Update as of 01/04/2021: 99.co has come to understand that the buyer isn’t a single individual. We’ve since made some adjustments to the article. Last week, a report grabbed headlines when all 20 units of EDEN, a freehold condo at 2 Draycott Park, were sold. The purchase amounted to S$293 million, which translates to S$14.65...
The post All units of entire EDEN condo at Ardmore-Draycott enclave sold: A closer look at transactions along the billionaire’s belt appeared first on 99.co.
On the first day of 2021, our Prime Minister broke the bad news that the Kuala Lumpur-Singapore High Speed Rail (HSR) project had been terminated. Several Malaysian news reports quoted unnamed sources that the Malaysian Cabinet would go ahead with the project without Singapore and end the railway in Johor. Early this week (Mar 29),... [read more]
The post 4 lessons we learned from buying homes in Johor appeared first on Property Soul.
Residential property prices in Orchard and Newton in the Core Central Region (CCR) are set to benefit from the upcoming URA Master Plans to enhance both districts. We look at what these Master Plans entail and how both districts are expected to change over the coming decade. The URA Master Plan is what savvy property...
The post Rejuvenating the Core Central Region: URA’s Master Plans for Orchard and Newton appeared first on 99.co.
Residential property prices in Orchard and Novena (and Newton) in the Core Central Region (CCR) are set to benefit from the upcoming URA Master Plans to enhance both districts. We look at what these Master Plans entail and how both districts are expected to change over the coming decade. The URA Master Plan is what...
The post Rejuvenating the Core Central Region: URA’s Master Plans for Orchard and Novena appeared first on 99.co.
Properties in Singapore are not only becoming more expensive, but they are shrinking in size as well. As such, if you’re searching for a larger home (without breaking the bank), one option is to go for larger HDB flats types such as HDB maisonettes, jumbo HDB flats, and 3Gen flats.
But which should you pick? This article will take a look at the biggest HDB flat types available and what sets them apart.
|
Flat type |
Size |
Price |
|
HDB Maisonette |
1,527 to 1,700 sq ft |
From $620,000 |
|
Jumbo flat |
1,442 sq ft to 1,830 sq ft |
From $650,000 |
|
3Gen flat |
1,238 sq ft |
From $246,000 |
|
Executive apartment |
1,507 sq ft to 1,615 sq ft |
From $550,000 |
|
5-Room flat |
1,184 sq ft to 1,474 sq ft |
From $394,000 |
Though they have been discontinued since 1995, HDB maisonette (or executive maisonette) flats are still highly sought after by buyers because of their spacious interiors and unique two-storey design. As such, HDB maisonettes tend to fetch higher prices despite their dwindling lease. In fact, HDB maisonettes start from around $620,000 and it’s not uncommon to see these flats transacting above $1 million in prime locations.
Apart from having two storeys, HDB maisonettes typically range between 1,527 to 1,700 sq ft, with some as large as 2,314 sq ft. This makes them popular among couples or families who require more room.
HDB maisonettes also have three bedrooms and three bathrooms, which is one more than conventional HDB flats. The bedrooms are located on the top floor, offering the occupants some privacy. In addition, maisonette flats also come with balcony space, which is great if you want to air-dry your clothes or have a mini outdoor garden.
As these flats were built in the olden days, they’re mostly located in mature estates such as Ang Mo Kio, Bishan, Bedok, Bukit Panjang, Bukit Batok, Choa Chu Kang, Hougang, Pasir Ris, Queenstown, Serangoon and Sembawang.
Find HDB maisonette flats for sale on PropertyGuru
Combined flat via HDB's Conversion Scheme. Source
Jumbo HDB flats are another popular HDB flat type that is no longer in production. They were built by HDB in 1989 by combining unsold 3-room and 4-room flats in estates such as Yishun and Woodlands. As such, these flats are known to be super spacious, ranging approx. 1,442 sq ft to 1,830 sq ft.
In terms of characteristics, jumbo flats have a large living and kitchen area because of the combined space. The large floor area makes them popular among large, multi-generational families who desire more space. However, it's not uncommon for owners to convert the space into extra bedrooms.
Though they come at a premium price of $650,000 to $950,000, it’s unlikely that you will find a home that’s as roomy for the same price, especially within the condo or executive condo (EC) market.
