• Seth Wu

Your "Virgin" Property Purchase: What Are Your Options?


Working hard for a couple of years and you finally have some savings. Maybe you are getting married, and planning to propose at the HDB hub by asking her "shall we apply for a BTO flat together?" Unromantic, but yet effective. Success rate seems high from what I heard. This is uniquely Singapore.


Of course I am not here to share with you what options you can have to propose. Rather, I'd like to share with you what are your options when you and your girlfriend or wife-to-be decide to start a family and purchase a property to be called your home. When deciding which option to choose, what you can take into considerations are:

  • Capital outlay

  • Loan

  • Time frame to upgrade your property

  • Possible future property price when it is time to sell

  • Possible profits

The above can give you a simple road map to upgrade your property for your family and for your wealth accumulation.


If you ask almost anyone, the typical route to start your first property purchase is to go apply a BTO flat. But, is this the only option for any young couple? I will share with you what are your options. In my sharing, the options will base on the following assumptions:

  • Couple age: both 28 year old

  • Each monthly income: $3500

  • Both Income increase at average of 2.5%pa*

  • Purchase a 1000sqf (approximately) 4 room flat or a 2-3 bedroom condo for young couple

  • Take HDB loan for HDB purchase

  • Assuming no grant taken

  • Possible Returns base on average growth of 4%pa* for private non-landed and 2.7%pa* for HDB flat (Chances of resale HDB flat to grow is slimmer than a BTO flat)

  • How many years to upgrade or to own 2 properties purchase



BTO Flat

Since I mentioned to apply for BTO flat first, let me start from here. BTO stands for Built-To-Order. It is one of HDB mode of sales for their new flats, generally via balloting system. This is to allow Singaporean to have a chance to buy brand new HDB flat unit direct from HDB. The first timers usually get a higher chance to get a ballot number. The smaller the number the higher your priority and more selection of available units.

Toa Payoh BTO Flat Artist Impression


Nowadays, BTO flat demand is high with the ratio of applications to available units reaching as high as 13:1**. In other words, the chance of getting a BTO flat is not high. But what if you manage to purchase one, what is your capital outlay and time line before you can earn money and upgrade?


BTO 4 room flat at Toa Payoh***

  • Estimated purchase price: $450,000 (can be as high as $550,000)

  • 10% down payment: $45,000 (can be all CPF)

  • Buyer Stamp Duty: $8,100

  • Legal and miscellaneous fee: about $1,000

  • Capital Outlay: approximately $54,100

  • HDB loan: $405,000 at 2.6% for 30 years

  • Monthly repayment: $1,621

Time frame:

  • 3 years to build before taking possession

  • 5 years to fulfill Minimum Occupancy Period (MOP)

  • Total time taken before you can upgrade: 8 years

Speculated Price of 4 room flat at Toa Payoh after 8 years: $556,898

Speculated Profits: $106,898 over 8 years


By the time you are allowed to sell the HDB flat, you will be 36 year old and you may have 2 children, probably going to primary school soon. Possibly your income could have grown to $4,500 each or $9,000 for both you and your spouse. By now, even though you are earning more, but due to your family financial obligation and commitment, and profit of only $106,898 from the HDB sales, you may not have much options to choose what kind of property to upgrade to, let alone trying to own 2 properties. Unless you already have substantial savings, you could comfortably upgrade to a condominium.



Resale HDB Flat

Buying resale HDB flat, the main differences from BTO flat are the age, limited supply but yet a better chance to secure your choice unit if you find one. Older resale flats are likely more expansive than BTO flats and may incur more renovation and repair cost, unless you can find one that is wonderfully renovated to your liking. So lets take a look at the numbers and time line.


Resale flat at Toa Payoh

  • Estimated purchase price: $600,000 (can be as high as $700,000)

  • 10% down payment: $60,000 (can be all CPF)

  • Buyer Stamp Duty: $12,600

  • Legal and miscellaneous fee: about $1,000

  • Capital outlay: approximately $73,600

  • HDB loan: $540,000 at 2.6% for 30 years

At this point, you will have a problem. Base on Mortgage Servicing Ratio (MSR), the combined income of $7000 can only borrow about $467,659. In order to buy the Toa Payoh resale flat, you will need to top up your down payment to $132,341 and your capital outlay will be $145,941.

Alternatively, you can look for a much older HDB flat in the same area or look for one in a different location, further away from central. Lets assume you go for a Punggol 4 room flat.


Resale flat at Punggol

  • Estimated purchase price: $450,000

  • 10% down payment: $45,000 (can be all CPF)

  • Buyer Stamp Duty: $8,100

  • Legal and miscellaneous fee: about $1,000

  • Capital Outlay: approximately $54,100

  • HDB loan: $405,000 at 2.6% for 30 years

  • Monthly repayment: $1,621

Time frame:

  • 5 years to fulfill Minimum Occupancy Period (MOP)

  • Total time taken before you can upgrade: 5 years

Speculated Price of 4rm flat at Punggol after 5 years: $514,120

Speculated Profits: $64,120 over 5 years


At this point, you will be 33 year old. When you plan to sell and upgrade, you have lesser profits from HDB and possibly family financial obligation with your 1 or 2 kids at home. To upgrade to a condominium will be tougher unless you have support from your parents or relatives.



Executive Condominium

The first Executive Condominium was built in 1999****. This is a special project by HDB that allow many Singaporean families to have an opportunity to own a condominium at a discounted price. But this discount comes with conditions.


