I’m 40 With Cash Savings Of $100k: Should I Decouple My Co-Owned Condo To Buy An HDB?

Dear StackedHomes,

I have found your responses to audience queries incredibly helpful in understanding the Singapore property market, which can be complex due to varying individual circumstances. I would appreciate your advice on my current situation.

I am 40 years old and currently co-own a 2BR2B condo in the east with my brother. My commute to work in the CBD takes about an hour. We moved out of our parents’ 5-room HDB flat in Bukit Merah, which has a remaining lease of 58 years. Recent transactions in their block have been around $1 million. I value the location, amenities, and layout of my parents’ home and do not find condo living significantly better in terms of amenities or security, especially given the remote location. 

However, I am aware that resale prices for HDB flats in the area are quite high. Decoupling is also challenging given my joint ownership of the property with my brother (50-50). My annual salary is approximately $150,000, with CPF OA savings of around $185,000 and cash savings of $100,000.

Given my goal to eventually move to a HDB in the central area for my own stay, appreciate your views on the following options, considering my affordability and situation:

• Decouple from my brother, wait 15 months, and purchase my parents’ place.

• Decouple from my brother, wait 15 months, and purchase a smaller resale HDB in the same area.

• Sell the current condo and use the proceeds to purchase a smaller resale HDB in the same area.

• Continue with the status quo for now.

Looking forward to your response. Thank you!

Best regards,

(This is part of an ongoing series where we answer reader questions about the property market. If you have one of your own, send it to stories@stackedhomes.com.)

---

Hi there,

We’re glad our content has been useful for you!

To be sure, living in a condo isn’t for everyone. While condos offer additional amenities, they also come at a cost, and these benefits may not make condo living significantly better than HDBs if you don’t utilise them.

Let’s start by examining the performance of 2-bedroom units in the East. Since we don’t know the specific development you own, we will review the general performance of this unit type. For this analysis, we are defining 2-bedroom units as those ranging in size from 700 to 850 sq ft.

Year	2-bedders in the East (resale)	YoY	All 2-bedders (resale)	YoY	All non-landed private property (resale)	YoY
2013	$1,194	–	$1,457	–	$1,245	–
2014	$1,173	-1.76%	$1,414	-2.95%	$1,190	-4.42%
2015	$1,138	-2.98%	$1,311	-7.28%	$1,191	0.08%
2016	$1,132	-0.53%	$1,305	-0.46%	$1,248	4.79%
2017	$1,251	10.51%	$1,394	6.82%	$1,292	3.53%
2018	$1,196	-4.40%	$1,385	-0.65%	$1,325	2.55%
2019	$1,179	-1.42%	$1,398	0.94%	$1,344	1.43%
2020	$1,162	-1.44%	$1,446	3.43%	$1,294	-3.72%
2021	$1,244	7.06%	$1,405	-2.84%	$1,345	3.94%
2022	$1,364	9.65%	$1,497	6.55%	$1,455	8.18%
2023	$1,523	11.66%	$1,648	10.09%	$1,562	7.35%
Average	–	2.63%	–	1.37%	–	2.37%

*Properties with all lease tenures are included here

When examining the average growth rate over the past 10 years, we observe that 2-bedroom units in the East generally outperform those across the island. However, when looking at the year-on-year changes, these units in the East mostly experienced negative growth until the pandemic.

Despite these trends, the actual growth rate varies by project. As we don’t know which development you own, we won’t be providing specific advice on whether it is feasible keep your unit. In addition, the historical performance may not be very accurate as the East includes Katong/Joo Chiat/Telok Kurau which contains a lot of boutique developments which may skew the data. 

Now, let’s explore the performance of older 5-room flats in Bukit Merah.

