We Own A 2 Bedder EC At The Vales: Should We Sell To Buy A Condo, Buy An HDB Or Rent?
-
Grady
- May 24, 2024
- 9 min read
9 min read
Bought The Vales EC two bedder in 2017 at $650k. Outstanding loan of $400k at 1.5% interest rate at five year fixed which ends 2025 sep.
We now have a four year old daughter. So thinking of our options and which may work best for us.
- sell The Vales and buy Foresque Residences. Two bedder. Continue to own a car at $20k depre, outstanding loan of $110k.
- sell The Vales and buy hillion residences at $1.27m. Two bedder. Sell away car and no more outstanding loan of $110k.
- sell The Vales and buy jelebu four room Hdb at $750k. (Need Hdb to waive off waiting period) Sell away car and no more outstanding loan of $110k.
- rent out the Vales and hope it continues to appreciate higher than 3%. Then rent hillion residences or jelebu Hdb.
I am trying to strike a balance of
- stay near parents at BT panj
- stay near mrt so don’t need to drive
- Capital gains > interest paid
Hi there,
Thanks for writing in, and that’s an interesting situation that you have.
While it’s not impossible, it can sometimes be challenging to find a property that checks all of your boxes. Even though the requirements you’ve laid out are not unattainable, the current interest rate environment might pose a hurdle. The 10-year average growth rate for non-landed private properties is 2.9%, while mortgage interest rates for some banks are at least 2.9% for a 2-year fixed-rate package. This means you would need to find a property performing better than the average growth rate.
Let’s begin by making some comparisons to gain a clearer understanding of how Executive Condominiums (ECs) are faring in comparison to apartments and condominiums. This general analysis encompasses properties situated in all districts and of varying ages, so do note that the performance of individual products may differ.
All 99-year ECs VS All 99-year Apartments & Condominiums
| Year | All ECs (resale) | YoY | All Apts & Condos (resale) | YoY |
| 2013 | $800 | – | $1,113 | – |
| 2014 | $777 | -2.88% | $1,064 | -4.40% |
| 2015 | $728 | -6.31% | $1,073 | 0.85% |
| 2016 | $709 | -2.61% | $1,168 | 8.85% |
| 2017 | $710 | 0.14% | $1,146 | -1.88% |
| 2018 | $812 | 14.37% | $1,194 | 4.19% |
| 2019 | $847 | 4.31% | $1,242 | 4.02% |
| 2020 | $860 | 1.53% | $1,248 | 0.48% |
| 2021 | $941 | 9.42% | $1,271 | 1.84% |
| 2022 | $1,097 | 16.58% | $1,403 | 10.39% |
| 2023 | $1,232 | 12.31% | $1,533 | 9.27% |
| Average | – | 4.69% | – | 3.36% |
All 99-year EC 2-bedders VS All 99-year Apartment & Condominium 2-bedders
*Here I’ve set 2-bedders as units under 850 sq ft
| Year | All EC 2-bedders (resale) | YoY | All Apt & Condo 2-bedders (resale) | YoY |
| 2015 | $785 | – | $1,383 | – |
| 2016 | $825 | 5.10% | $1,672 | 20.90% |
| 2017 | $874 | 5.94% | $1,503 | -10.11% |
| 2018 | $983 | 12.47% | $1,404 | -6.59% |
| 2019 | $1,006 | 2.34% | $1,423 | 1.35% |
| 2020 | $984 | -2.19% | $1,441 | 1.26% |
| 2021 | $1,039 | 5.59% | $1,432 | -0.62% |
| 2022 | $1,177 | 13.28% | $1,534 | 7.12% |
| 2023 | $1,340 | 13.85% | $1,693 | 10.37% |
| Average | – | 7.05% | – | 2.96% |
*As older ECs do not have 2-bedders, the first resale transaction done was in 2015
All 99-year EC 3-bedders VS All 99-year Apartment & Condominium 3-bedders
*Here I’ve set 3-bedders as units under 1,250 sq ft
| Year | All EC 3-bedders (resale) | YoY | All Apt & Condo 3-bedders (resale) | YoY |
| 2013 | $818 | – | $1,127 | – |
| 2014 | $793 | -3.06% | $1,073 | -4.79% |
| 2015 | $748 | -5.67% | $1,081 | 0.75% |
| 2016 | $733 | -2.01% | $1,228 | 13.60% |
| 2017 | $745 | 1.64% | $1,197 | -2.52% |
| 2018 | $860 | 15.44% | $1,202 | 0.42% |
| 2019 | $900 | 4.65% | $1,245 | 3.58% |
| 2020 | $898 | -0.22% | $1,283 | 3.05% |
| 2021 | $972 | 8.24% | $1,292 | 0.70% |
| 2022 | $1,126 | 15.84% | $1,411 | 9.21% |
| 2023 | $1,267 | 12.52% | $1,562 | 10.70% |
| Average | – | 4.74% | – | 3.47% |
Reviewing the three comparisons provided, ECs have consistently surpassed apartments and condominiums. One reason could be due to the age, as out of the 76 ECs in Singapore, 63 commenced their leases after the year 2000, with 24 of them being less than a decade old.
