3 reasons why Sumang Walk is a property hotspot - 99.co

MARCH 2, 2018

Sunset bridge over Punggol waterway

The Sumang Walk Executive Condominium (EC) land plot has got a lot of attention lately. Besides attracting 17 bidders and one of the highest prices in the market, it’s already got attention from home buyers. Those who are looking to buy in a few years will be watching the site closely, even if it seems the resulting development could be pricey.

What’s the buzz surrounding the Sumang Walk EC site?

The EC site at Sumang Walk (in Punggol) attracted 17 bids among developers. The top bid was $509.37 million, and came from a joint venture between CDL Constellation (a subsidiary of City Developments) and TID Residential (owned by TID Pte. Ltd.)

This comes to about $583 per square foot, which is the highest recorded land price to date (for an EC unit). Based on the high bid, the estimated launch price for the upcoming development is estimated at between$1,100 to $1,150 per square foot. If that’s correct, it would set another record – this could be the most expensive EC in the Punggol area to date. Assuming an average unit size of 1,000 square feet, we might be looking at million-dollar condo units in the Punggol area – an area generally known for more affordable housing.

The Sumang Walk EC site measures 27,056.4 square metres, and is on a 99-year leasehold. The latest news from the winning developers is that they’re considering a project of 13 blocks, of between 10 to 17 storeys, with a total of 820 units.  

What makes this site so desirable?

Three factors work to raise the price of the Sumang Walk EC site so high. These are:

– It was the only available EC site for developers right now

– Confidence in ECs and recovery in the residential market

– Development of the Punggol Digital District

1. It was the only available EC site for developers right now

To be clear, there are three more EC sites available for land sales in 1H2018, but Sumang Walk is the only EC that will be launched in 2019. The other sites will only be launched in 2020.

In addition, JLL National Director, Mr. Ong Teck Hui, mentioned in a Business Times report that “The absence of EC land tender for one-and-a-half years, a severely undersupplied market with a paltry unsold stock of less than 1,000 EC units (including the upcoming 628-unit Rivercove Residences along Anchorvale Lane in Sengkang) and a rising private residential market are contributors to the bullish outlook for the EC market among bidders.”

2. Confidence in ECs and recovery in the residential market

The residential property market seems to be turning around this year. Home prices were up one per cent in 2017, after declining 3.1 per cent in 2016. We also saw a rise in sales volumes for private homes, at 23,113 transactions between January and November 2017. The beats the total sales for the entire year of 2016, which were just 16,378.

At the same time, developers have always been bullish on the sales of ECs. In just the first seven months of 2016, for example, 2,697 EC units were sold by developers. This was more than the 2,550 EC units sold in the entirety of 2015.

In 2016, ECs like Wandervale sold half of its 534 units on the opening weekend, whilst Treasure Crest sold 72 per cent of its 504 units on the opening weekend.

ECs are popular because, despite being full suite condos that are fully privatised after 10 years, buyers can still get CPF grants when purchasing them. They are, in effect, a form of “government subsidised private housing”.

As the Sumang Walk EC will be the only housing type of its kind to launch in 2019, demand is sure to be high.

3. Development of the Punggol Digital District

Punggol itself is picking up steam, as a desirable location. Once known for affordable housing and relative seclusion, it’s now undergoing the same kind of transformation we once saw in Jurong West.

The government has plans to expand Punggol Town Centre toward the waterfront, and develop it as a mixed-use district (commercial, residential, and business park). The new Singapore Institute of Technology (SIT) campus will be located here, and the area will be developed into a “digital district” for tech innovation.

In addition, the area will have a new hawker centre, revamped community club, and a new childcare centre.

The Sumang Walk EC may be the beginning of a new era for Punggol, which may no longer be seen as just the place for affordable housing in the years to come.