Year	5-room in Bukit Merah (built before 1984)	YoY	All 5-room in Bukit Merah	YoY	All 5-room	YoY	All HDB	YoY
2013	$568	–	$623	–	$445	–	$469	–
2014	$554	-2.46%	$601	-3.53%	$422	-5.17%	$441	-5.97%
2015	$546	-1.44%	$604	0.50%	$405	-4.03%	$423	-4.08%
2016	$547	0.18%	$587	-2.81%	$411	1.48%	$424	0.24%
2017	$520	-4.94%	$595	1.36%	$419	1.95%	$425	0.24%
2018	$522	0.38%	$618	3.87%	$417	-0.48%	$419	-1.41%
2019	$507	-2.87%	$608	-1.62%	$415	-0.48%	$416	-0.72%
2020	$511	0.79%	$598	-1.64%	$429	3.37%	$431	3.61%
2021	$538	5.28%	$640	7.02%	$480	11.89%	$488	13.23%
2022	$586	8.92%	$684	6.88%	$520	8.33%	$532	9.02%
2023	$627	7.00%	$741	8.33%	$543	4.42%	$564	6.02%
Average	–	1.08%	–	1.84%	–	2.13%	–	2.02%

The table shows that older 5-room HDBs in Bukit Merah are underperforming compared to other 5-room HDBs across the island. Year-on-year changes indicate that, before the pandemic, prices mostly experienced negative growth or remained stagnant. As the market recovers, it is unlikely that growth rates will match those of the past three years. With newer flats available in the area at similar price points, even for smaller unit types, buyers may prefer those as a safer option.

Now, let’s examine your affordability.

Affordability

For the purchase of an HDB

Maximum loan based on the age of 40 with a fixed monthly income of $12.5K at a 4.8% interest	$654,454
CPF funds	$185,000
Cash	$100,000
Total loan + CPF + cash	$939,454
BSD based on $939,454	$22,783
Estimated affordability	$916,671

Since your salary exceeds the income ceiling for an HDB loan ($7,000/month for singles), you are only eligible for a bank loan. We assume your CPF funds of $185,000 include the amount used to purchase your current property and will consider this as your affordability. If this is not the case, your affordability will be higher once you decouple or sell the condo.

Also, without your current property details, we cannot determine if decoupling is a viable option. However, here is a sample calculation for your reference.

Assuming that,

Property value: $1,500,000

Outstanding loan: $1,000,000

CPF used by individual selling shares (aka seller): $200,000

	Seller	Buyer
Shares	50%	50%
Valuation	$750,000	$750,000
Outstanding loan	$500,000	$500,000
CPF usage	$200,000	N.A
BSD	–	$17,100
Option fees	$37,500 (received)	$37,500 (paid)
Completion fees	–	$150,000
Legal fees	$3,000	$3,000
New loan	–	$1,062,500
CPF + cash proceeds	$247,000	–

Do note when decoupling, you will need to ensure that the individual taking over the shares is eligible to secure the full loan solely in their name. Additionally, be aware that decoupling does not permit a negative sale. If the share valuation is lower than the outstanding loan plus the CPF amount that needs to be refunded to the seller’s OA, the shortfall must be covered in cash.

Now, let’s review the options you’re considering.

Potential pathways

Your path moving forward would involve decoupling from your existing Joint Tenancy arrangement with your brother. Beyond the numbers, let’s address the legal complications when it comes to decoupling under Joint Tenancy.

According to Singapore Legal Advice, decoupling under this arrangement would not be possible as Joint Tenancy is a manner of holding where there are no shares. However, it would still be possible if you perform an act of severance to become tenants in common. This is mentioned in Conveyancing and Law of Property Act 1886 under section 66A subsections 3 and 4.

This complication would likely just result in some delays due to the process and legal fees as a lawyer would need to provide you with assistance on this matter.

Decouple, wait 15 months, buy over parents’ place

As previously noted, we cannot determine if decoupling is a viable option without your specific numbers. However, for the sake of discussion, let’s just assume that it is feasible.

We will also assume that you will either continue living in your current residence or move into your parents’ home during the 15-month wait out period, thereby avoiding any additional rental costs.

Purchase price	$1,000,000
BSD	$24,600
CPF + cash	$285,000
Loan required	$739,600
Loan shortfall	$85,146

As seen in the affordability calculations earlier, your budget is approximately $916K, so if you wish to purchase a flat at $1M, an additional top up of $85,146 will be needed.

For calculation purposes, let’s presume a 10-year holding period.

Interest expense (Assuming a 25-year tenure and 4% interest)	$227,094
BSD	$24,600
Property tax	$8,800
Town council service & conservancy fees (Assuming $85/month)	$10,200
Total costs	$270,694

There are several considerations to weigh with this option.

