his flat based on his selling price, which includes the COV if any.

If the buyers are interested in the flat, they will put in an offer.

The negotiation process starts and once both buyers and sellers arrive at a mutually agreed price, the seller will grant the buyers an option to purchase (OTP). The buyer will then put a deposit (also known as option money), of up to $1000.

With this option to purchase, buyers will proceed to apply for a valuation of the flat via the HDB website. HDB usually doesn’t disclose to the valuers the agreed selling price of the flat.

The valuation company will then send the report directly to the buyers, which means the Seller will not be informed about the valuation of the flat. Whether or not the Seller finds out about the valuation, he will not be able to adjust his selling price.

Only with this valuation report, will the buyers be able to determine if they need to top up any cash for the flat based on the following scenarios.

  • If the valuation matches the agreed selling price, the flat is considered to be sold at valuation . Buyers They do not have to top up any cash for the flat)


  • If the valuation is more than the selling price of the flat, the flat is considered to be sold below valuation. Buyers do not need to top up any cash for the flat.


  • If the valuation is below the selling price of the flat, the flat is considered to be sold above valuation. Buyers would have to top up cash to make up the difference between the loan granted (i.e. the valuation) and the selling price.

However, at this stage, the buyer has not confirmed the purchase. If they find that the COV is too high, they are still allowed to back out of the deal but they will not be able to get back the initial deposit made to the sellers.

What are the other costs involved in buying a resale flat?

Apart from the Cash over valuation (if any), there are also other costs, which you would need to pay when purchasing a resale flat.

Costs Payable by CPF

(If your cpf is insufficient, you would need to top up by cash.)

  • Stamp Duty (This is about 3% of the value of the flat)


Costs Payable by Cash only

A) Option fee

This is the ‘deposit’ you pay the seller to kickstart the buying process.

This amount is between $1 to a maximum of $1000. The current market practice is $1k but this is negotiable.

B) Exercise option fee.

This is the fee you pay to the seller to confirm your purchase. after you have received the valuation report and have arranged for a loan with either HDB or a bank. This amount is also negotiable but the current market practice is $4000, which is also the maximum amount legally.

C) Valuation Cost

  • $140.40 for 1-2 room flats and
  • $199. 25 for 3 room and bigger.

D) Resale Application Fee

  • $40 –for 1-2 room flats and
  • $80 for 3 room and bigger


E)Property Agent’s Commission.

For a HDB flat, the market rate is typically 1% of the flat price excluding GST.

In contrast, buying a BTO from HDB is substantial cheaper but has disadvantages like a long waiting time.

If you are still undecided, you might want to read our article comparing a BTO and a Resale HDB Flat .

HDB Resale Flats Property Singapore


You can read up on the costs involved when buying a BTO direct from HDB here.


Good Luck with your home search!


Mid 2015 Singapore Property News Update

Singapore Property Market News

 Mid 2015 Singapore Property News Update

It’s been an interesting 2015 for the Singapore Property Market, with the slowdown showing no signs of immediate relief. When compared with those sold in 2014, sales of new homes were down 57% according to this PropertyGuru article.

Rental yields are also down, and this is attributed to the increasing supply of new homes in the market as well as a supposed tightening of foreign talent inflow.

Even foreign press has given their inputs on the property market in Singapore. Bloomberg commented that defaults are rising especially for owners of multiple properties who most likely cant afford to maintain multiple empty homes.

However, while the volumes have gone down, prices have not budged much, with the non-landed prices dropping only 4% in 2014.

Analysts predict that the government would only take away the cooling measures once prices have dropped a certain level, most likely around 10%.

Banks have also given their forecast of the property market in Singapore, a BNP Paribas report stated that prices might still drop another 10%. UOB research stated however that there would be Government intervention by the end of the year.

From our point of view, there probably wouldn’t be drastic government intervention unless there is a repeat of the 2008 situation. The MERS scare in South Korea might be a critical point since Sars had made a huge impact in the property prices.

You may also want to refer to URA’s website for official statistics.

This is Propertyguru’s forecast for 2015.

For those who want to take advantage of the drop in property prices, you might want to read our article on beating the cooling measures and avoiding the ABSD.