Before delving into the particular developments you have in mind, let’s assess the performance of The Vales.
Performance of The Vales
| Year | The Vales (resale) | YoY | D19 99y non-landed (resale) | YoY | All 99y non-landed (resale) | YoY |
| 2019 | $912 | – | $1,025 | – | $1,178 | – |
| 2020 | $948 | 3.95% | $1,027 | 0.20% | $1,173 | -0.42% |
| 2021 | $1,040 | 9.70% | $1,107 | 7.79% | $1,207 | 2.90% |
| 2022 | $1,224 | 17.69% | $1,258 | 13.64% | $1,337 | 10.77% |
| 2023 | $1,361 | 11.19% | $1,373 | 9.14% | $1,463 | 9.42% |
| Average | – | 10.63% | – | 7.69% | – | 5.67% |
As it was only completed in 2017, there is limited historical data available for The Vales. However, considering that it reached the Minimum Occupation Period (MOP) recently in 2022, it’s not unexpected that its growth rate surpasses that of 99-year leasehold non-landed private properties on average.
Near the project, there are three other ECs: OLA, Treasure Crest, and Bellewaters. Among these, only OLA features 30 units of 2-bedders, but it hasn’t yet reached its MOP. However, the two projects closer to Sengkang MRT station, La Fiesta and The Luxurie, each offer over 200 units of 2-bedders. Let’s compare them against The Vales.
| The Vales | La Fiesta | The Luxurie | |
| Lease start | 2014 | 2012 | 2011 |
| No. of units | 517 | 810 | 622 |
| Avg 2-bedder price (in 2023) | $1,076,439 | $1,107,236 | $1,142,432 |
| Avg 2-bedder PSF (in 2023) | $1,389 | $1,448 | $1,381 |
| Avg 2-bedder size (sqft) | 775 | 765 | 835 |
Here, you can see that the average price per square foot (PSF) for the three developments is rather comparable, even though La Fiesta and The Luxurie are classified as condominiums. As such, it’s likely that the demand for 2-bedders at The Vales will remain strong especially since it currently stands as the youngest resale development in the area (prior to OLA reaching its MOP).
These are some of the recent 2-bedroom transactions:
| Date | Size (sqft) | PSF | Price | Level |
| Apr 2024 | 753 | $1,497 | $1,128,000 | #08 |
| Mar 2024 | 764 | $1,492 | $1,140,000 | #12 |
| Mar 2024 | 764 | $1,335 | $1,020,000 | #01 |
Assuming the average selling price of $1,096,000:
| Selling price | $1,096,000 |
| Outstanding loan | $400,000 |
| Estimated sales proceeds (CPF + cash) | $696,000 |
Now let’s take a look at the options you’re considering.
Potential pathways
Option 1. Sell The Vales and buy Foresque Residences
Let’s look at how Foresque Residences has been performing.
| Year | Foresque Residences (resale) | YoY | D23 99y non-landed (resale) | YoY | All 99y non-landed (resale) | YoY |
| 2015 | $1,181 | – | $809 | – | $1,033 | – |
| 2016 | $1,095 | -7.28% | $785 | -2.97% | $1,129 | 9.29% |
| 2017 | $1,110 | 1.37% | $815 | 3.82% | $1,115 | -1.24% |
| 2018 | $1,160 | 4.50% | $876 | 7.48% | $1,153 | 3.41% |
| 2019 | $1,177 | 1.47% | $898 | 2.51% | $1,178 | 2.17% |
| 2020 | $1,178 | 0.08% | $936 | 4.23% | $1,173 | -0.42% |
| 2021 | $1,197 | 1.61% | $1,001 | 6.94% | $1,207 | 2.90% |
| 2022 | $1,339 | 11.86% | $1,108 | 10.69% | $1,337 | 10.77% |
| 2023 | $1,443 | 7.77% | $1,267 | 14.35% | $1,463 | 9.42% |
| Average | – | 2.67% | – | 5.88% | – | 4.54% |
*As the first resale transaction for Foresque Residences was done in 2015, I will look at the data over the last 8 years instead of 10
The table above indicates that the average growth rate of Foresque Residences over the past 8 years has been below average when compared to the growth rates of 99-year leasehold developments in D23 and across the island. Now, I will compare it to some neighbouring projects, all of which are also 99-year leasehold properties.