RYAN ONG

Source: 99.co (2 Mar 2018)

How the Sumang Walk EC could affect broader property prices - 99.co

The Sumang Walk Executive Condominium (EC) site has had everyone’s attention the past few weeks. Having attracted a record $509.37 million bid from developers, it’s likely that the eventual condo will be one of the most expensive in the area. The estimated breakeven price, when the developers start selling, will very likely be above $1,000 per square foot. This could make it the first million dollar EC site in the area. That’s already affecting the way buyers perceive some other properties

1. Soon-to-be launched Rivercove Residences looks good by comparison

As some Internet conversations are showing, the prospect of a million dollar EC has caused some buyers to roll their eyes. Rivercove Residences (launching 1 April 2018) is often singled out as an alternative: Why buy the Sumang Walk EC for a minimum of $1,000 per square foot, the argument goes, when Rivercove Residences is likely to be more attractively priced?

The fact is, just about every other EC starts looking like good value for money, when you mention Sumang Walk EC. This is especially the case for older, appreciated ECs – some of these have appreciated to around $1,100 per square foot by now, with the added advantage that they are closer to privatisation (ECs are fully privatised after the 10th year).

2. We might be turning back the clock

Remember 2012? At the time, EC prices got so high that then Minister of National Development, Mr. Khaw Boon Wan, stepped in to send a sharp message to developers.

At the time, an EC penthouse at Heron Bay sold for $1.77 million; and there was a presidential EC penthouse in Tampines that sold for $2.05 million (it was bought by a “typical middle class family”. Really, that’s what they told the newspaper).

At any rate, this caused Mr. Khaw Boon Wan to warn developers “not to forget the fundamental premise of an executive condominium”, while they were busy trying to see just how much buyers would pay.

Then, as now, ECs are an exciting concept – buyers can still get CPF grants, so it’s often seen as “subsidised private housing”. During the upswing in the property market (which would peak in 2013), it was clear buyers would pay crazy sums, and developers were happy to accommodate that.

With Singapore’s property market recovering, and the income ceiling on ECs raised to $14,000, we may see a repeat event.

3. A matter of time before older condos (whether they’re ECs or not) also see some price hikes

If ECs are going to start reaching the million dollar mark, a large segment of buyers are going to decide, what the heck, they may as well buy full-fledged condos that are available for that price. As such, some suburban condos in the $1 million to $1.2 million range may be seen as viable alternatives (see point 1: the price is about the same, and these condos are already private).

This won’t last forever. Over time, the prices of those full-fledged condos are going to creep up. A lot of it will also be due to sellers’ mindsets (i.e. how can my private condo only be worth as much, or less, than your EC?)

4. We will have to start reassessing the notion that ECs are always a good investment

If you’re buying an EC for a home, don’t worry about this bit. But if you’re thinking of your EC as an investment, it may be time to question the underlying assumptions.

Yes, an EC is theoretically a great deal, as it’s private property that comes with CPF grants. But given how inflated the prices are becoming, are you certain there’s still room for appreciation? There’s certainly more risk involved, given the bigger cash outlay* and increasingly steep prices. If you have a million or more to spend, a full-fledged condo may be a better investment.

(You can find great condos prices at just $1 million to $1.2 million, using the price filter on 99.co).

*There are no HDB loans available for ECs. You must use a private bank loan, which can only finance up to 80 per cent of the property price or value (whichever is lower).

If you found this article attractive, 99.co recommends 3 reasons why Sumang Walk is a property hotspot and compare and contrast: BTO vs EC vs private condo.

RYAN ONG

Source: 99.co (15 Mar 2018)

How Foreigners Can Buy Condos in Singapore - Hoi Hup Realty

By rivercove | Bussines, Construction, Executive Condominium, Rivercove Residences EC

0 0

There are many condos in Singapore for sale. It depends on your preferred location. Most expats like to buy in the core central and eastern part of Singapore.

The procedures are as such for the new condo:

1. Get a bank to do an initial In-Principal Approval. This will determine your loan amount and budget. This step is not required if you do not need a bank loan.

2. Get an agent to help you source your property. For new launches, the developer will pay the agent commission.

3. Once you found the property, you will need to pay 5% initial down payment by cheque or cashier order to the developer or for a resale condo, 1% to exchange for Options to Purchase.

