We Make $27k Per Month And Own An HDB And Condo: Should We Sell The HDB To Buy Another Resale?

Dear Stacked homes,

Thanks for all the valuable information you have provided. I would like to ask for your advice on our situation.

We are a mid-40 couple with 3 young children. We have a combined income of approx 27k per month, and we have been staying in a resale 5-room HDB near Lakeside MRT for the last 13 years. We also owned a 2BR unit in Botanique at Bartley which we bought in 2016.

We have been debating over the last few years, if we should sell our HDB and buy a new/resale 3-4BR condo near Lakeside MRT. However, there are not many new condos, until recently, yet the prices are sky high (Factoring future prices.) especially for a 4BR condo.

• Option 1: stay put in HDB, keep Botanique and continue to rent.

• Option 2: sell both, get a new condo

• Option 3 : Get a resale condo of lower cost, and keep Botanique. 

We are keen on option 3, but we are also worried about the capital appreciation if we are thinking of exit plans in 6-10 years.

Which of the condos would hold best for capital appreciation - Caspian, Lakefront, Lakeshore, Lake Grande if we were to enter now? 

Thanks,

---

Hi there,

Thanks for reaching out to us.

As the saying goes, "The best time to buy a property was yesterday." Though often said in jest, it does hold some truth. With land and construction costs continually rising, it's only natural to expect prices of new properties to follow suit. Additionally, the price gap between HDB flats and private properties continues to widen, making it increasingly challenging for homeowners to upgrade from public to private housing, so your dilemma is understandable here. 

Before going into the pathways you’re considering, let’s start by looking at the performance of your existing properties. 

Performance of existing properties

5-room HDB

As we do not know the specific block you're currently staying in, here are some of the recent transactions for 5-room flats that are within walking distance of Lakeside MRT station.

Date	Block	Level	Size (sqm) & unit type	Completion year	Price
Sep 2024	529	13 to 15	118.00 Improved	1982	$620,000
Aug 2024	468	01 to 03	130.00 Improved	1985	$585,000
Jun 2024	461	04 to 06	121.00 Improved	1985	$570,000
May 2024	529	01 to 03	118.00 Improved	1982	$560,000
May 2024	532	01 to 03	118.00 Improved	1982	$588,000
May 2024	533	16 to 18	118.00 Improved	1982	$610,000
May 2024	345	04 to 06	121.00 Improved	1997	$660,000
May 2024	354	07 to 09	120.00 Improved	1997	$647,777

Year	5-room HDBs in Jurong West	All 5-room HDBs
2013	$409	$445
2014	$383	$422
2015	$367	$405
2016	$376	$411
2017	$367	$419
2018	$350	$417
2019	$354	$415
2020	$373	$429
2021	$410	$480
2022	$451	$520
2023	$475	$543
Average growth rate	1.66%	2.13%

While the average growth rate for 5-room flats in Jurong West is lower compared to the overall growth rate of all HDB flats, this can vary depending on the specific cluster.

In a recent article, we noted that larger unit types, such as 4 and 5-room flats, have outperformed 3-room flats when it comes to older properties. Despite the lease decay issue that affects ageing leasehold properties, these larger units still experience growth during market upswings. In particular, older 5-room flats have shown the strongest performance over the past decade.

Flat Type	5 ROOM
Year	1980 – 1990	2010 – 2020
2013	$571,371	$712,654
2014	$547,093	$827,600
2015	$539,496	$909,485
2016	$548,537	$833,561
2017	$552,698	$765,952
2018	$532,676	$745,114
2019	$528,019	$645,633
2020	$530,707	$631,037
2021	$592,566	$689,930
2022	$643,078	$740,113
2023	$676,126	$773,757
2024	$699,885	$805,123
ROI (13 – 24)	1.9%	1.1%
ROI (13 – 19)	-1.3%	-1.6%
ROI (19 – 24)	5.8%	4.5%

In addition to the ongoing transformation of the Jurong Lake District, your flat's proximity (likely within 1km) to Rulang Primary School, one of the most prestigious schools in the western part of the island will help in supporting its demand. 