Firstly, the performance of the flat. As observed earlier, 5-room flats in Bukit Merah aged over 40 years are not performing as strongly as others in their category. Despite recent price increases driven by pandemic-induced demand, the flat’s potential for retaining its value may be lower which is an important factor if you plan to sell it in the future.

To merely break even after 10 years, you would need to sell the property at $1,270,694, necessitating an annual growth rate of 2.42%. However, the average growth rate over the past decade, at 1.08%, falls significantly short of this figure.

Secondly, consider whether your parents intend to sell the flat to you below market rate. This involves further deliberation. While it may benefit you if this is the case, your parents would not be maximising their potential profits. Understandably, this may be a difficult thing to balance depending on your family relationship, so there’s obviously no right or wrong here. 

Decouple, wait 15 months, buy smaller resale flat in Bukit Merah

Looking at the recent transactions, with a budget of $916K, you will be able to get a younger 3 or 4-room HDB in the Bukit Merah area.

Here are some of the recent transactions. 

3-room

Date	Block	Street	Level	Size (sqm) and unit model	Built year	Price
Jun 2024	96A	Henderson Rd	10 to 12	68.00Model A	2019	$728,000
Jun 2024	26B	Jln Membina	13 to 15	60.00Model A	2009	$690,000
May 2024	95C	Henderson Rd	07 to 09	68.00Model A	2019	$720,000
May 2024	95A	Henderson Rd	22 to 24	68.00Model A	2019	$770,000
May 2024	92B	Telok Blangah St 31	10 to 12	68.00Model A	2018	$680,000
May 2024	58	Havelock Rd	34 to 36	69.00Model A	2013	$818,000
May 2024	26B	Jln Membina	16 to 18	60.00Model A	2009	$693,000

4-room

Date	Block	Street	Level	Size (sqm) and unit model	Built year	Price
Jun 2024	26C	Jln Membina	04 to 06	90.00Model A	2009	$875,000
Jun 2024	17	Cantonment Cl	13 to 15	90.00Model A	2003	$918,000
May 2024	96A	Henderson Rd	46 to 48	93.00Model A	2019	$900,000
May 2024	93A	Telok Blangah St 31	04 to 06	93.00Model A	2018	$848,000
May 2024	110A	Depot Rd	07 to 09	92.00Model A	2017	$800,000
May 2024	127A	Kim Tian Rd	01 to 03	93.00Model A	2013	$800,000
May 2024	25B	Jln Membina	04 to 06	90.00Model A	2009	$895,000
May 2024	73A	Redhill Rd	13 to 15	100.00Model A	2005	$915,000

Having looked at the performance of older flats, let’s now take a closer look at the performance of newer flats in Bukit Merah constructed after 2000.

3-room flats

Year	3-room in Bukit Merah (built after 2000)	YoY	All 3-room in Bukit Merah	YoY	All 3-room	YoY	All HDB	YoY
2013	$807	–	$583	–	$496	–	$469	–
2014	$778	-3.59%	$558	-4.29%	$465	-6.25%	$441	-5.97%
2015	$751	-3.47%	$549	-1.61%	$442	-4.95%	$423	-4.08%
2016	$782	4.13%	$538	-2.00%	$439	-0.68%	$424	0.24%
2017	$776	-0.77%	$558	3.72%	$432	-1.59%	$425	0.24%
2018	$772	-0.52%	$520	-6.81%	$417	-3.47%	$419	-1.41%
2019	$793	2.72%	$506	-2.69%	$409	-1.92%	$416	-0.72%
2020	$863	8.83%	$537	6.13%	$424	3.67%	$431	3.61%
2021	$865	0.23%	$562	4.66%	$482	13.68%	$488	13.23%
2022	$912	5.43%	$613	9.07%	$532	10.37%	$532	9.02%
2023	$956	4.82%	$684	11.58%	$562	5.64%	$564	6.02%
Average	–	1.78%	–	1.77%	–	1.45%	–	2.02%