4. You would then need to go to a lawyer to sign the S&P agreement or exercise the OTP.

5. You will need to pay the stamp duty of 3%-5400 (mathematical formula) within 14 days of S&P. There will be additional buyer stamp duty of 10% for foreigners.

6. For the new condo, progressive payment to the developer will start depending on the stage of the projects. This will be certified by a professional engineer and letter will be sent to your lawyer and lawyer will coordinate with the bank for disbursement.

If this is your 1st property in Singapore, you are entitled to max 80% bank loan and cash payment is 20%. For 2nd property and above, you are entitled to max 60% loan and cash payment is 40%.

For the foreigner, the bank will do an income assessment and the bank loan could be lower.

Please also note that there will be a seller stamp duty of 16%, 12%, 8%, 4% if you sold your property within 1, 2, 3, 4years respectively.

Rivercove Residences Executive Condominium (EC) is an ideal choice for anyone who wants an affordable quality home, new EC in Sengkang, Singapore EC, Sengkang EC, Anchorvale EC, and Showflat. Register now for more details.

Source: Hoi Hup Realty (10 Mar 2018)

从组屋提升到公寓，是不少人的梦想。这方面的财务能力，要怎么衡量？- Channel 8 News

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Source: Channel 8 News Published on Oct 25, 2017

EC供应够不够？- Channel 8 News

Source: Channel 8 News Published on Aug 9, 2017

A Day in Punggol - HDB

Source: HDB

Five gems of Punggol - Channel NewsAsia

Source: Channel NewsAsia

Your Own Guide To Investing In Property In Singapore - PropertyGuru

Posted on Nov 14, 2016

Property investment is a great way to make a lot of money – if you know what you’re doing. Otherwise, it can be a very risky market, one fraught with legalities and nuances. But with the right guide and a good idea of the marketplace, you can well be on your way to building a proper portfolio. So let’s get you started!

The Basics

First of all, you have to understand the basics surrounding pricing – your entry price point is determined by the basic cost of purchasing a residence. On average, prices per square metre lie at SG$15,251, with a rental yield of 2.83 percent. Your rental yield is your rate of return on the cost of the home. To put it simply, it is how much more you’re making on an annual basis versus your initial investment.

This is important, because the tenant’s contribution constitutes a major part of your investment returns, the other being the sale of the residence at a higher value.

Now, bear in mind that while the average square metre price gives you an idea of what costs you’re looking at, that doesn’t mean that your first residence of choice will cost this much, or get you this much of a profit.

How Prices Change

Next, it’s important to know how value usually changes in Singapore. Current metrics place the average investment price change at -3.67 percent in a single year. That may sound bad, but looking into the mid-term future, five years from your purchase, your value typically increases by 1.72 percent. Wait another five years, and in the right conditions your home’s value could increase as much as 67.57 percent -- a perfect place to consider a sale.

If getting a sale is difficult in developing market conditions, especially as the URA residential price index has shown a steady decline in prices since 2013, then you’re still in luck. Singapore is very much pro-landlord in its laws, although there are no specifics, as your contract determines the tenant-landlord relationship.

How Ownership Works in Singapore

Your powers as a landlord aside, ownership here is manifold in its meaning and definitions. Freehold means that you, as the owner, have permanent rights to the residence. A leasehold, on the other hand, makes you owner for the period of the lease. It’s important to know the difference before you start making money, especially if you’re thinking of buying for inheritance purposes.

On Taxes

As far as tax rates go, Singapore is an attractive country for the financial investments from foreign entities and individuals. For those making their money through the country itself – like landlords – monthly incomes between US$1500 and US$12,000 have a flat rate of 15.1 percent.

The progressive tax on the annual value of your residence depends on whether you’re living in it or not. Owner-occupied residences get an additional concessional rate of 4 percent—and all properties cost you an extra 10 percent in taxes if you’re non-Singaporean. Then, it changes as per the increase in value. The exemptions are rental properties, commercial properties and industrial properties, which each get a flat rate of 10 percent.

In order to prevent tax exemption and money laundering, round tripping to inflate your portfolio, while not illegal, can cost you and your buyer (or seller) a significant amount in taxes – up to 37.45 percent for some transactions. This way, property investments are kept legitimate.

