We’re Retirees With Two Fully Paid Condos That Have 51 Years Left — Should We Sell Both And Apply For A BTO?

Hi Stacked,

My husband and I are both over 55 years old, and we own two units at Laguna Park. Both units are fully paid up with no outstanding loans. We are both retired and currently live in one unit, while the other unit is rented out.

But the 99-year leasehold Laguna Park was completed in 1978 and has about 51 years left on its lease. Moreover, the recent en bloc attempt was unsuccessful. Should we sell both units and apply for a BTO flat, in order to mitigate the negative impact of lease decay and to better position ourselves for retirement?

Due to our age, we are unlikely to qualify for another housing loan, so our next property purchase would need to be fully funded using the proceeds from selling the Laguna Park units.

We would like to remain in the East, preferably around Siglap, Bayshore, or Bedok since our children and extended family all live there.

We have never owned a HDB flat before, and we understand that this may qualify us as first-time applicants. There is an upcoming 860-unit Build-To-Order (BTO) project that will be released as part of the upcoming October 2026 BTO sales exercise. What should we consider if we were to apply for this project?

Do you think this is a suitable route for us, what key considerations we should be aware of, and whether we would also be eligible to apply for Sale of Balance Flats (SBF).

Thank you.

(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, and thanks for writing to us! 

It’s great to hear that both of your Laguna Park units are paid off, this can help to mitigate some of the financing issues you may face. While the negative impact of lease decay is a concern, our view is that this is balanced out by the strong locational attributes of Laguna Park.

In addition to the persistent and deep catchment of residential demand for homes in Marine Parade, the emergence of the Thomson-East Coast Line – in particular Siglap MRT station near Laguna Park – is a significant public transport connectivity upgrade.

Let’s expand and explore the possibilities and restrictions of the property journey that you’re considering.

First, can you apply for a BTO or SBF unit from HDB?

Since both of you are more than 55 years old, the rules differ depending on the type of HDB flat you apply for.

In the case of two-room Flexi flats, you may apply before selling your units at Laguna Park. The advantage here is that you can continue living in your current home, while applying for an upcoming BTO unit.

However, if you do get the two-room flat, you have to sell both Laguna Park units within six months. This may feel like a rushed sale and there are owners who may not be comfortable with the idea of being ‘forced’ to accept relatively unappealing offers due to the time limit.

We think that this comes down to personal preference, whether you want to apply for the BTO first or sell the condo units first. But a two-room BTO flat offers you those options.

On the other hand, if you intend to apply for a larger-sized flat such as a three- or four-room flat, we think that the projects in the October 2026 BTO sales exercise are not an option. In addition to having to sell both Laguna Park units before applying, there’s a wait-out period of 2.5 years (30 months) before you can apply for those types of flats.

The same eligibility rules also apply to flats offered in the Sale of Balance Flats (SBF) exercise. Even though first-time applicants usually have a higher chance of a successful ballot, this doesn’t necessarily mean applicants get a favourable queue number.

Overall, it seems that applying for a two-room BTO flat offers a greater flexibility at the start of the process, since you don’t need to immediately sell the units at Laguna Park. But this comes at the cost of a much smaller living space than what you are used to, and the weight of urgency when you need to sell the condo units within six months.

A larger flat will provide an amount of space that is closer to your current home. Frankly speaking, a 30-month wait time is a major obstacle for most buyers. This stems from inconveniences and added costs like significant rental costs if you don’t secure alternative accommodation during that time.

What are your other housing options? 

From our perspective, most of your deliberations depend on how much you rely – or intend to rely – on rental income to fund parts of your retirement. Another concern is how much cash you’d like to have after your next purchase, and whether you’d be happy living in a smaller home.

This is where personal finance issues trump property considerations. Here’s an example:

We have encountered readers who have a targeted monthly income when they retire. If their rental property meets this income threshold, and they intend on holding on to their property, it’s immaterial to them how much resale gain or rental yield they may reap. For retirees like this, their priority is that their investment assets fulfill their retirement target.

There are also retirees who also think that they need to prioritise space, like one we’ve encountered whose photography hobby required a dark room.

On the other hand, another retired couple right-sized from a landed home to a three-room flat because they wanted to do less cleaning and maintenance. Having a smaller flat improved their quality of life and gave them more free time.

These are all considerations that should come ahead of concerns such as lease decay  or property type. Nailing these considerations down helps you to gauge whether it’s reasonable to sell your property, how to rightsize, and whether HDB or private property are right picks for you.

That being said, let’s examine the impact of lease decay issue on the resale value at Laguna Park.

So far, the negative impact of lease decay on the value of a 99-year leasehold property was a given. But our research over the years suggests that not all projects suffer from lease decay in the same way, and knowing the numbers helps inform your decision.

So let’s take a look at average resale prices at Laguna Park.

Average 3-bedroom rental yield

To be clear, the declining land tenure at Laguna Park is a valid concern. With around 51 years left on the lease, and the recent en bloc attempt falling through, this does limit the condo’s long-term prospects.

That said, we still don’t think the data suggests you need to rush to sell your units.

Over the past decade, Laguna Park’s average resale price grew from $821 psf to $1,192 psf, which works out to an annualised growth rate of 3.81%. That’s slightly behind the average price growth of 4.32% in District 15, but its almost identical to the entire private non-landed residential market.

Additionally, District 15 has seen plenty of new launch projects in recent years. So, maybe comparing Laguna Park directly against the district isn’t entirely fair.

