3 Simple Steps This Couple Used To Increase Their Wealth
Learn How They Increase Their Wealth By $355,000 or More...
Have you been planning on upgrading your HDB once it has reached it's MOP (Minimum Occupation Period)? But have decided to halt your upgrading plans due to the current Covid-19 situation in Singapore. If yes, this article is for you!
We understand that upgrading to a bigger HDB flat or private residential property can be a big step to take. Especially more so with the virus outbreak and the economy not looking too good as we progress into the second half of 2020. It comes as no surprise that both buyers and sellers like yourself are concerned about where the real estate market will go and how the virus will affect the property market in the months to come.
Let's take a look at how a humble family grew their assets by $355,000 in 7 years, equivalent to saving $4300 every month.
Before we dive in, let's take a look at HDB's current price trends above.
Why did Mr & Mrs S switch from their BTO flat to a condo? Their flat was new and spacious. It was their first BTO flat. They have almost fully paid for their flat. They were very comfortable living there. Why did they take the trouble to move and increase their burden for higher instalment?
3 IMPORTANT REASONS WHY!
1. Understand HDB Resale Price Trend
HDB resale prices have been dropping since Q4 2012. There are many reasons for the decrease in price index, such as cooling measures, ageing HDB flats, supply and demands etc.
Mr & Mrs Sim are one of the lucky owners who have made a profit after selling their MOP flats as they bought direct from HDB (BTO flats) at a subsidised rate. They are able to cash out the profit and look for better opportunities.
However, there are some owners who have made a loss as they bought these flats at a premium and have spent thousands of dollars on renovation. Fast forward 5-10 years later, these owners choose to hold on to their flats knowing that if they sell, their paper loss will become an actual loss.
Despite noticing that the value of their flat is decreasing each year as their flat gets older, they did't do anything or rather have no idea how to do it. They probably don't know when is the right time to exit and choose to continue living in their flat thinking it is the safer option.
2. Protect Their Profit
It is important to protect your hard earned money and PROFIT from your BTO flat by learning the right time to exit the market. But why you ask? Did you know that throughout the lifespan of your HDB flat, the value varies? So, in order to enjoy the highest possible profit from your flat, it is crucial to understand HDB resale price trend, understand which stage you are at now as well as the supply and demand in the market.
Mr & Mrs Sim chose to cash out their profit during the peak period to protect their hard earned money. They planned and looked for better way to grow their profit.
They bought their BTO flat at $380,000 and sold at $525,000. Amounting to a profit of $145,000!
However, if they didn't sell, their profit would have dropped to $90,000 now.
3. Switch To Property That Will Appreciate More
As their BTO already appreciated when MOP and unlikely to appreciate after 10 years. So, Mr & Mrs Sim Switch To Property That Will Appreciate More to help them grow their wealth. They selected the right condo and right unit. They LEVERAGE on LOW INTEREST RATE and their wealth grew by $355,000 in last 7 years. This is equivalent to $4300 saving a month!
Many families are unable to save $1000-$2000 a month. The cost of living and expenses are high especially with growing kids.
Do you want to increase your wealth by $4300 a month?
You too can be like Mr & Mrs Sim by following their path!
Let me show you how!
GROW YOUR WEALTH WISELY!
Avoid Huge Competition
Source: Propnex Research, Data.gov.sg
Huge supply of HDB flats entering the resale market
Did you know that there is an estimated 126,935 units reaching MOP from 2019 to 2023?
In 2020 alone, there is an estimated number of 24,163 HDB flats reaching their MOP. This means that there is an estimated of 24,163 units who might want to sell their flats. Over the next few years, the number of HDB flats reaching MOP increases. With more units reaching MOP, what does it mean for you as a seller? With that many flats in the resale market, your potential buyer will be spoilt for choices.
On average, there were about 23,000 HDB Resale Unit Applications Registered per year, about 15% increase around 3000 units since 2016. This increases the supply of resale flats in the market.
Think about this, would you want to compete with other sellers who will be fulfilling their MOP over the next few years? Or would you want to be ahead of them?
Last year, there were 30,169 HDB flats which have fulfilled their MOP. This was one of the contributing factors causing resale volume to increase by 30% in Q2 2019.
Source: The Straits Times
Avoid Selling Later (Your Flat Grows Older Every Year)
When should you sell your BTO flat? 5th year, within 5-10 years or after 10 years?