Location, Location, Location

The final and most important question is: where do you actually invest? Singapore isn’t a large country, but the value of property varies according to location. The primary form of housing here is the HDB apartment – a state-sponsored program for subsidized housing, utilized by most Singaporeans. The most expensive property sales are usually in Bukit Panjang.

However, when it comes to rental costs, properties in Bukit Panjang are outclassed by the costs of renting housing in most of the market’s biggest examples, including Choa Chu Kang, Tampines, Sengkang, Jurong West, and the most expensive rental region: Bedok.

Typically, the ideal property investment relies on the individual circumstances, and your goals. Do you want to flip the property after five years or keep it as a rental property, and eventually pass it on to the next generation?

[click for full version]

Source: PropertyGuru

Getting your money's worth from property investment - PropertyGuru

Property Investment with Immediate Returns

Property investment with immediate rental returns is a preferred option for many investors in today’s environment.  The reasons commonly cited are a fixed deposit saving rate at 0.5% per annum or less, a mortgage rate at a historical low of around 1% to 1.5% per annum and an inflation rate at over 3%. As property is a physical asset, it is generally viewed as a lower risk option than other investment products.

What is the current return on investment in a residential property?

Your “Return on Investment (ROI)”in a property (or the Yield) is usually expressed as a percentage of the cost of the investment property. There are also nett and gross yields:

• a nett yield is the return shown as a percentage after costs such as property tax, maintenance fees and other charges
• a gross yield is simply the percentage derived from dividing the income by the cost of the property

You can enjoy immediate returns when you purchase a completed project with tenancy. With careful selection, you can own a property with positive cash flow.  An example is Rafflesia at Bishan, developed by Far East Organization. The following is a simple calculation of ROI for a high floor unit, #20-09 at the Rafflesia condo.  As shown below, you will get an estimated nett return of 3.17% per annum.

Property Price ( PP )	$1,570,000
Cash 10% ( A )	$157,000
CPF / Cash 30% ( B )	$471,000
Stamp Duty ( SD )	$41,700
Rental income p.a ( R )	$61,800
Loan installment p.a ( L )	$36,204
based on 60% loan, 0.97% interest rate, 30 years
Maintenance fee p.a ( M )	$4,464
Property Tax ( PT )	$6,180
Nett cash income p.a ( R - L - M - PT )	$14,952
Nett rental yield ( < R - M - PT > / < PP + SD > ) x 100%	3.17%

You can also evaluate this investment by looking at the returns on the cash (including CPF) you use for this property. If we assume that you borrow 60% of the purchase price and use 40% cash, your estimated return on cash is 7.64%. Please see calculation below.

Nett cash return yield
( < R - M - PT > / < A + B + SD > ) x 100%	7.64%

In summary, the benefits of investing in a completed project with rental yield are:

• Immediate cash income
• Good investment return
• Hedge against inflation
• Flexibility to switch to own use when needed
• Tangible asset

Source: PropertyGuru

The Most Expensive and the Cheapest Residences in Singapore by Neighborhood – March 2018 - The New Savvy

By

 ValuePenguin

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April 13, 2018

In 2018, Singapore was ranked as the most important property market in ASEAN by Morgan Stanley’s research. Given this, it is not surprising that Singapore is also home to some of the most expensive properties in the world. But just how nice and expensive can home in Singapore be?

Also, how do they compare to the cheapest residences in their neighbourhoods? In classic ValuePenguin fashion, we’ve collected the data on the most expensive and the cheapest homes currently listed in Singapore by neighbourhood as of March 2018. If you are looking to purchase a home in Singapore, our study below might be of value.

Key Findings

Overall, we found that the most expensive homes in each of the 28 neighborhoods generally ranged from S$1.4 million to S$110 million, a wider range than what we observed in 2017(S$4.4mn to S$106mn). These are ultra-fancy residences that tend to be either landed properties or penthouses of fancy new buildings.