| Foresque Residences | Tree House | Eco Sanctuary | The Skywoods | |
| Lease start | 2011 | 2009 | 2012 | 2012 |
| No. of units | 496 | 429 | 483 | 420 |
| Avg 2-bedder price (in 2023) | $1,115,600 | $1,237,250 | $1,094,657 | $1,000,000 (only 1 transaction) |
| Avg 2-bedder PSF (in 2023) | $1,520 | $1,444 | $1,546 | $1,602 |
| Avg 2-bedder size (sqft) | 734 | 861 | 708 | 624 |
| Year | Foresque Residences (resale) | YoY | Tree House (resale) | YoY | Eco Sanctuary (resale) | YoY | The Skywoods (resale) | YoY |
| 2018 | $1,160 | – | $1,039 | – | $1,231 | – | $1,317 | – |
| 2019 | $1,177 | 1.47% | $1,073 | 3.27% | $1,269 | 3.09% | $1,290 | -2.05% |
| 2020 | $1,178 | 0.08% | $1,074 | 0.09% | $1,284 | 1.18% | $1,276 | -1.09% |
| 2021 | $1,197 | 1.61% | $1,158 | 7.82% | $1,321 | 2.88% | $1,347 | 5.56% |
| 2022 | $1,339 | 11.86% | $1,254 | 8.29% | $1,388 | 5.07% | $1,446 | 7.35% |
| 2023 | $1,443 | 7.77% | $1,458 | 16.27% | $1,543 | 11.17% | $1,518 | 4.98% |
| Average | – | 4.56% | – | 7.15% | – | 4.68% | – | 2.95% |
*As The Skywoods only has resale transactions from 2018 onwards, I will be comparing data over the last 6 years instead of 10
Looking at the tables above, it’s evident that Tree House, despite being the oldest development in the area, leads the pack. Among the four projects, it offers the lowest average price PSF for 2-bedders. However, due to its larger unit sizes, the overall property price is higher. When compared to the other three projects, buyers may find it worthwhile to pay an additional $100K – $200K for a notably larger living area.
In terms of growth rate between The Vales and Foresque Residences during the same period (2019 – 2023), The Vales clearly showed stronger appreciation at 10.63%, compared to Foresque Residences at 5.33%.
These are some of the recent 2-bedroom transactions in Foresque Residences:
| Date | Size (sqft) | PSF | Price | Level |
| Jan 2024 | 743 | $1,525 | $1,132,500 | #15 |
| Sep 2023 | 743 | $1,519 | $1,128,000 | #09 |
| Sep 2023 | 732 | $1,571 | $1,150,000 | #16 |
Let’s look at the costs involved should you decide to buy a 2-bedder at Foresque Residences. For calculation purposes, I will assume an average price of $1,136,833 and a 10-year holding period. Since I do not have your numbers, I will presume you take the maximum 75% loan and that the depreciation of $20K/year would be the cost of your car.
| Purchase price | $1,136,833 |
| BSD | $30,073 |
| 25% down payment | $284,208 |
| 75% loan | $852,625 |
| Description | Amount |
| BSD | $30,073 |
| Interest expenses (Assuming 30 year tenure at 4% interest) | $307,574 |
| Property tax | $11,260 |
| Maintenance fee (Assuming $250/month) | $30,000 |
| Car depreciation (for 7 years since that is the maximum loan tenure) | $140,000 |
| Total costs | $518,907 |
Option 2. Sell The Vales and buy Hillion Residences
As before, let’s look at how Hillion Residences has been performing.
| Year | Hillion Residences (resale) | YoY | D23 99y non-landed (resale) | YoY | All 99y non-landed (resale) | YoY |
| 2019 | $1,517 | – | $898 | – | $1,178 | – |
| 2020 | $1,443 | -4.88% | $936 | 4.23% | $1,173 | -0.42% |
| 2021 | $1,501 | 4.02% | $1,001 | 6.94% | $1,207 | 2.90% |
| 2022 | $1,597 | 6.40% | $1,108 | 10.69% | $1,337 | 10.77% |
| 2023 | $1,720 | 7.70% | $1,267 | 14.35% | $1,463 | 9.42% |
| Average | – | 3.31% | – | 9.05% | – | 5.67% |
Similar to The Vales, Hillion Residences was completed in 2017, with the first resale transaction done in 2019, providing limited data for analysis. Compared to other 99-year leasehold non-landed properties in D23 and across the island, Hillion Residences’ performance over the last four years hasn’t been remarkable.