Botanique @ Bartley

These are some of the recent 2-bedroom transactions in Botanique @ Bartley:

Date	Size (sqft)	PSF	Price	Address
Jul 2024	753	$1,964	$1,480,000	221 Upper Paya Lebar Road #09
Jun 2024	732	$2,029	$1,485,000	237 Upper Paya Lebar Road #10
Jun 2024	657	$1,934	$1,270,000	233 Upper Paya Lebar Road #14
Jun 2024	732	$1,981	$1,450,000	229 Upper Paya Lebar Road #08
Jun 2024	753	$1,940	$1,462,000	221 Upper Paya Lebar Road #11
Jun 2024	732	$2,029	$1,485,000	227 Upper Paya Lebar Road #08
May 2024	861	$1,951	$1,680,000	221 Upper Paya Lebar Road #17
May 2024	743	$2,006	$1,490,000	221 Upper Paya Lebar Road #12
May 2024	732	$1,947	$1,425,000	231 Upper Paya Lebar Road #10

As the first resale transaction for the project was only done in 2020, we only have the last 4 years of resale data to look back on. 

Year	Botanique @ Bartley	D19 99y non-landed	All 99y non-landed
2020	$1,484	$1,027	$1,173
2021	$1,564	$1,107	$1,207
2022	$1,667	$1,258	$1,337
2023	$1,807	$1,373	$1,463
Average growth rate	6.79%	10.19%	7.70%

Over the past four years, while the project has appreciated well, it has been trailing behind other developments in D19 and across the island. Since you purchased it as a new launch in 2016, let's also examine the growth rate from then until now.

Year	Botanique @ Bartley
2016	$1,301
2017	$1,297
2018	$1,355
2019	$1,493
2020	$1,489
2021	$1,564
2022	$1,667
2023	$1,807
Average growth rate	4.87%

Transactions done in 2018, 2019, and partially in 2020 were primarily sub-sale transactions. The majority of the growth occurred during the sub-sale and resale periods, rather than at the initial launch, where developers often use a pricing strategy that gradually increases the price per square foot (PSF). This indicates a healthy level of demand for the project in the secondary market.

Let’s also take a look at how the project is faring in comparison to the neighbouring developments. 

Project	Number of units	Completion year	Tenure
Botanique @ Bartley	797	2019	99 years
Bartley Ridge	868	2016	99 years
Bartley Residences	702	2015	99 years

Year	Botanique @ Bartley	Bartley Ridge	Bartley Residences
2020	$1,484	$1,411	$1,337
2021	$1,564	$1,470	$1,369
2022	$1,667	$1,583	$1,502
2023	$1,807	$1,742	$1,661
Average growth rate	6.79%	7.30%	7.56%

Although Botanique @ Bartley’s performance over the past 4 years has slightly lagged behind the other two developments, the difference isn't too significant. Given that it is the newest development in the area with the highest average price psf, the other projects had more room to catch up.

In the vicinity, there is a new launch project, Bartley Vue, which is expected to obtain its TOP in 2026. Like the other 3 projects, it's a 99-year leasehold condo, with 115 units. The average transacted price psf for Bartley Vue is $1,966.

The Bartley area is a relatively small estate, and the URA Master Plan indicates that there are no other available land plots near the MRT station. This means that buyers interested in this area are limited to the existing developments, which could help sustain demand and support prices.

Now, let's review the costs associated with the various options you're considering.

Potential pathways

Remain status quo

Since we do not have all your financial details, the following assumptions will be used for our calculations:

• The average purchase price for a 2-bedroom unit at Botanique @ Bartley in 2016 was $862,698. We will assume this as your purchase price, with an 80% loan at a 3.5% interest rate.
• Assuming you are both 45 years old now, you would have purchased Botanique @ Bartley at age 37, giving you a maximum loan tenure of 28 years.
• Your current outstanding loan balance is estimated to be $556,092, with 20 years remaining on the tenure.
• Over the past decade, HDB prices increased at an average annual rate of 2.3%. Based on this growth rate and the average value of 5-room flats near Lakeside MRT station over the last 6 months, estimated at $609,333, your flat would have been purchased for around $453,390, 13 years ago. We’ll assume you took an 80% loan at a 3.5% interest rate with a 25-year tenure.
• Your current outstanding loan for the flat is estimated to be $213,261, with 12 years remaining on the tenure.
• The average rent for a 2-bedroom unit at Botanique @ Bartley over the past 3 months is $3,718, which we will use as the rental estimate.

For calculation purposes, we will use a 10-year timeframe. 