In contrast, the cheapest residences typically cost around S$200,000 to S$1.2mn. In terms of price per square foot, expensive homes cost anywhere between S$700/sqft and S$20,000/sqft, with a median of S$1,414/sqft. This was significantly higher than S$350/sqft to S$2,210/sqft we observed for the cheapest properties, whose median was S$477/sqft.

Whether you are buying a property that costs S$20mn or one that costs $300,000, you are going to need to take out a loan from a bank to finance your purchase. To find the best deal, you could simply use our study to compare the best home loan rates available in Singapore.

Where Most Expensive vs Cheapest Properties Are

On PropertyGuru, the most expensive property currently on sale in Singapore is actually a piece of land in Tanglin/Holland/Bukit Timah area, with listing price of S$11mn and area of 52,000 sqft. In terms of an actual residential unit, the runner up was located at Wallich Residence in Chinatown/Tanjong Pagar area, with a price tag of S$108mn and a floor size of 21,108 sqft. As you can see, it’s a gigantic apartment in a newly built, high-end condo building.

Photo of the Wallich Residence Listing. Source: PropertyGuru

In contrast, two of the cheapest properties were located in Harbourfront/Telok Blangah and Admiralty/Woodlands areas. They were both relatively old and modest HDB flats with price per sqft of around S$500.

Photo of the Woodlands Listing’s Floor Plan. Source: PropertyGuru

The Highest & Lowest Cost Per Square Foot

In terms of price per square foot, we found a property located in Balestier/Toa Payoh area with a listed pricing of S$22 million. This unit in Kallang Riverside had a listed land size of 1,033 square foot, resulting in S$21,496 per square foot of unit cost. In contrast, the lowest cost per square foot we found was just S$350, located in Dairy Farm/Bukit Panjang/Choa Chu Kang area. Of course, given the difference in prices, their qualities were vastly different, with one being one of the fanciest properties in the world and the other being a very small, aged and modest HDB flat.

Comparison to 2017

We ran a similar study in February of 2017, where we collected prices for the most expensive residences listed in Singapore. In general, there were very little change in which neighborhoods had the most expensive and the most affordable properties. For instance, 4 of the top 5 neighborhoods that had the most expensive properties on sale in 2017 still ranked as top 5 in 2018. Similarly, 3 of the bottom 5 in 2017 were still ranked as bottom 5 in 2018. We observed the biggest rise in Alexandra/Commonwealth area, who ranked #3 in 2018 compared to ranking #23 in 2017. Conversely, we observed the biggest drop in Seletar/Yio Chu Kang area, which ranked #19 in 2018 compared to #10 in 2017.

Methodology

To look for the priciest homes in Singapore, we searched on PropertyGuru for the most expensive and the most affordable homes by neighborhood. We collected data for all 28 districts, and rank ordered properties by 1) total price and 2) by price per square foot. In order to calculate each property’s price per square foot, we divided the total price by either total land size or total property size, whichever was bigger. This was done in order to measure how much surface area an individual ends up owning by purchasing the property. In case of private residences with front and backyards, this would be the total land size. For town homes or villas with multiple floors, on the other hand, this would be the total property size.

 Source: The New Savvy

Further home price spikes may spell risk of renewed cooling measures - SRX

Property News11 Apr 2018

Further home price spikes may spell risk of renewed cooling measures

Several more quarters of private home price increases of the magnitude seen in the first quarter could leave the property market here staring at the possibility of fresh cooling measures, industry players say.



While the immediate risk of that is low, the surprise 3.1 per cent quarter-on-quarter (q-o-q) jump in Q1 private home prices has led some in property circles to contemplate how policymakers would respond if the uptrend of similar or even bigger price spikes continues in the next two quarters.

"Looking historically, I think the authorities will start to do something when they see double-digit growth in the price index," said Dr Lee Nai Jia, research head at Edmund Tie & Company. This suggests that the authorities will wait until the Urban Redevelopment Authority overall price index for private homes rises another 5.1 per cent from the current level.