However, it boasts a unique feature as an integrated development and stands out as the newest addition in the vicinity of the Bukit Panjang MRT station. Let’s examine the other 99-year leasehold projects in the area.
| Hillion Residences | The Tennery | Maysprings | |
| Lease start | 2013 | 2010 | 1994 |
| No. of units | 546 | 338 | 636 |
| Avg 2-bedder price (in 2023) | $1,270,833 | $1,066,500 | $947,063 |
| Avg 2-bedder PSF (in 2023) | $1,789 | $1,229 | $1,121 |
| Avg 2-bedder size (sqft) | 710 | 868 | 846 |
| Year | Hillion Residences (resale) | YoY | The Tennery (resale) | YoY | Maysprings (resale) | YoY |
| 2019 | $1,517 | – | $1,135 | – | $865 | – |
| 2020 | $1,443 | -4.88% | $1,073 | -5.46% | $864 | -0.12% |
| 2021 | $1,501 | 4.02% | $1,138 | 6.06% | $885 | 2.43% |
| 2022 | $1,597 | 6.40% | $1,219 | 7.12% | $977 | 10.40% |
| 2023 | $1,720 | 7.70% | $1,281 | 5.09% | $1,084 | 10.95% |
| Average | – | 3.31% | – | 3.20% | – | 5.92% |
Given that Hillion Residences is an integrated development, The Tennery offers only 1 and 2-bedroom types, and Maysprings is considerably older, it’s not entirely fair to compare them directly due to their distinct characteristics.
Interestingly, Maysprings experienced the highest appreciation over the last 4 years. One potential explanation could be its location, which is comparable to Hillion Residences. Despite not being an integrated development, residents still benefit from the convenience of having Hillion Mall just across the street. Comparing the average price PSF for 2-bedroom units, Hillion Residences is nearly 59% higher than Maysprings. Buyers may view it as a worthwhile trade-off to opt for an older and more spacious unit at a lower price while enjoying similar convenience.
As both The Vales and Hillion Residences only recorded their first resale transactions in 2019, comparing their growth rates over the last 4 years, The Vales demonstrated significantly stronger appreciation at 10.63% compared to Hillion Residences’ 3.31%.
These are some of the recent 2-bedroom transactions in Hillion Residences:
| Date | Size (sqft) | PSF | Price | Level |
| Mar 2024 | 710 | $1,788 | $1,270,000 | #08 |
| Jan 2024 | 710 | $1,830 | $1,300,000 | #15 |
| Aug 2023 | 710 | $1,774 | $1,260,000 | #13 |
We’ll also take a look at the costs involved should you buy a unit at Hillion Residences at the average price of $1,276,667 and hold it for 10 years.
| Purchase price | $1,276,667 |
| BSD | $35,666 |
| 25% down payment | $319,167 |
| 75% loan | $957,500 |
| Description | Amount |
| BSD | $35,666 |
| Interest expenses (Assuming 30 year tenure at 4% interest) | $345,407 |
| Property tax | $13,780 |
| Maintenance fee (Assuming $250/month) | $30,000 |
| Total costs | $424,853 |
Option 3. Sell The Vales and buy a 4-room HDB in Jelebu
As you’ve highlighted, one concern with this option is the 15-month waiting period after selling your private property. There’s no assurance that HDB will grant the waiver. Consequently, if the waiver is not approved and you lack alternative accommodation, you’ll need to rent a place, which could result in significant expenses.
Let’s take a look at the price movements of HDBs as compared to private properties.
| Year | HDB Resale Price Index (RPI) | YoY | Non-landed Private Property Price Index (PPI) | YoY |
| 2013-Q4 | 145.8 | – | 147.6 | – |
| 2014-Q4 | 137 | -6.04% | 142.5 | -3.46% |
| 2015-Q4 | 134.8 | -1.61% | 137.4 | -3.58% |
| 2016-Q4 | 134.6 | -0.15% | 133.8 | -2.62% |
| 2017-Q4 | 132.6 | -1.49% | 135.6 | 1.35% |
| 2018-Q4 | 131.4 | -0.90% | 146.8 | 8.26% |
| 2019-Q4 | 131.5 | 0.08% | 149.6 | 1.91% |
| 2020-Q4 | 138.1 | 5.02% | 153.3 | 2.47% |
| 2021-Q4 | 155.7 | 12.74% | 168.4 | 9.85% |
| 2022-Q4 | 171.9 | 10.40% | 182.1 | 8.14% |
| 2023-Q4 | 180.4 | 4.94% | 194.2 | 6.64% |
| Average | – | 2.30% | – | 2.90% |
Certainly, purchasing an HDB entails lower costs. However, if prioritising capital gains is important to you, opting for a private property might offer greater potential for growth. Over the past decade, HDBs generally experienced negative growth rates for most years until the pandemic happened. As the market recovers, it’s improbable that we’ll witness similar growth rates as observed in the past three years. Additionally, the government’s efforts to boost HDB supply to enhance affordability could further diminish the likelihood of good appreciation, especially for resale flats.