  • Approval of loan is based on MSR and not Total Debt Servicing Ration (TDSR)

  • 5 years MOP apply

  • HDB rules and regulations apply

  • Forming of family nucleus is required

  • You are not allow to sell or rent out the whole unit within the first 5 years

  • After 5 years you can only sell to Singaporeans or PR.

  • The EC will only be fully privatized after 10 years which allow you to sell to Singaporean, PR and foreigners

EC pricing has been edging up in the recent years due to the increase in land cost, construction costs and others. Generally we are seeing the pricing of ECs are in the range of $1000 to $1100psf. So lets look at the numbers and time line.

Piermont Grand EC at Punggol

  • 3 bedroom, 840sqf (there is no 2 bedroom unit)

  • Estimated Purchase Price: $950,000

  • 25% down payment: $237,500 (5% cash, 20% CPF or cash)

  • Buyer Stamp Duty: $23,100

  • Legal and miscellaneous fee: about $3,000

  • Capital Outlay: approximately $263,600

  • Bank loan: $712,500 at 2% for 30 years

This is the part where many young couples will struggle with. Again, Base on MSR, the combined income of $7000 can only borrow around $467,659. If you want to buy this EC, you will need to increase your down payment to $482,341 and your capital outlay $508,441. Your alternative is to look for EC which is more than 5 year old (which is almost as good as buying a private condo). But, lets assume you have $508,441, and you decide to purchase this brand new EC.

  • New bank loan: $482,341 at 2% for 30 years

  • Monthly repayment: $1,728

Time frame:

  • 3 years to build before taking possession

  • 5 years to fulfill Minimum Occupancy Period (MOP)

  • Total time taken before you can sell or decouple: 8 years

Speculated Price after 8 years: $1,300,140

Speculated Profits: $350,140 over 8 years


Now you are 36 year old. With this substantial profits, you have more options. You can keep your condo and buy another private condo for investment. You can consider selling and buy 2 properties. There are other options too. For more details on your options, planning and how to go about executing the plan, please fill in your contact at the bottom of the page, I can arrange a consultation session with you.



Private Condominium (completed or near completion project)

Many think that buying a private condominium for young couples could be out of reach or may be a little too stretch for them. It could stretch you more, but I believe the benefits makes all the sacrifices worth it. You will probably not regret making the decision. Why? Lets take a look. Let us assume you go for a new, near completion project, selling below average as compare to many other new condos of recent times.


Tapestry at Tampines by CDL

  • Estimated completion: end 2020

  • 2 bedroom, 603sqf

  • Estimated purchase price: $880,000

  • 25% down payment: $220,000 (5% cash, 20% cash or CPF)

  • Buyer Stamp Duty: $21,000

  • Legal and miscellaneous fee: about $3,000

  • Capital Outlay: approximately $244,000

  • Bank loan: $660,000 at 2% for 30 years (TDSR)

  • Monthly repayment: $2,440

Time frame:

  • You can sell at any time

  • First 3 years there will be Seller Stamp Duty

Assuming you stay for 5 years, you will be 33 year old by then:

Speculated Price after 5 years: $1,070,654

Speculated Profits: $190,654 over 5 years


If you stay for 8 years before upgrade:

Speculated Price after 8 years: $1,204,340

Speculated Profits: $324,340 over 8 years


Here you will have many options just like buying a EC. But the key differences are:

  • Substantially lesser capital outlay

  • Loan approval base on Total Debt Servicing Ratio (TDSR)

  • No HDB rules & MOP for the first 5 years

  • You can sell at any time to anyone

The monthly repayment is $712 more as compare to buying a new EC, but you not just have the "freedom" from the limitations of owning a EC, you probably get better quality and facilities, and you don't have to wait too long to cash out, buy your 2nd property or to execute your upgrading plans.



To summarize the above 4 options, here is a quick comparison.




Above examples are based on many assumptions and basic calculations which may be relatable to many first time property buyers out there, to show you what options you can have and their comparison. There could be other factors not considered in the above options and calculations.


Your situation may be different. Everyone has their priority, preference and their unique circumstances.

Buying a property can be a very personal decision that can involve issues other than making profits and upgrading. That is why it is always at your best interest to engage, discuss and plan with a competent property agent.

There is two more options, and that is to rent and to purchase a new launch, under construction, private condominium project which I am not discussing here.

If you like me to have a discussion and planning session with you, please leave your contact details at the bottom of the page and I will be in contact with you soon.


*Base on singstat.gov.sg (2009 to 2019). The growth rates varies from locations and people. Figures used are based on national average.

** https://www.straitstimes.com/singapore/housing/bigger-bto-flats-in-ang-mo-kio-13-times-oversubscribed-tampines-11-times

*** https://esales.hdb.gov.sg/bp25/launch/20feb/bto/20FEBBTOTP_page_0687/pricing.html

**** https://en.wikipedia.org/wiki/Executive_Condominium#:~:text=Executive%20Condominium%2C%20or%20EC%2C%20is,clubhouses%2C%20playgrounds%20and%20so%20forth.


The content and information provided are for general information only. It should not be treated as an invitation or recommendation to buy or sell any specific property or product. Each illustration in the presentation or article is based on current information as at the date of publication. Readers are to consider the content as one of the many factors in making investment decision and should seek specific investment advice. Readers should carry out their own due diligence or verification of such information. The author and publisher of the article are not liable for any losses. All right reserved.

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