A better question may be: Are buyers still willing to buy into Laguna Park? 

Looking at the transaction volumes, the answer so far seems to be yes. Assuming your units are both three-bedders, average prices for this unit type have climbed from about $1.33 million in 2015 to around $1.97 million today.

Crucially, resale volume indicates that these units still attract many buyers. If lease decay were already having a significant negative impact, we’d expect transaction activity to noticeably fall.

To be clear, some of this was helped by the recovery in the private residential market after the end of the Covid-19 pandemic. Since then, buyers increasingly value larger living spaces and older condos with bigger unit layouts have seen renewed interest.

So, while lease decay is a worry further down the road, we don’t think demand – and subsequently pricing – for Laguna Park is going to take any sudden dives.

The rentability of the units at Laguna Park should also be considered. Average rents for three-bedroom units have increased from around $3,250 a month in 2015 to about $4,860 today. At roughly a 3% gross yield, it’s not outstanding but for retirees like you, it offers regular recurring income.

In our view, the unsuccessful en bloc is actually the bigger takeaway. It means we probably wouldn’t build a retirement plan around the hope of a future collective sale. It’s possible that the same issues we brought up here is what impedes en-bloc possibilities: if the current owners sell, they lack suitable replacement units – at an acceptable price – for a property of a comparable size.

A side-note about price increases in replacement properties.

Time favours right-sizers rather than upgraders. For example, if property prices go up 6% over the next year this would lead to a $24,000 in the asking price of a $400,000 flat today. Whereas a 6% increase on a $1.8 million condo unit is an increase of $108,000. 

This is why right-sizers generally have a little more breathing room. Property prices may continue to rise over time, but because you’re moving into a lower-priced property rather than a more expensive one, you’re not racing against the market the same way an upgrader usually faces.

What would each route leave you with? 

We think that each option leads to a fairly different retirement position.

Based on an estimated value of around $1.97 million for each Laguna Park unit, keeping both means that you’ll own approximately $3.94 million in property assets, while retaining the rental income from one unit. Selling one unit while keeping the other would free up around half of that value for retirement, while allowing you to continue living in your current home.

The trade-off is that the range of divestment opportunities will continue to diminish over the years – but this is not an immediate problem.

Alternatively, if you sell both condo units and move into a new two-room Flexi BTO or SBF flat, this would realise the value of the condo units and boost your capital during retirement. If we assume a purchase price of around $150,000 for your two condo units, you could potentially have about $2.44 million left in cash or CPF after the divestment.

The downside is that you’d be giving up your rental income, and moving into a much smaller home.

The option of buying one new condo in District 15 sits somewhere in the middle. It lets you move straight into a newer home in the area you prefer, while still leaving an estimated $2.18 million to $2.93 million for your retirement, depending on whether you buy a one- or two-bedroom unit. The trade-off is that you’d no longer have the rental income from your second property.

Finally, replacing both Laguna Park units with two newer condos allows you to keep both a home and an investment property, but it also ties up much more of your capital. Based on our assumptions, you would be left with around $1.17 million in retirement funds, before transaction costs, together with whatever rental income the replacement investment property generates.

These figures are illustrative only. They don’t include costs such as Buyer’s Stamp Duty (BSD), legal fees, agent commissions, renovation, maintenance charges or property taxes. Even so, they help illustrate the broad trade-offs between preserving rental income, reducing exposure to lease decay, and freeing up capital for retirement.

A quick note on Additional Buyers Stamp Duty (ABSD), in the off chance it matters.

Depending on when you bought the second unit at Laguna Park, you may have paid lower or no ABSD back then. But unless each of you buy a different unit under your own names, the second residential property purchased comes with 20% ABSD, based on prevailing regulations.

This is worth keeping in mind if you decide to sell the rental unit (if you later regret this decision and want a rental asset again) you may now have to do it with ABSD on your back.

The decision can be pricier to reverse, compared to prior decades.

Our conclusion

If we had to leave you with one thought, it would be this: don’t let lease decay alone make the decision for you. So far, Laguna Park has continued to hold up reasonably well, and the bigger question is whether your current housing arrangement still supports the retirement lifestyle you want.

However, if you have already been considering a sale, the current market does present a good opportunity to do so, at a time when buyer demand for larger units is strong. Laguna Park has performed well in recent years as demand for larger-sized homes grows in this post-pandemic era. But we can’t tell how long this trend in consumer appetite will last.

Over a much longer period, such as 10 – 15 years, the pool of prospective buyers could shrink due to the negative impact of lease decay, even if this demand for spaciousness were to persist. The unsuccessful collective-sale attempt also means that it wouldn’t be prudent to rely on an en-bloc exit.

Frankly speaking, the BTO options are challenging unless you’re okay to accept a two-room flat. The 30-month wait out period is not only an inconvenience, it will add substantial rental costs. Moreover, in our experience, moving twice in just over two years is quite disruptive to most people’s lives. For this reason, we probably wouldn’t place this too high at the top of the options. 

Alternatively, selling one condo unit could allow you to unlock a meaningful amount of capital while preserving either unit. This may offer a more gradual way to reduce your exposure to Laguna Park’s aging lease, without committing immediately to a smaller home or the wait for a BTO project to be completed.

If you do wish to move into a newer property, buying one replacement condo in the East may provide greater certainty over location and timing than a BTO. Selling both units and purchasing two newer condos could also preserve both a home and rental income, although this is clearly the most expensive option.