Real Truth - Sell HDB Buy 2 Condos? Buy Condos Without Using Saving?
While it is technically possible to sell one HDB and buy 2 condos, the feasibility of it largely depends on your financial background and current property.
Some people may be able to sell one HDB and buy 2 condos, provided they live in a high-value HDB flat.
Getting the calculation rights is not easy, and knowing how to successfully make such transactions work is more challenging.
There are no loopholes. Whether you can sell one HDB and buy 2 condos, or buy a condo without using your savings, really depends on your income, your loan and your proceeds from the current property.
Answering these questions is like solving a primary school problem-sum. You must first calculate how much proceeds you can receive from selling your house. Then, you must identify how much you can borrow. With these two amounts combined, you can determine if you can afford private property.
The reason why many agents are sharing “sell one buy two” tricks is simply that they are targeting Singaporeans who are sitting on a fully-paid HDB flat which has appreciated by many multiples. While they were lucky to purchase these flats at a low price, they have not sold them despite the constant depreciation.
Your instalment on private property may or may not be higher, depending on the extension of the loan tenure. For a 35-years-old person, the maximum loan tenure for an HDB flat is 25 years but the loan tenure for private property can go up to 30 years. The extension of loan tenure results in a drop in instalments. A good property agent will be able to calculate whether you can afford the instalments.
Selling one HDB flat to buy 2 condos is entirely possible. Suppose both husband and wife are working and they sell away their HDB flat. Each partner can purchase one condo, but ultimately the ability to afford will depend on the value of the HDB flat and their income status. Residents of high-value HDB flats like Pinnacle@Duxton or executive mansionettes are more likely to be able to afford private property. Looking at the price chart of HDBs in your area will allow you to determine whether it makes financial sense to continue holding onto your property.
Furthermore, whether you are purchasing the private property alone or together makes a difference. Joint purchase means you can use both CPF accounts and the combined income. Should both partners have a high income (or with one partner having a slightly lower income), then one partner can purchase a two- or three-bedroom property for ownstay while the other partner can purchase a one-bedder for investment purposes.
These decisions are not simple to calculate because getting the correct numbers is not easy. Besides the calculations, knowing the “how” and “what” of the transaction is not very straightforward and involves strategy. A good property agent should be able to advise accordingly.