But with only about 2,900 jumbo flats remaining in Ang Mo Kio, Bishan, Bedok, Hougang, Jurong East, Pasir Ris and Tampines, you may have difficulties finding one in the resale market. You can however, create your own jumbo flat via HDB’s Conversion Scheme — by combining two adjoining 3-room (or smaller) flats. Read more about the scheme here.
Find jumbo HDB flats for sale on PropertyGuru.
3Gen HDB flat floor plan by HDB
Three-Generation flat, or more commonly known as 3Gen Flat, was introduced by HDB for multi-generational families who want to live together. Since their introduction in 2013, they’ve become extremely popular among larger families. They’re usually launched alongside BTO sales launches in the year, though these are far and few between. As such, 3Gen flats are usually priced around the same as new BTO flats, starting from around $246,000 to $589,000, depending on the area.
In terms of size, they’re 115 sqm (approx. 1,238 sq ft), which is slightly bigger than 5-room flats (110 sq m). However, what sets them apart from 5-room flats is they have four bedrooms and three bathrooms, two of which are attached bathrooms, though the bedrooms may be smaller.
As 3Gen flats are designed for multi-generation families; the bedrooms are located on opposite sides of the shared living area to give the occupants more privacy (think of it like dual-key condos but without a main and sub-unit).
To buy a 3Gen flat, you need to form a multi-generation family with your parents and children as they would be listed as occupiers. This means that all occupiers (including your parents) must not own any property both locally and abroad. Additionally, their income will also be taken as part of the monthly household income (which is up to $21,000).
Lastly, you can only sell your flat to another multi-generation family once the 5-year MOP is up. You also can’t rent the rooms out, even after the MOP.
Read more about the eligibility of 3Gen flats on HDB’s site here.
Executive apartments (EAs) were first built in the 1980s for families who want bigger homes. Like most HDB flat types on this list, EAs are no longer in production as they were phased out in 2005.
In terms of design and size, they have three bedrooms and two bathrooms (similar to 5-room flats). However, the EAs come with a larger living area which can be converted into a study room. They’re also larger than 5-room flats, ranging from 140 sq m to 150 sq m (appox. 1,507 sq ft to 1,615 sq ft). EAs in the 1990s were the biggest in size.
EAs are priced from around $550,000 to over $1M, based on location.
Find executive apartments for sale on PropertyGuru here.
5-room flats are the only new flat type that most can BTO for (you need to apply as a multi-generation family for 3Gen flat). They come with three bedrooms and are one of the two (the other being 4-room flats) most popular flat types during HDB BTO launches. Take the November 2020 BTO launch, for example, 5-room flats across the various launches, including those in Bishan and Bidadari, were heavily oversubscribed.
At 110 sq m (1,184 sq ft), it may be the ‘smallest’ flat type on this list, but it’s still suitable for large families or those we desire more space. Older 5-room flats built before the 2000s were also larger than present-day ones, ranging from 117 sq m to 137 sq m (approx. 1,259 sq ft to 1,474 sq ft).
Based on February’s 2021 BTO launch, new 5-room flats in Tengah start from around $394,000, while resale units are priced from $575,000 on PropertyGuru.
Find 5-room flats for sale on PropertyGuru here.
Singles 35 years old and above can buy resale HDB maisonette flats under the Single Singapore Citizen Scheme or Joint Singles Scheme.
As jumbo HDB flats have been discontinued, you can only find them in the resale market. They are typically located in areas such as Ang Mo Kio, Bishan, Bedok, Hougang, Jurong East, Pasir Ris and Tampines.
Three-Generation Flat, or 3Gen flat, is a flat type that is designed for multi-generation living. They have four bedrooms and three bathrooms that are located on opposite ends of the shared living area to give privacy.
The executive apartment is an HDB flat type that was built in the 1980s for families who desire bigger space. They have three bedrooms and two bathrooms but are larger than 5-room flats, ranging from 140 sq m to 150 sq m as they have an additional space that can be used as a study room or living room.
5-room flats are 110 sq m (1,184 sq ft). But older 5-room flats built before the 2000s were larger than present-day ones, ranging from 117 sq m to 137 sq m (approx. 1,259 sq ft to 1,474 sq ft).
