5 Reasons Why You Should Consider Upgrading
Loss in 2.5% interest earnings by locking monies inside fully paid HDB
You need to pay ACCRUED INTEREST of 2.5% on the CPF you used for the HDB
15% Drop In HDB Value For Flats 5 - 10 Years Old (eg. SengKang MOP flat)
Plan early and Create an Opportunity To Make Profit of up to $400K
Create a Legacy Plan for your children
1. Loss in 2.5% interest earnings
For example, Mr and Mrs Lim, both 35 years old stayed in a Sengkang 4 room flat, after fulfilling their 5 years MOP (Minimum Occupation Period), the value of their flat is $500,000 and they chose not to sell. The $500,000 worth of CPF funds is locked in with their HDB. At the end of 10 years, they lose $62,500 in interest earnings.
2. Paying accrued interest of 2.6% on CPF used
For Example, if Mr and Mrs Lim sell their HDB 5 years later, they would have to return $569,334.12 to CPF. ($500,000 compounded yearly at 2.6% for 5 years), which is $69,334.12 less cash from their property sales proceeds.
Total Opportunity Lost $62,500 + $65,704 = $128,204
3. 15% drop in HDB value
The above chart shows that if Mr and Mrs Lim were to sell their flat at the 10th year, the price would have dropped by 15% from it's highest value. This is not only happening to Sengkang HDB 4 room flat!! Many HDB Estates and different flat types are facing the same problem as we speak. Have you ever questioned yourself WHY??? What if they can TURN BACK the clock to 2014? What would be the different for Mr and Mrs Lim if they sold their flat during the 5th year in 2014? See below
4. Create an opportunity to make up to $400K
Mr and Mrs Lim took action immediately!! They sold their flat and switched to a private property in 2014. They made a good profit of more than $300K, making use of their CPF locked in their HDB to work hard for them!!
5. Creating a legacy plan for your children
Do you want to hold a property that will not grow, or one that will appreciate in the next 5-10 years? "Singapore’s private property prices set to double by 2030, Morgan Stanley".