4-room flats

Year	4-room in Bukit Merah (built after 2000)	YoY	All 4-room in Bukit Merah	YoY	All 4-room	YoY	All HDB	YoY
2013	$721	–	$669	–	$467	–	$469	–
2014	$700	-2.91%	$636	-4.93%	$435	-6.85%	$441	-5.97%
2015	$700	0.00%	$632	-0.63%	$423	-2.76%	$423	-4.08%
2016	$711	1.57%	$635	0.47%	$423	0.00%	$424	0.24%
2017	$716	0.70%	$652	2.68%	$426	0.71%	$425	0.24%
2018	$714	-0.28%	$650	-0.31%	$422	-0.94%	$419	-1.41%
2019	$725	1.54%	$647	-0.46%	$421	-0.24%	$416	-0.72%
2020	$765	5.52%	$669	3.40%	$440	4.51%	$431	3.61%
2021	$791	3.40%	$708	5.83%	$499	13.41%	$488	13.23%
2022	$808	2.15%	$720	1.69%	$541	8.42%	$532	9.02%
2023	$870	7.67%	$802	11.39%	$574	6.10%	$564	6.02%
Average	–	1.94%	–	1.91%	–	2.24%	–	2.02%

For the aforementioned flat types, the growth rates of units in Bukit Merah built after 2000 are comparable to the overall growth rates of similar flat types on average. Specifically, for 3-room flats, their average growth rate over the last decade surpasses that of the overall growth rate of 3-room flats, while 4-room flats exhibit slightly lower growth rates compared to the overall growth rate of 4-room flats.

Examining the year-on-year growth, it’s evident that both flat types in Bukit Merah built after 2000 rebounded after 2018, whereas the rest of the market only experienced recovery when the pandemic hit in 2019.

Now, let’s delve into the associated costs.

We’ll assume you utilise your maximum budget of $916,000 to purchase a 4-room flat, maintaining the same 10-year holding period.

Purchase price	$916,000
BSD	$22,080
CPF + cash	$285,000
Loan required	$653,080

Interest expense (Assuming a 25-year tenure and 4% interest)	$226,618
BSD	$24,600
Property tax	$7,790
Town council service & conservancy fees (Assuming $77/month)	$9,240
Total costs	$268,248

For option 3, selling the condo and purchasing a smaller resale unit, as well as option 4, maintaining the status quo, we are once again unable to provide guidance without knowing the specifics of your property and financial situation. However, regarding option 3, the associated costs will likely resemble those of option 2. If you possess additional funds not factored into the calculations, you may be able to increase your affordability or decrease your loan amount.

What should you do?

Due to the absence of crucial details, we cannot provide comprehensive advice on the feasibility of the options and which one might be better suited for you. However, here are some factors to consider that could help you narrow down your options.

Firstly, as previously mentioned, it’s essential to ensure that your brother can take on the full loan for the condo if you decide to decouple.

Once this aspect is clarified, the decision between selling or decoupling would hinge on the property’s performance and whether your brother intends to acquire your shares. Since you do not perceive condo living as significantly superior to an HDB, it seems that your preference leans towards moving out of that place. Therefore, maintaining the status quo may not be the most preferred option. However, if you are open to continuing to reside there and the project is performing well, it could be viable to observe market movements while potentially generating more profits (should that be important to you).

Regarding the choice between acquiring your parents’ house or purchasing another smaller resale flat in the area, we recommend opting for the latter. As observed earlier, the growth rate of older flats notably lags behind that of newer ones. If you intend to sell the property sometime in the future, it will likely be easier to sell a newer flat with better value retention potential. Buying from your parents may also complicate your relationship with them later on. We don’t know the dynamics of your relationship with them, but we’re familiar with cases where family members are involved in property transactions and things don’t always go smoothly, resulting in strained relationships.

Considering that in both scenarios you are maxing out your loan and other expenses are similarly priced, the costs involved are quite comparable. However, it’s important to note that if you were to purchase your parents’ place at the market rate of $1M, there would be a shortfall that you would need to cover with CPF or cash.

As such, it seems that option 2/3 is the preferred option as you can purchase a younger HDB in a good location that would likely continue to grow due to its desirability. Since you don’t see the benefits of staying in a condo outweighing staying in an HDB, this would be a logical choice. If you get to stay with your parents, there’s no additional cost to rent and not buying from your parents would not create any complications in your relationship with them.