For more property news, resources and useful content like this article, check out PropertyGuru’s guides section.
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When it comes to investing in a property, most people would prefer to buy a residential over commercial property because it’s just so much easier. However, with the implementation of tighter Additional Buyer’s Stamp Duty (ABSD) rules in the 2018 cooling measures, it has become even more restrictive to buy a second or subsequent residential property.
As such, you may be wondering if it makes more sense to invest in a commercial property instead. After all, you may have heard whispers that you won’t have to pay ABSD for commercial property purchases. While this is true, this shouldn’t be the main basis for your decision as it’s important to understand the risks of buying a commercial property, because remember, it’s a big-ticket item that involves a lot of funds.
So, if you’re interested in investing in a commercial property, here’s a basic guide to help you out.
Unlike a residential property where you can reside and live in, a commercial property is a building mainly for business purposes or work. For the property owner, it is used to generate profit, either through rental income or capital gains.
There are three types of commercial properties: retail, industrial and commercial, and hotel:
|
Type of commercial property |
Examples |
|
Retail |
Shopping malls, pet shops, gyms, restaurants, bars, shophouses, HDB shophouses |
|
Industrial and commercial |
B1 (Offices, warehouses), B2 (factories) |
|
Hotel |
Hotels, hostels |
Since commercial properties are mainly for rental income or capital gains, interested buyers are usually investors or businessmen. As there is also no ABSD involved, they’re also attractive to foreign buyers.
Yes. While there are restrictions for foreigners when it comes to buying residential properties (generally, foreigners can only buy non-landed private homes and landed properties in Sentosa Cove), there are no such restrictions for commercial properties.
In fact, according to the Residential Property Act, foreigners can buy the following commercial properties:
(Note that foreigners may be allowed to buy landed properties if they manage to obtain special approval from the Singapore Land Authority (ahem, James Dyson)).
In other words, foreigners have the same privileges as locals for commercial property purchases.
For locals, there are no income caps or eligibility restrictions. However, buying a commercial property is quite different from residential as there are several key considerations to take note of:
As explained above, there are various different types of commercial properties available, ranging from B1 industrial buildings and retails shops to office buildings and restaurants. Not only do they vary in costs, but each also has its own traits and risks.
For example, heritage shophouses are limited and prized in Singapore as they’re conserved by the government. They are also mostly located in the Central Areas and often have lower rents, making them popular among startups and small businesses who value the location but cannot afford the high rent costs of traditional offices.
Therefore, investing in a shophouse may make sense because they’re highly in demand, and you can expect to get good rental yields. They also hold well in value, so you can also expect to get good capital gains should you sell them in the future.
However, shophouses aren’t cheap (they can be as expensive as a landed property), and depending on the type of shophouse, their usage may be restricted to their zones; some shophouses are for commercial use only, while others can be both residential and commercial.
So before deciding which property to buy, choose one that has the potential to generate good rental income or capital appreciation.
Like residential properties, commercial properties are also zoned according to their uses on the URA Master Plan. Depending on the type of property and its uses, you may need to apply for planning permission from URA.
For example, if you plan to convert a retail shop into a commercial school, you need to adhere to URA’s guidelines or seek approval from them. Each commercial property has its own guidelines and regulations, which you may refer here.
Location plays an important role because it affects the type of property that you’re interested in and its tenure.
For example, if you’re interested in buying an industrial property in Woodlands or Punggol, you may only be limited to those with 60 years lease.
Additionally, while investing in a commercial property near MRT stations and densely populated residential areas may have a good track record, the location is also highly dependent on the developments in the area.
For example, if there’s an en bloc sale or if the government decides to redevelop the land, it could potentially affect human traffic and therefore also your business.
As mentioned above, unlike residential property purchases, you won’t have to pay ABSD when buying a commercial property even when you already own a residential home. Depending on your residence status (i.e. whether you’re a Singapore citizen, permanent resident or foreigner), it means saving between 12 to 20% ABSD, which is a substantial amount.
Suggested read: Should You Invest In Commercial Or Industrial Property To “Escape” ABSD?
