Buying condo is the dream of many in Singapore. It can be upgrading from HDB or buying a home for the first time.
Like it or not, the Singapore dream is very humble. It is far from saving humanity or making a mark in a field. Sadly, even a reasonable goal of work-life balance or holistic well-being sounds too ambitious. Our wish is only getting BTO, profiting from it and buying condo.
The ERA 2025 My Dream Home Survey shows that about 27 percent young Singaporeans are looking to purchase a condo unit in the next three years. Last year, singles made up a third of OCBC’s new home loan applications for the purchase of private properties.
It is understandable to improve one’s living environment when financial position improves. But are you aware of all the implications behind buying condo? Can you imagine how it is really like staying in a condo? Do you know what type of housing, HDB, condo or landed, is most suitable for your lifestyle?
A condo owner’s confession
A Singapore Uncensored story reads like this (edited for this post):
“I sold my 2-bedroom condo and moved back to a 4-room resale HDB flat. This is the best decision in my life. I have no regrets.
We stayed in the condo for seven years. It looked great with pool, gym and a “prestigious” address. But the reality was different.
I was paying over $400 a month for maintenance fee while using the pool twice a year. The gym was packed with people taking videos for social media.
Our 2-bedder was compact like a shoebox, especially after I was married with a child. It was a logistic nightmare every time we had a new home appliance.
I was stressful that a huge chunk of my take-home pay went to monthly mortgage. Therefore, I sold my condo unit during the recent market peak. With a decent profit. I bought an older 4-room HDB flat. After renovation, there was still a six-figure sum sitting in my CPF and saving account.
My monthly mortgage is now fully covered by CPF. Life is so much better. Older HDB flats are more spacious. The living room is no longer a narrow corridor. My kid can run around without hitting the wall.
Unlike last time I had to drive from the condo to get a bowl of noodles, this mature estate is convenient with coffee shops, wet market and supermarket within 5 minutes’ walk.
There is no longer the pressure to “keep up” to drive a certain car or dress in a certain way. Moving back to HDB is not a downgrade. I stop paying for a lifestyle I don’t even enjoy. Status is temporary. I am happier with liquidity and peace of mind now.”
Are you living for yourself or for others?
Why spend so much money to upgrade to a home with higher payment, less space and more inconvenient location?
You and your family are the ones staying in your home. Who cares what others think? Maturity is understanding who you are instead of comparing yourself with others and living for people you don’t even care.
As American sociologist Charles Horton Cooley said, “I am not what I think I am, and I am not what you think I am. I am what I think you think I am.”
A day before this post, another 34-year-old Singapore guy reportedly spends $3 daily eating three meals of instant noodles so that he can afford buying condo and car four and a half years earlier.
What is the point of skimping if one can barely afford buying condo? Frankly, anyone with enough savings, a windfall or return from investment or business can afford to do so. But does this person have the financial means or money skills to sustain condo living? How is he going to settle the condo-related expenses and taxes over the years?
Why are 10-year-old condominiums in Shenzhen looking older than their 30-year-old counterparts in Hong Kong? Because many owners are willing to spend money buying condo but are unable to settle maintenance fees. You might see the same happening in Malaysia.
“You fail to meet any of the three requirements of 3-3-5 rules. After you purchase the property, you need to settle your mortgage at the expense of your current lifestyle. If you constantly worry about job stability, economic recession, interest rate hikes, low rentals or no tenant, you are “merely stretchable” buying that property.”
– “Can you really afford that property?”, PropertySoul.com
The reality of living in a condo
Another owner has been living in a condominium for the past few years. He vents about a lot of “low class behavior” of the residents which is bothering him:
– Talk loudly and obnoxiously
– Leave garbage along the corridor
– Pile rubbish on top of the dustbin on ground floor lift lobby
– Pee in the swimming pool
– Leave empty beverage cans by the poolside
– Use the clubhouse’s toilet to wash clothes
– Make use of poolside benches and playgrounds to hang laundry
The condo owner is tired of cleaning after them. He complains to MCST but it is unable to do anything. He wonders why some people can afford buying condo but still behave “low class”.
