Investing in property is a great way to build your path to financial flexibility. Your first home WILL GET YOU on the property ladder if you can get hold of a good capital gain.
As a first time homeowner it is important to understand what triggers the capital gain. A Brand New BTO Flat, New Launch Condo Or Resale counterparts? If affordability allows, would you have chosen an EC over a Private Property? If all these questions flushed through your mind, you’re not alone.
As a rule of thumb, homebuyers will consider the following factors:
● The desired area of the home (Mature & Non-Mature estates)
● The type of property (HDB, Executive Condo)
● Neighbouring schools for children
There is always a high demand for projects built in mature estates but do you realise that future development and transformation will escalate the capital gain of a property. A good example explained here:
Year 2010 – 2020:
● Non-mature estate (Punggol) 5-room was priced at $250K in 2010. Today, it was sold at a price tag of $668K! Which is more than $400K gain on top of the proceeds.
● Mature estate (Ang Mo Kio) 5-room was priced at an average of $400K in 2010 and today, it was sold at a mere price tag of $500k, with a profit of $100K.
The drastic capital gain differences are due to investing in a potential region. The transformation of the estate example; Punggol is a Digital District that drives the capital gain. While convenience has an edge above investment, it is time to weigh the pros & cons today.
If affordability allows, would you stretch a little more for an EC over HDB BTO flat? Perhaps you should be considering.
According to Squarefoot’s analysis of URA data, prices of ECs start appreciating significantly after the five-year MOP to the point that it becomes roughly comparable to the price of a nearby private condominium.
In this scenario, getting an EC does allow a shorter path to get closer to your ideal private condominium if this is your ultimate dream. With a better buffer in terms of capital gain, your selections for your next private property will allow a wider and much more flexible option.
Not sure which is the ideal choice as your first property? Should you be looking for a comfortable flat, EC or a mass market condominium? Get your projected capital gain through our market analysis report before you commit on your big-ticket purchase!
My name is Jen Tan, drop me a private message or give me a call at +65-90662926 & I’ll get back to you shortly. See ya!