Cost of holding the HDB

Interest expense (Assuming a 4% interest and 12-year tenure)	$53,796
Town council service & conservancy fees (Assuming $90/month)	$10,800
Property tax	$4,060
Total cost	$68,656

Gains from holding Botanique @ Bartley

Interest expense (Assuming a 4% interest and 20-year tenure)	$181,121
Maintenance fees (Assuming $250/month)	$30,000
Property tax	$65,230
Rental income	$446,160
Agency fees (Assuming its paid once every 2 years)	$20,265
Total gains	$149,544

Total gains if you were to take this pathway: $149,544 - $68,656 = $80,888

Sell both and get a new condo

Once again, since we don't have your exact figures, we'll use the same outstanding loan amounts mentioned earlier to estimate your potential sales proceeds and assess your affordability.

Selling the HDB

For the selling price, we are using the average price of 5-room flats in the vicinity of Lakeside MRT station transacted over the last 6 months. 

Selling price	$609,333
Outstanding loan	$213,261
Sales proceeds (CPF + cash)	$396,072

Selling Botanique @ Bartley

Here, we are using the average price of 2-bedroom units sold over the last 6 months as the selling price.

Selling price	$1,432,654
Outstanding loan	$556,092
Sales proceeds (CPF + cash)	$876,562

Combined affordability

Maximum loan based on ages of 45 with a combined monthly income of $27K, at a 4.8% interest	$2,288,286
CPF + cash	$1,272,634
Total loan + CPF + cash	$3,560,920
BSD based on $3,560,920	$153,255
Estimated affordability	$3,407,665

Looking at the latest launch in the Lakeside area, Sora, the most affordable 3-bedroom unit (936 s qft) at the moment is priced at $2.05M, which is within your budget. For the 4-bedroom units, pricing is available only upon request from the developer. However, based on recent transactions, they are estimated to be around $3.3M. This falls within your budget but would require you to fully maximise your loan capacity and utilise all available funds.

Since you plan to sell both properties to fund the new purchase, you will need to arrange for temporary accommodation, as the project is only expected to obtain its TOP in 2028, which is 4 years away. This means you would incur significant rental expenses during this period.

An alternative approach would be to sell Botanique @ Bartley first and use the proceeds to fund the purchase. You could then stay in your HDB flat while awaiting the completion of the new project and sell the HDB within 6 months of the new project's TOP.

However, this option would affect two things: First, your LTV ratio would drop to 45% since you would be buying a second property. Second, ABSD will be payable for the new launch, although you could qualify for a remission if you sell the HDB within 6 months of the project obtaining its TOP considering it is a matrimonial property (property will have to be purchased under both your names).

Having said that, this second option might require a CPF or cash top-up due to the reduced LTV and ABSD. Let’s take a look at the funds required assuming you purchase a 3-bedder:

Purchase price	$2,050,000
BSD	$72,100
ABSD	$410,000
Maximum loan (45% LTV)	$922,500
Funds required	$1,609,600

With the sales proceeds from Botanique @ Bartley amounting to $876,562, you would need to contribute an additional $733,038 to complete the purchase, which is a substantial sum.

Let’s instead assume that you sell both properties and rent for 4 years.

Purchase price	$2,050,000
BSD	$72,100
CPF + cash	$1,272,634
Loan required	$849,466

Based on the Q2 HDB rental statistics, the median rent for a 5-room flat in Jurong West is $3,500. We will use this as the rental price. 

BSD	$72,100
Interest expense (Assuming a 4% interest and 20-year tenure)	$276,675
Maintenance fees (Assuming $350/month)	$25,200
Property tax	$23,340
Rental expense	$168,000
Total cost	$565,315

*Given that it is a new launch, maintenance fees and property tax will only be payable upon TOP

Buy a more affordable resale condo and keep Botanique @ Bartley

Among the 4 condos you've shortlisted, The Lakeshore has the lowest average transacted price for a 3-bedroom unit over the past 6 months, at $1,654,265. Let’s use this as the purchase price. Assuming that Botanique @ Bartley is under both your names, you will be subjected to ABSD and your LTV ratio will be reduced.

Purchase price	$1,654,265
BSD	$52,313
ABSD	$330,853
Maximum loan (45% LTV)	$744,419
Funds required	$1,293,012

If Botanique @ Bartley is jointly owned by both of you, this option might not be feasible due to the significant amount of funds required. Even after accounting for the sales proceeds from the HDB, you would still need to top up nearly $900,000.

However, if Botanique @ Bartley is owned under only one name, this pathway might be feasible, depending on your individual loan amounts.

Purchase price	$1,654,265
BSD	$52,313
CPF + cash	$396,072
Loan required	$1,310,506

At age 45 and with an interest rate of 4.8%, the individual purchasing this property would need a minimum monthly income of $16,000 to qualify for the loan amount mentioned. For calculation purposes, let's assume this is the case.