Are you aware that there were 33.4% more sales of "newer flats" (5-10 years old) in 2019? Why is that so?
Source: The Straits Times
Would you want to sell your flat when it is at it's peak (highest profit) or when the value of it has dropped?
Let's take a look at HDB transacted prices in a matured estate, Ang Mo Kio versus a young estate, Punggol. Chart below shows prices they were sold at, at different ages of the flat.
In Punggol alone, prices dropped as much as $180,000 in the same block! Selling 6 years later has caused this owner to lose $180,000...
Assuming your flat has reached MOP and you were expecting to profit $200,000 after selling but you chose not to sell right after MOP. You chose to wait. 6 years later you decide to sell but only to realise that you can only sell $180,000 lower than 6 years ago.
Now, after selling, your profit is only $20,000 ($200,000-$180,000) all because you sold 6 years later.
Can you imagine? To majority of us living in a HDB flat, $180,000 is a lot of money!! It's like saving $2,500 ($180,000/ 6yrs) every month. Can you save $2,500 every month for 6 years? This $180,000 could be used for your kid's university tuition fees.
Some owners might be thinking "that won't happen in my area", "We are very comfortable living here, It's our first home. It's so convenient, the MRT is within walking distance, there is a 24-hour supermarket, eateries nearby, shops etc."
Now let's take a look at Sengkang estate Blk 275 cluster.
The area next to Buangkok MRT seems almost perfect, EXCEPT...
The resale price X-Value at it's 5th year is about $580,000. But fast forward at its 10th year, the X-Value drops to $506,000. That is a difference of $74,000!! A pretty substantial drop in value. But why is this so? Is it location? Condition of the unit? Or is it the increase in supply of resale flats in the area?
Ask yourselves this, if you were the buyer, would you prefer a 5 year old flat or a 10 year old flat?
Source: The Straits Times
"The Government is likely to increase the supply of new flats to match the higher overall demand and keep housing prices under control." - The Straits Times
The government will keep HDB housing prices under control because HDB flats are public housing meant to be affordable for the mass. So, you probably only have one chance to make as much profit as you can by selling your BTO at the right time. It is important to plan ahead and understand what options are available to you.
Choose A Property With Higher Growth
Let's take a look at the performance of a HDB flat vs a private property over the last 10 years as a guide (so you can better plan for your next 10 years).
HDB Resale - 10 Year Performance
Private Residential Property - 10 Year Performance
The overall growth performance for HDB Resale is 16.38% or 1.53% (Line 1) per year.
As for private properties, overall growth is at 45.65% or 3.83% (Line 1) per year.
Source: HDB, URA and Agencies
The HDB median price is $405,000 (as of Q4 2019) and growing at 16.38% over the next 10 years. It will be $471,339 or an estimated $66,339 increase in price. Now, lets take the price of private property to be at $1,000,000 and growing at 45.65% over the next 10 years. Calculating to be an estimated $1,456,500, $456,500 more in 10 years.
There is a difference of $390,161 ($456,500-66,339) in profit in the same time period.
Which property would you choose to grow your wealth with in the next 10 years?
Let's take a look at the trend of residential households by type of dwelling in the last 15 years.
Source: Propnex Research, Singapore Department of Statistics
As seen above, we are seeing a rise in the number of households who own private properties. Statistics have shown an increase of about 5.85% per year since 2005. More and more couples/families are choosing to upgrade to private properties over the years. Why? With more and more households choosing to upgrade over the last few years, what are you missing out on?
Majority of HDB owners like yourself are in their early 30s when their flats are reaching MOP. You are now in your prime years of your career with lots of dreams and aspirations. But what are your housing plans for the next 10 years? How much do you need to save for your children's university studies? What type of property do you wish to own? How much do you need for your retirement? How can you create a property saving plan for yourself? How can you hedge yourself against inflation?
We understand that your HDB flat is not only a shelter but a home to you and your family. But did you know that majority of owners spend most of their income on their property? Wouldn't you want the value of your property to grow and increase? Wouldn't you want your money to work as hard as you?
As you are enter into the next phase of your life (most probably with kids), it is important to work out a 5-10 year plan for your property journey. Just like when you applied for BTO, don't stop there, continue planning your next step after you have fulfilled your MOP.
