Buying a property in Singapore can be quite a daunting task, especially with the many housing options available, such as freehold vs leasehold properties, HDBs, and condos. In this guide, we will provide you with a comprehensive guide on these topics to help you make an informed decision. So, let's dive in!
In conclusion, the choice between freehold vs leasehold, HDB flats, and condos depends on factors such as budget, lifestyle preferences, and investment goals. Each option has its pros and cons, and understanding these differences can help you make an informed decision on the best housing option for you and your family.
Pros and cons
No need to worry about lease expiry
Generally higher resale value
More flexibility in terms of redevelopment
Usually more expensive
Limited supply, particularly in prime areas
More affordable than freehold properties
Greater variety of locations and types of properties
Likely that its value will increase in the future
Depreciating asset as the lease term reduces
Uncertainty surrounding lease extension or renewal
HDB MOP (Minimum Occupancy Period)
What is HDB MOP?
The Minimum Occupancy Period (MOP) is a mandatory period of time during which HDB flat owners must occupy their property before they can sell it on the open market or rent out the entire flat. The MOP is typically five years from the date of possession.
Key considerations during MOP
During the MOP, HDB flat owners must adhere to certain rules and regulations, such as not purchasing or investing in other private residential properties, whether local or overseas. After the MOP, flat owners can sell their property or upgrade to a private property, subject to eligibility and financial considerations.
Downpayment for a Condo
The downpayment for a condo in Singapore depends on several factors, including the purchase price, loan tenure, loan-to-value (LTV) ratio, and the type of loan. In general, a buyer needs to pay a minimum downpayment of 5% to 25% of the property's price, depending on the LTV ratio and whether the loan is from A financial institution or the government agency responsible for housing development (Housing and Development Board or HDB).
Different types of loans
There are two primary types of loans for buying a condo in Singapore: HDB loans and bank loans. HDB loans have a maximum LTV ratio of 90%, meaning the downpayment can be as low as 10%, with 5% paid in cash and the remaining 5% in CPF Ordinary Account (OA) funds. Bank loans, on the other hand, have a maximum LTV ratio of 75%, requiring a higher downpayment of 25%, with at least 5% in cash and up to 20% using CPF OA funds.
Freehold properties grant the owner perpetual ownership, while leasehold properties have a fixed lease term, typically 99 years in Singapore.
You can buy a private property after fulfilling the MOP for your HDB flat, subject to eligibility and financial considerations.
The downpayment for a condo ranges from 5% to 25% of the purchase price, depending on the loan-to-value ratio and whether you opt for an HDB loan or a bank loan.
Lease extensions are subject to approval from the original landowner and may require the payment of a premium. However, there is no guarantee that a lease extension will be granted.
Home | HDB Condo
Freehold vs Leasehold
Definition and Comparison
Freehold Condo properties are those where the owner has complete ownership of the land and property in perpetuity. On the other hand, leasehold properties are those where the ownership of the land is granted to the property owner for a fixed period, typically 99 years in Singapore.
When the lease expires, the land reverts back to the original owner, and the property owner may need to either pay a premium to extend the lease or sell the property back to the original owner.
HDB vs Condo: Comparing the Two Housing Options
HDB flats are generally more affordable compared to condos, as they are subsidized by the government. Condos, being private properties, are priced higher due to their premium features, facilities, and often more desirable locations. However, the price difference varies depending on factors such as location, size, and age of the property.
Condo residents are required to pay monthly maintenance fees to cover the upkeep of the common areas and facilities. These fees can range from a few hundred to over a thousand dollars per month, depending on the size and facilities of the development. In contrast, HDB residents pay a much lower conservancy fee, which covers basic cleaning and maintenance of common areas.
Amenities and facilities
Condos typically offer a wide range of amenities and facilities, such as swimming pools, gyms, tennis courts, BBQ pits, and function rooms, which are not commonly found in HDB estates. These facilities add to the attractiveness and lifestyle appeal of living in a condo. HDB estates, on the other hand, usually have basic amenities like playgrounds, parks, and fitness corners.
Restrictions and regulations
HDB flats are subject to certain restrictions and regulations, such as the MOP, ethnic integration policy, and limitations on the number of properties one can own. Additionally, HDB flat owners cannot purchase private properties during the MOP. On the other hand, condos offer more flexibility and freedom, as there are fewer restrictions on ownership and usage.