Cost of purchasing and holding a unit at The Lakeshore

BSD	$52,313
Interest expense (Assuming a 4% interest and 20-year tenure)	$426,837
Maintenance fees (Assuming $350/month)	$42,000
Property tax	$24,430
Total cost	$545,580

Total cost if you were to take this pathway: $545,580 - $149,544 = $396,036

Let’s now take a look at how the 4 projects you’ve picked out are performing.

Performance of shortlisted condos

Project	Number of units	Completion year	Average 3-bedroom price (last 6 months)
Lake Grande	710	2019	$1,750,000 (Just one transaction)
The Lakefront Residences	629	2014	$1,717,700
Caspian	712	2012	$1,724,000
The Lakeshore	848	2008	$1,654,265

Year	Lake Grande	The Lakefront Residences	Caspian	The Lakeshore	D22 99y non-landed	All 99y non-landed
2013			$1,145	$1,158	$955	$1,057
2014			$1,131	$1,067	$921	$1,029
2015		$1,291	$1,045	$1,085	$898	$1,033
2016		$1,279	$1,053	$1,045	$893	$1,129
2017		$1,234	$1,059	$1,028	$892	$1,115
2018		$1,304	$1,116	$1,074	$1,052	$1,153
2019		$1,314	$1,076	$1,061	$1,014	$1,178
2020	$1,505	$1,323	$1,123	$1,008	$992	$1,173
2021	$1,559	$1,315	$1,168	$1,073	$1,136	$1,207
2022	$1,627	$1,385	$1,259	$1,191	$1,243	$1,337
2023	$1,729	$1,548	$1,410	$1,350	$1,316	$1,463
Average (2020-2023)	4.74%	5.50%	7.93%	10.27%	9.94%	7.70%
Average (2015-2023)	-	2.40%	3.91%	2.97%	5.16%	4.54%
Average (2013-2023)	-	-	2.25%	1.76%	3.52%	3.40%

From the tables above, it is evident that the overall price difference for a 3-bedroom unit among the four projects is not significantly large. Even with The Lakeshore being over a decade older than Lake Grande, the price gap is about $100,000. However, when considering the average price psf, there is a notable difference, suggesting that older projects like The Lakeshore have larger sizes, which could offer a more comfortable living space.

The pandemic created a unique market situation over the past couple of years, leading to substantial price growth especially in larger unit types, including for older properties. Between 2020 and 2023, older projects experienced a higher rate of appreciation compared to newer ones likely due to the larger living spaces that they offer and at a more affordable price range. 

While property prices generally declined following the multiple rounds of cooling measures introduced in 2013, the numbers show that The Lakefront Residences (which is newer than Caspian and The Lakeshore) enjoyed a much faster recovery.

The URA Master Plan reveals that there are limited land plots available near the MRT station. Of these, only one plot is designated for residential development, while two others are reserve sites, meaning their future uses have yet to be determined.

What should you do?

We will do a quick summary of the 3 pathways you’re considering.

Potential pathways	Number of properties owned	Costs incurred over 10 years
Remain status quo	1 HDB, 1 condo	$80,888
Sell both and get a new condo	1 condo	$565,315
Buy a more affordable resale condo and keep Botanique @ Bartley	2 condos	$396,036

For option 3, do note that it may not be feasible if Botanique @ Bartley is jointly owned unless decoupling is an option. The substantial ABSD and reduced LTV for purchasing a second property would require a significant amount of CPF or cash top-up if Botanique @ Bartley is held jointly.

Alternatively, you might consider selling both properties and purchasing two separate properties. Without knowing your individual incomes, it's challenging to determine if this is a viable option.

Among the three pathways, options 1 and 3 would enable you to own two properties, allowing you to separate your primary residence from your investment properties. This approach offers diversification, greater flexibility, and a stream of passive income that can help offset some of your expenses. Additionally, an HDB or an older resale condo could provide a more comfortable living space compared to a newer property which is likely to be smaller. As such, options 1 and 3 may be more suitable

Between the two pathways, while maintaining the current status quo incurs lower costs, it means you could miss out on the potential gains from optimising the profits from both properties. Given that you are in your mid-40s, you are still in a favourable position to leverage on the mortgage.

By keeping your residence and investment properties separate, the appreciation rate of your primary residence may become less critical. Instead, you can prioritise a living space that better suits your family's needs and offers a higher level of comfort.