You don’t need to pay SSD for commercial properties except when buying industrial properties such as factories. According to IRAS, the SSD amount you need to pay depends on the holding period (number of years that you own the property before you sell it).
|
Holding period |
SSD rate (on the actual price |
|
1 year |
15% |
|
1 to 2 years |
10% |
|
2 to 3 years |
5% |
|
More than 3 years |
No SSD payable |
While you can use your savings in your CPF account to pay the downpayment and mortgage for a residential property, you can’t do the same for a commercial property; the mortgage and downpayment must be paid in cash.
You can borrow a bank loan of up to 80% of the loan-to-value (LTV), which is higher than residential properties (up to 75%). But since you can’t use funds from your CPF account, you need to fork out at least 20% of the downpayment in cash.
Also, depending on whether you’re buying for investment or for your own use, the LTV may be lower and stricter if you’re buying for investment because banks consider commercial properties to have higher risks.
Like residential property loans, there are also fixed rate and floating rate loans. However, interest rates for commercial properties are higher, even though the loan tenure for commercial loans is also shorter (capped at 30 years), compared to home loans (up to 35 years).
GST
When buying a commercial property, you also need to pay 7% GST. Note that you also can’t use your CPF funds or the bank loan to pay for it, so you must fork it out on your own.
Property Tax
Like residential properties, you also need to pay property tax for commercial properties. However, the difference is the tax rate for residential properties varies from 0% to 20% depending on whether you’re an owner-occupier. For commercial properties, you pay a flat rate of 10% of the annual value, which is the estimated gross annual rent if it were rented out. It is based on the market rental value of similar properties in the area.
Price
When buying a commercial property, the cash outlay required is dependent on the property type. For example, small offices and independent shops are cheaper, but bigger properties such as factories require more funds.
Apart from that, prices are also influenced by economic conditions. For example, tenants and rental demand will increase if the sector is doing well and the opposite is also true during a recession, which would drive down rental yield.
Residential properties usually have a lease of either 99 years, 999 years, or freehold.
In contrast, commercial properties usually have shorter leases and it’s not uncommon to see properties with 30 years or 60 years lease. Though freehold commercial properties do exist, they’re rarely located in prime areas and usually command a premium.
On average, commercial properties have a rental yield of around 5%. This is higher compared to residential properties, which is usually around 2 to 3%.
However, remember that commercial properties also have higher maintenance costs, such as utility bills and general maintenance.
You can apply for a commercial property loan as an individual or as a company. Like residential property loans, you will be subjected to Total Debt Servicing Ratio (TDSR).
If you’re buying as an individual, then TDSR will apply to your individual income. In other words, your total debt obligations can’t be more than 60% of your monthly income.
For companies, banks will evaluate the TDSR based on the company’s annual net operating income and annual debt. If the company’s financial health isn’t well, then banks may also take the directors’ annual incomes as part of TDSR evaluation.
To check for information such as commercial property projects in the pipeline, median rentals, vacancy rates, and commercial transactions in the last few years, you may refer to URA’s site.
The URA will announce Government Land Sales (GLS) sites for sale twice a year. There will be a mix of both residential and commercial sites that are on the Confirmed List and Reserved List. The land will be awarded via an open tender process. If you’re looking for White Sites or Hotel Sites, then you should check URA’s website for the latest sites for sale.
The loan process for commercial property loans tends to be more personalised than residential property loans.
Banks have their own eligibility conditions and processes for commercial loans. Applicants usually have to get in touch with specific banks in order to discuss their commercial property transactions. Based on the particulars of the situation, the bank will advise on what documents to submit in your application.
If you need to find and compare commercial loans across different banks, or get unbiased recommendations on the best loan to take, speak to our Home Advisors on PropertyGuru Finance for free now.
Commercial properties are taxed 10% of the Annual Value.
Unlike residential properties, you can’t use your CPF funds to buy/pay for a commercial property.
The Annual Value is based on the market rental value of surrounding properties in the area. If the rental value is up, so will the AV rate. Similarly when the rental value heads south, so will the AV rates. The Annual Value is calculated based on the rental value minus reasonable furniture rental and maintenance fees.
The LTV for commercial properties is 80%, meaning that you need to pay the remaining 20% downpayment in cash (you can’t use CPF funds).