Here are some of the recent 4-room transactions along Jelebu Road:
| Date | Block | Level | Floor Area (sqm) /Flat Model | Price |
| Apr 2024 | 182 | 13 to 15 | 94Premium Apartment | $780,000 |
| Feb 2024 | 185 | 28 to 30 | 91Premium Apartment | $758,000 |
| Jan 2024 | 181 | 07 to 09 | 93Premium Apartment | $705,888 |
Presuming you purchase a unit at the average price of $747,963, let’s take a look at the costs involved to hold the HDB for 10 years.
| Purchase price | $747,963 |
| BSD | $17,038 |
| 25% down payment | $186,991 |
| 75% loan | $560,972 |
| Description | Amount |
| BSD | $17,038 |
| Interest expenses (Assuming 25 year tenure at 4% interest) | $194,656 |
| Property tax | $5,780 |
| Town council service & conservancy fee (Assuming $76/month) | $9,120 |
| Total costs | $226,594 |
Option 4. Rent out The Vales and rent another property for own stay
When comparing the performance of The Vales with that of Foresque Residences and Hillion Residences, it seems to be outperforming the latter two. Considering that it only reached its MOP two years ago and examining the price comparison between it and its neighbouring projects, there could still be potential for growth, making it a viable option to retain for a few more years.
However, let’s assess whether the figures align with this notion.
| Project | Avg 2-bedroom rental (Jan – Mar 2024) |
| The Vales | $3,600 (this was the last transaction in Dec 2023, no 2-bedders were rented out in the last 3 months) |
| Foresque Residences | $3,356 |
| Hillion Residences | $3,883 |
| 4-room HDB at Jelebu | $2,725 |
As I do not have your exact figures, these are the assumptions that I will be making.
Outstanding loan for The Vales: $400,000
Remaining loan tenure: 23 years (I am assuming you had the full 30-year tenure when you purchased the place in 2017)
Interest rate: 1.5% for year 2025, 4% for the remaining loan term
As before, let’s assume a 10-year holding period. Given that the HDB offers the same convenience as Hillion Residences but is more affordable, for calculation purposes, let’s say you rent that.
| Description | Amount |
| Interest expenses (Assuming 25 year tenure at 4% interest) | $124,774 |
| Property tax | $62,400 |
| Maintenance fee (Assuming $250/month) | $30,000 |
| Rental income (Assuming $3,600/month) | $432,000 |
| Rental expense (Assuming $2,725/month) | $327,000 |
| Total costs | $112,174 |
What should you do?
Let’s do a quick summary of the costs incurred with the 4 options.
| Option | Costs over 10 years |
| 1. Sell The Vales and buy Foresque Residences | $518,907 |
| 2. Sell The Vales and buy Hillion Residences | $424,853 |
| 3. Sell The Vales and buy a 4-room HDB in Jelebu | $226,594 |
| 4. Rent out The Vales and rent another property for own stay | $112,174 |
Upon reviewing the expenses, Option 4 emerges as the most favourable choice due to its lower overall costs. This is primarily because the purchase price of The Vales is actually lower compared to the other three options, which means a lower monthly mortgage. In other words, the cost to replace is expensive because your mortgage is low especially when you’re not upgrading in size. Additionally, the BSD has already been settled, constituting a significant sum saved.
However, this hinges on the condition that the rental expenses for an alternative accommodation are lower than the rental income generated from The Vales. For instance, if you were to rent a unit at Hillion Residences instead, the total costs would increase to $251,134.
Moreover, when considering the potential appreciation of the other three options, it may not be financially prudent to switch, given The Vales’ superior performance. It’s plausible that this trend will persist for a couple more years, especially considering it has a comparable price point with other 2-bedroom units in the vicinity, which are slightly older.
Taking all these factors into account, Option 4 appears to be the most viable choice. It allows you to stay near your parents in Bukit Panjang, be near an MRT so you don’t need to drive and has the lowest cost while allowing you to benefit from The Vales’ growth.
We hope that our analysis will help you in your decision-making. If you’d like to get in touch for a more in-depth consultation, you can do so here.