We encourage you to continue growing your assets, do not let your hard earned money and value of your property depreciate. Avoid massive competition in the market, sell when it is still "new" and choose a property with better potential growth.
Discover the 5 benefits through our sharing:
1. Understand your objective in upgrading and growing your wealth through in-depth analysis
2. Detailed Resale Calculation Worksheet
3. 8 Steps Analysis to choose the right property for you
4. RAM (Risk Analysis Method) to work out a plan to grow your wealth SAFELY
5. Real case study showing how our clients did it
Hi, I'm Terry Wee
CEA Reg. No.: R020146H
PropNex Realty Pte Ltd, License No.: L3008022J
ASSOCIATE DIVISION DIRECTOR
POWERFUL NEGOTIATORS GROUP
PROPNEX REALTY PTE LTD
"I have been in this industry for more than 15 years. I've helped many of my clients upgrade from HDB to Condo and Landed Properties. Some of my clients owned multiple properties for investment. I have also managed their investment properties. Using facts and figures coupled with my experience, they have made clear informed decisions to grow their wealth through property systematically."
My accolades for the past year:
2020 APR GOLD ACHIEVER AWARD
2019 NOV GOLD ACHIEVER AWARD
2019 AUG GOLD ACHIEVER AWARD
2019 JULY TOP 23 INDIVIDUAL PRODUCER AWARD
2019 APRIL SUPER GOLD ACHIEVER AWARD
2019 APRIL TOP 5 PRIVATE PROPERTY TRANSACTOR
2019 PAC TOP 42 INDIVIDUAL PRODUCER AWARD
2018 3QC TOP 93 INDIVIDUAL PRODUCER AWARD
2018 1QC TOP 7 INDIVIDUAL PRODUCER AWARD
2018 PAC TOP 196 INDIVIDUAL PRODUCER AWARD
2018 FEBRUARY TOP 4 STAR PERFORMERS
2018 FEBRUARY TOP 4 PRODUCER AWARD
2017 SEPTEMBER TOP 3 PLATINUM ACHIEVER
2017 SEPTEMBER TOP 5 PROJECT SALESPERSON
2017 JULY TOP 38 PLATINUM ACHIEVER
2017 MAY TOP 1 EXCLUSIVE LISTER
2016 H1 TOP 26 PRODUCERS
2016 Q2 TOP 33 PRODUCERS (PROPNEX)
2016 Q2 TOP 50 PRODUCERS (PNG)
2016 JUNE TOP 11 PRODUCERS (PROPNEX STAR)
2016 JUNE TOP 24 PRODUCERS (PNG)
2016 Q1 TOP 71 PRODUCERS (PROPNEX)
2016 Q1 TOP 30 PRODUCERS (PNG)
2016 FEB TOP 8 PRODUCERS (PROPNEX STAR)
2015 NOV TOP 5 PRIVATE PROPERTY TRANSACTORS
2015 NOV TOP 33 PRODUCERS (PROPNEX STAR)
2015 Q1 TOP 30 PRODUCERS (PROPNEX)
2015 FEB TOP 20 PRODUCERS (PROPNEX STAR)
2015 JAN TOP 17 PRODUCERS (PROPNEX STAR)
2014 AUG TOP 8 PRODUCERS (PROPNEX STAR)
TRUST AND SUPPORT FROM OUR CLIENTS
"With advice and guidance from Terry Wee, my wife and I sold our HDB flat back in 2015. That was a tough decision to make. However, we don't regret our decision, as we bought 2 condos after selling, and now we are appreciating the capital gain, just after more than 2 years."
- Yuzong & Xiaoyun
From 5RM HDB Owners to Investors of 2 Condos
"We contacted Terry through Facebook ad, he gave us an impartial view and it turned out to be a life changing decision. We can attribute the 6 Cs to his professionalism and exemplary service - Courteous, Committed, Competent, Communicative, Composed and Caring. He sold our property in less than a week and at a price higher than valuation. We would unhesitatingly recommend Terry to anyone."
- Kelvin & Kate
From EC Owners to Landed Owner and Condo Investor
"We wanted to keep our HDB EA, it is new and spacious but Terry shared with us the importance of Asset Progression. We took his advice and sold our HDB Flat, that was not an easy decision to make. However, we are glad that we made that decision because now our condo value has appreciated more than $300k and we are very happy that Terry has helped us throughout this upgrading process stress free."
- Hock Seng & Jessica