The much higher-than-expected flash estimate for the URA's Q1 2018 overall private home price index came after milder q-o-q rises of 0.8 per cent in the fourth quarter of 2017 and 0.7 per cent in Q3 2017 - following a bottoming out of the index in Q2 last year.

Most analysts believe that the Q1 flash estimate is not a blip but more likely an indication of stronger price upside this year fuelled by the bullish land prices paid by developers in the past 15 months or so. Based on the Q1 flash estimate, the URA overall private home price index is up 4.7 per cent from the recent trough in Q2 2017.

If similar q-o-q hikes in the index continue, the 11.6 per cent decline in the index over nearly four years (between Q4 2013 and Q2 2017) would be wiped out by the end of this year.

Alice Tan, head of consultancy and research at Knight Frank Singapore, reckons that some form of government intervention is likely should the magnitude of the q-o-q increase in URA's overall private home price index hit 3 to 5 per cent for another couple of quarters, especially the subindex for non-landed private home prices in the suburbs.

JLL national director Ong Teck Hui said: "If the index were to continue escalating at a higher pace in the next few quarters, the risk of intervention would be higher."

Responding to BT, a spokesman for the Ministry of National Development referred to a speech by National Development Minister Lawrence Wong last November, when he said: "We will continue to stay vigilant and monitor the market closely. We recognise that there will always be ups and downs in the property market. As far as possible, we will make use of the various levers we have to achieve a more stable and sustainable property market."

Mr Wong, who is also Second Minister for Finance, had delivered that speech at the Real Estate Developers' Association of Singapore's 58th anniversary dinner.

Besides monitoring the price index, analysts say other potential red flags the authorities would be on the lookout for include income growth lagging behind the escalation in home price, and a significant increase in the proportion of foreign buying.

"The authorities will also be watching banks' exposure to real estate lending, be it for land acquisition or housing mortgages, plus the proportion of household wealth being locked in real estate," said Savills Singapore research and consultancy head Alan Cheong.

Dr Lee said that studying vacancy trends, as well as comparing the number of private homes sold against the growth in the number of Singaporean households, would also provide a gauge as to whether demand for private homes is being driven more by owner occupation or investment/speculation.

Intervening when the time is right would have beneficial impact all-round.

"From the government standpoint, the banking system would be vulnerable if a property bubble is formed," said Dr Lee of Edmund Tie & Co.

Savills's Mr Cheong, who noted that the case for intervention is strong if the rate of price increase is excessive, said: "Contrary to the conventional belief of some market players, weak-to-mild-impact interventions are actually good for the property market if these help tone down irrational exuberance and in doing so prolong the 'up phase' of the price cycle for the benefit of all stakeholders."

Ms Tan of Knight Frank said: "With the government's consistent objective of ensuring a stable and sustainable property market, interventions are necessary to ensure home prices grow in tandem with income growth, which is crucial in ensuring private homes remain accessible to aspiring home upgraders."

In line with the views of most analysts, CIMB Private Banking economist Song Seng Wun thinks it is premature for the government to intervene at this stage. He said: "Unless we see the bullish sentiment in the private housing market spill over to the HDB resale side, the government will probably continue to take a wait-and-see approach."

Observers also point to an expected moderation in private home prices arising from a stronger supply of project launches next year, due to the collective sales boom. "So any policy action should take that into account," argues JLL's Mr Ong.

Dr Lee said that rolling out cooling measures now may further delay a recovery in the construction sector, which has a major bearing on Singapore's economy.

"Things are expected to improve for the construction industry in the second half of this year due to the redevelopment of sites sold through en bloc sales.

"However, if we begin a new round of cooling measures at this juncture, developers would try and phase out launches and slow down developing their sites. To reduce an adverse impact on the construction sector, it would be better if any possible cooling measures take effect next year at the earliest," Dr Lee added.

Savills's Mr Cheong highlights another potential negative fallout from a premature intervention. "The private housing market is only beginning to find its footing after a prolonged slump. If the intervention causes transaction volumes to collapse, it would then increase the risk to financial institutions that have belted out loans to developers who have been stocking up on land either from the Government Land Sales Programme or through collective sales."

Just what sort of cooling measures could the authorities unleash?

