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You are thinking along the right lines in terms of lease decay, as your hougang HDB is at the tipping point right now where its value might start dropping rapidly.

However, the specific move you are describing to buy a freehold 1 bedder under your name while paying ABSD is not an optimal choice. There are numerous other options I can help you explore that would make more financial sense, whether your priority is capital appreciation, passive income, or asset preservation.

I'm a Harvard graduated real estate agent with a degree in economics, and have supported clients on more than $1 billion in transactions. I can help with sourcing, viewing, own-stay & investment analysis, market comparatives, timeline planning, safe entry pricing and more.

I can help show you the various options and work out all the projected the numbers as well as loan/ financing options. I do this all for FREE, all you need to do is reach out below :)

Kay Cloud
The Harvard Educated Agent
Propnex Realty Pte Ltd
cloud@propnex.com
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Whatsapp -> https://wa.me/6585674585 Read More

Good day to you.

Your main concern pertains to the decaying lease of your Hougang HDB unit, while your secondary concern is regarding loan eligibility at the age of 53.
To address these issues, it would be beneficial to gather more information about your financial situation.
I would recommend selling the Hougang HDB unit to unlock the funds that are currently tied up.
After that, I would suggest buying a private condominium in your name, with a smaller loan, which would enhance your cash liquidity, eliminate the need to pay Additional Buyer’s Stamp Duty (ABSD), and reduce property tax expenses.
Let’s meet and take the next steps together.

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Hi,

I would be most glad to assist you further and pls feel free to let me know if you need any assistance. Have a good day ahead. By the way, for some at this stage, they may not want to incur paying loan again.

Regards
Aaron Chong
 9730 8455 
aaronchong2774@yahoo.com.sg Read More

Hi Fred,

I recall your post in April, just wondering how is your discussion coming along? I suppose there are 2 triggers here that are egging you on to take action, one being the lease decay of the HDB, the other I guess being the turning age 55 milestone, which may restrict some of the CPF usage for any next property.

Just wondering if you have already set aside the Full Retirement Sum for yourself? I recall your 4-room HDB is at lorong ah soo area, which based on the recent comparable estimates can fetch approx 600k +/- depending on unit condition.

I think the lease decay + ageing building effects may slow down the price increase here, but it is somewhat mitigated by the new upcoming Defu station in the cross-island line plus the potential unveiling of redevelopments of the vacant paya lebar airbase with new developments from 2030. I think the price of your HDB and its corresponding rentals will generally remain stable for the next 2 years, but it may become harder to sell as it nears its 50 year old mark, as buyers become concerned with the age of building plus the restrictions on cpf / loan usage for older leasehold property. Furthermore VERS details for older HDB will get clarity soon, you might want to see how this policy development transpires. But I think the fact that the government is looking into it early is a good sign, that there will be some form of reasonable residual value outcome. I feel you can still continue to maintain status quo for the next 2 years, unless there is a strong need for a location change from your existing property location, or your CPF usage at 55 will be significantly restricted.

Finally, I feel paying the 20% ABSD probably is not the best choice since you are at the age phase where you should protect capital as much as possible.

Perhaps we can discuss further offline.

Hope the above clarifies. I am well-versed with HDB and private property transactions, having helped more than 100 homeowners transit smoothly with their housing plans. Please reach out to me at 97432395  for a more in-depth discussion :)

May I have more info on your requirements so as to make better recommendations? Thanks and looking forward to chat more

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1. Your key worry is the lease decay of your Hougang HDB, followed by loan eligibility at age 53.
2. To move forward, we should first understand your overall financial position in more detail.
3. Selling the Hougang HDB will release tied-up funds and give you flexibility.
4. A private condo under your name, supported by a smaller loan, could improve cash flow, avoid ABSD, and lower property tax.
5. Let’s connect soon and map out the right path together.

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I do not agree that HDB's value will drop rapidly upon decay of lease. There will be some impact but I do not think it will be a cause for alarm if you plan out proper.

You are in a fortunate situation where you have 2nd property that puts you in a good state to plan for your retirement. Even if you sell off your existing HDB, it does not mean that you need to reinvest back into a property.

To find out about loan matters, we can assist to do an estimate but it is best to speak to a financial professional to work out on your loan estimates and eligibility, given that both of you both of you are age 53, with a relatively short loan tenure. This will allow you to plan out how you should go about with the finances.

The rental income from the Hougang HDB is giving you a positive cashflow currently, thus if you sell and look into a purchase of another property with loan, the situation will change in that you will likely be required to finance the purchase and rental income from that property will go into the financing. How will that affect your lifestyle in this case?

——

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Hi Fred,

Your concern is definitely valid as once your HDB becomes older, it will be more challenging to sell as the pool of potential buyers become smaller. However the yield is still pretty decent and it can provide you with a good and stable stream of passive income.

Getting another 1 bedroom unit and paying the ABSD is not a good idea because you will need approximately 4.2 years just to recover the ABSD amount. Your entry price together with the ABSD will also be significantly higher and this will affect the exit price in the future.

In my opinion, the better option is to either stay put as it is or sell your HBD and use the funds to purchase a 1 or 2 bedroom condo and rent it out. The condo will be able to provide you a higher rental and a better upside potential for appreciation in the future.

Please feel free to contact me so that I can gather more information to provide a more in depth analysis for you.

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Selling our house was a pretty stressful ordeal, as we have already committed to buying our new home and hence have a timeline to meet. Losing a substantial deposit and worse still, not getting our dream h Read More

I would be glad to assist you.
Feel free to contact me at wa.me/6597100155
Hope to hear from you soon.
Pei Mobile: (65) 9 7 1 0 0 1 5 5.
Email: peicheng.tan@propnex.com
Associate Group Director
Propnex Realty Pte Ltd Read More

Scenario
• You’re 53, looking at a freehold 1-bedder condo under your name: S$800K.
• ABSD (20%): S$160K.
• Remaining purchase amount: S$640K, potentially financed via an 80% loan = S$640K.
• Current properties: fully paid 7-year-old 1-bedder condo (wife’s name) + 40-year-old 4-room HDB being rented out.

⸻

1️⃣ Loan Tenure Eligibility
• For private property in Singapore, the maximum loan tenure is 30 years or until age 65, whichever is shorter.
• At 53, this means the maximum tenure is 12 years (65 – 53).
• Banks may be stricter if you are older, sometimes offering slightly shorter tenures.

⸻

2️⃣ Monthly Repayment & Income Required
• Approximate monthly repayment (assuming 2.8% interest rate, 12-year tenure, 80% loan of S$640K) is around S$5,900–6,000/month.
• Using the 50% mortgage servicing ratio (MSR) guideline, you would need an income of roughly S$12,000/month to comfortably service the loan.

Note: If your HDB rental income continues, it could help offset some cash outlay, but banks usually consider only 70–80% of rental income for MSR.

⸻

3️⃣ Considerations
• ABSD cash outlay: S$160K upfront.
• Short loan tenure: Monthly repayments are relatively high due to age constraints.
• Age & Retirement Planning: With a 12-year loan, you’d be 65 at loan end, which may affect retirement cash flow.
• Alternative: Stay put in your current condo and continue renting HDB. Could free you from high upfront ABSD and large monthly repayments.

⸻ Read More