If you currently staying in an HDB flat, and you are planning to move to a private property, should you hold your current HDB flat and either rent out or sell it and buy another private residential for investment?
Private home prices increased 3.9% and HDB resale flat prices decreased 0.8% in the first quarter 2018. Private home continues an upward trend after the 0.8% increase seen in the last quarter in 2017.
Private property resale prices have rebounded by about 10% from around September last year – HDB resale prices continue to fall.
The objective for HDB is to ensure affordability, not profitable, that’s the reason even the Singapore’s annual GDP growth of 3.6% in 2017 surpassed initial estimates cause the en-bloc fever last year and early this year, but it doesn’t affect in HDB prices.
In addition, such a price decline of HDB can also be attributed to the steady supply of the new HDB Build-to-Order flats in 2017 and 2018. HDB will offer about 3,900 BTO flats in Sengkang, Tampines, Toa Payoh and Yishun in the May 2018 BTO exercise. Although the HDB resale price index is still falling, the government does not plan to reduce the supply of BTO flats for 2018 as it’s government policy to ensure affordability.
Other article comparing price or HDB vs Condominium:
✅ CASH OUT
HDB flat does not allow to do refinancing. Meaning that the CPF and cash that paid for the HDB only can get it back until you sell the unit.
Imagine this scenario, if you urgently need a big amount of cash for a medical expenses or other investment, but your HDB still with tenancy so you can’t sell, what will happen? Even you manage to settle the tenancy privately with tenants but looking for buyers will take months and the selling process will takes another 3 months, that might not helpful when you are in a great need of money.
Even if you are lucky to sell it in time, you will have to give up your HDB flat and wasted the ABSD you paid previously when you brought a private property.
On the other hand, if you are owing a private property instead of HDB flat then you can simply do a refinancing to cash out some money without considering selling the apartment. For example, some buyers will use up all the money in their CPF OA to purchase a private property, after 2 or 3 years their bank loan lock-in period expired, at the same time valuation of the property has been increased.
In this case, they can cash out by doing refinancing. You can say that’s a way where you can cash out your CPF money and use it for other investment.