For one, having money and having good values are two different things. Even famous billionaires can be terrible people underneath.
Secondly, if the condominium projects are “mass market condos” (located in neighborhood districts with close to a thousand units), most of the buyers are local HDB upgraders. Why would their HDB mentality and behavior change and upgrade with their housing just because they move to a condo?
When Singapore first came up with the concept of condominiums in the 1970s, buyers paid for exclusivity – prestigious locations out of reach of ordinary people. These days homebuyers pay for the convenient location of mega size condominiums. Since the selling points of the two distinct types of projects are not the same, definitely the buyer profiles will be very different.
Why buying condo can be disappointing
I am often puzzled why HDB owners pay (and owe the bank) so much money buying condo in the same district. Most of the time, they end up having the same profile of residents, but less living space and higher housing expenses.
If the condo development is surrounded by HDB blocks, their unit is going to have the HDB view. On the opposite side, owners of the HDB flats will have the condo view – without paying the high stamp duty, maintenance fee and property tax.
Who do you think have a better deal?
Buying condo might be your important life goal. Because that is what our media, the salespeople, your parents and people around you say so. But once you reach there, you discover the scenery is different from what you imagine all the while. The kind of disappointment is very real.
Typically, the imagination of upgrading to condo comes from what buyers learn from an advertisement, a property agent or an acquaintance. It is difficult to imagine what exactly it is like unless you have stayed in a similar project for some time. That is why I often advise my one-on-one property consultation clients to rent before buying the project or buying in that neighborhood.
Condo is no longer “new” after your purchase
There is something buyers of newly launched projects do not know.
The asking price of an uncompleted project is subjective. It all depends on the cost, margin and how much profit the developer wants to make. In other words, there is no fair price. It doesn’t matter what price the developer lists the new property for sale. As long as a buyer is willing to pay, that is the transaction price.
It is an unwritten rule that all developers market new projects at “future prices” – the highest possible increase of prices in the property market from the launch of the project to completion. Anyway, even if prices are corrected at the time of TOP, buyers are still obliged to pay at the promised “future price”. All economic risks are conveniently passed from developers to homebuyers.
What’s more, buyers are willing to pay at a premium at a new launch because they think it is justified to pay more for a new home.
However, they forget that the status of new is only temporary. In fact, the moment they place a deposit, the property is no longer considered as new in the market. Whether it is completed or uncompleted, their next buyer is buying from them as a sub sale or resale property. Since they are not a developer, the valuation is now determined by the market.
For resale homes, potential buyers are using market valuation for reference. Valuation of residential properties is derived from the average price of a few recent transactions for similar size units in the same project. No buyer in the sub sale and resale market will pay “future price”.
Food for thought
All our life we are surrounded with voices that tell us to study hard, get good grades, find a good job and live a comfortable life. When we finally get there, we may still unable to find fulfilment and satisfaction. This can leave us with a strong sense of emptiness.
Because for a long time everyone tells us what we should go for. But there is barely anyone who asks us what we really want. Similarly, marketers and salespeople simply sell us what they have to sell without asking or caring about what we need.
Buying a home is a personal matter. You and your family should feel comfortable. Buying condo is not the only option. Look at yourself, understand your preferences and lifestyle. Then decide what type of housing is best for you.
If you are a true heartlander and very Singaporean, even if you can afford buying condo, what is wrong with staying in an HDB flat in a neighborhood district?
If you enjoy tranquility and staying away from the crowd, there is always more affordable landed housing in not-so-popular locations.
Stop comparing with people who are nobody to you. Switch off the noises outside. Look inside instead of outside. Ask yourself what type of living is suitable for you.
Good luck in your house hunting!
If you need advice on property matters or residential properties in Singapore, you can check out my one-to-one consultation service.
Check out my new online courses How To Buy Good Quality Properties and Buy The Right Condos.
My book Behind The Scenes of The Property Market is available for preview and order online.
If you miss “The Future of Singapore Homes” education seminar, you can watch the recording here.
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