In Singapore, the land is scarce, hence affording as many properties will be a good option for owners. Therefore, can we buy both HDB and private properties, and are they of any value to us?
The answer is actually a yes and no. Depending on the situation that you are in, there are various important factors that will affect the buyer. Therefore, information is the key to buying properties and transparency is needed in this market as well.
why you can buy an HDB after purchasing private property?
There are scenarios whereby buyers can buy an HDB or flats. This is provided the buyer to sell off their private property first. However, take note that there might be sunk costs for selling and purchasing of properties. So, therefore, you have to sell your private property before purchasing a flat. However, there are 2 types of flats, resales and BTO. For resale HDB, you can go ahead and purchase with a bank loan upon the selling of your private property. Whereas for BTO or if the buyer is taking up an HDB loan, he has to wait out for 30 months. This translates to more costs. The buyer would have to either rent a place to sit out the 30months. Therefore, make sure you do the financial costings right before you make the jump.
why cant you buy as a second property?
HDB is public housing that is meant as affordable housing for Singaporeans. Therefore, it is not for investment or speculation purposes. Buyers cannot purchase a flat after owning private property. However, if the situation reverses, you already owned an HDB, yes, you can purchase private properties. This is provided you fulfill the minimum criteria that are being set by the government. Owners need to stay in the HDB for a minimum occupation period of 5years (MOP period). However, owners will incur ABSD upon purchasing private properties.
So yes from this article, it seems like a good option to buy an HDB first and thereafter upgrade to a condo. However, if you purchase a BTO, you will need to factor in construction and MOP time. This will set you back a good 6-8years. You might need to weigh the pros and cons of choosing between an HDB or a private property as your first property.