Dr Lee said that the the first step would be to reverse the changes to the seller's stamp duty (SSD) in March last year. Back then, the authorities reduced the holding period for residential properties - after which the SSD does not apply - from four years to three years and also cut the SSD rates for each tier by 4 percentage points.

Knight Frank's Ms Tan also expects the authorities to potentially reduce the loan-to-value (LTV) limits for the second and subsequent housing loans.

"This would be more palatable compared to, say, raising the 7 per cent additional buyer's stamp duty (ABSD) rate on Singaporeans buying their second residential property."

Singaporeans are exempted from ABSD on their first residential property purchase, and pay 10 per cent ABSD on their third and subsequent residential property purchases.

Source: SRX

When You Can Legally Start Making Money Out of Your HDB Flat and How - MONEYSMART

For many homebuyers in Singapore, purchasing an HDB flat isn’t just about owning a dream home. It’s also about making a good investment, one that will hopefully be able to give you a decent rental income or sale profits in future.

But HDB regulations are designed to ensure Singaporeans buy HDB flats first and foremost as homes rather than investments. These rules impose restrictions on how you can earn money from your flat in the first few years of ownership.

What is the Minimum Occupation Period (MOP)?

From the day you pick your keys, you are subject to a Minimum Occupation Period which usually lasts five years. Before the Minimum Occupation Period is up, you’ll be forbidden to do the following:

• Sell your flat on the open market
• Rent out your whole flat
• Invest in private property, whether in Singapore or overseas

While the MOP is generally 5 years, there are some exceptions. This table helps you to figure out how long your MOP will be.

Purchase Mode	Minimum Occupation Period
Flat purchased directly from HDB / BTO flat	5 years
DBSS flat purchased from developer	5 years
Flat purchased under Selected En  bloc Redevelopment Scheme (SERS)	Either 7 years from date of flat selection, or 5 years from date of occupation
Flat purchased under SERS with Portable SERS Rehousing Benefits	5 years
Resale flat purchased on open market with CPF Housing Grant	5 years
1-room resale flat purchased on open market without CPF Housing Grant	No MOP
2-room or larger resale flat purchased from open market without CPF Housing Grant on or after 30 Aug 2010	5 years

Renting your rooms before your MOP is up

Before the MOP is up, you are required to live in it. That means you may not rent out the entire flat.

You ARE, however, allowed to rent out rooms in your flat, provided you continue to live there. Effectively, that means you need to occupy at least one bedroom in the flat.

But be careful not to rent out your rooms for periods of less than 6 months. HDB rental must be of a duration of at least 6 months, otherwise you risk having your flat confiscated (!) for breaking the rules. And don’t even think of putting your rooms on Airbnb, as the consequences are graver than for private property owners who flout the rules.

Also note that if HDB officers decide to inspect your flat, you must be able to prove you’re living there. So at all times, make sure there is a room you can show is your own.

Start renting out your entire flat when the MOP ends

Once the MOP is over, you can start putting up your entire HDB flat for rent. This is an option if you’re fine with moving back in with your parents or in-laws, or if you have another property you plan to move into.

Note that renting out your entire flat to one tenant will not necessarily earn you more than renting out rooms separately if you have a fairly large flat, although it will certainly be more convenient since you will only have to deal with one rental contract.

For instance, if you have a 4-room or larger flat and are renting out at least 3 of the rooms separately, you could well have earned the same amount or more than you would renting out the entire flat.

Also note that HDB subletting is forbidden for tenants. That means that unlike private property tenants, your tenants are not allowed to further rent out your flat to others.

Sell your flat on the resale market when the MOP ends

Despite the fact that the property market has been in the doldrums for a while, BTO flat buyers are still likely to see their property values rise significantly in the first five years of occupation.

That’s because BTO flats are not just heavily subsidised through grants but also much cheaper at the time of purchase due to the waiting time when they’re being built.

So if you’re hoping to make some money by selling your flat, start monitoring resale prices in your area once the MOP ends.

Joanne Poh

April 9, 2018

Source: MONEYSMART