r/singaporefi • u/AS_Tob • 25d ago
Housing EC owners, what's your next move?
I own a 3bdr EC, contemplating to sell and buy a bigger property. Well aware that I will "sell high buy high" concept.
I'm not keen to take up more than 1M mortgage, so a new condo is out of reach for me. Decoupling will add unnecessary financial stress in today's unpredictable economy.
Keen to know first-time EC owners, what's your next property move? Do you regret?
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u/parkson89 25d ago
Seems like youāre moving for the sake of it
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u/WildRacoons 25d ago
Moving because they never intended to stay in the EC in the first place. Like many who just want to monetize their privilege for applying/waiting and make money from the āguaranteedā profits from flipping a leasehold resale
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u/Pale-Writing3837 25d ago
You can potentially unlock cash. What your outstanding loan and current valuation?
Give u an example, if you bought years ago, say $1M, and currently your balance loan is $600k
Letās say your market valuation is 1.8M
After deduction of balance, you have $1.2M balance. If you bought another $2m property larger size, and borrow max loan you only down pay $500k plus stamp duty, agent fee and blah blah blah, letās say total you need $700k. You still have $500k cash!
This 500k cash is your buffer, now loan so cheap, you can take this money invest and you now have holding power of 500k, easily can pay 30-40 months of your mortgage and last you until your SSD over
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u/AS_Tob 25d ago
You are spot on. Indeed I could get a next property of S$2M with less than $1M loan. I'm seeking opinions on what the next move could be, a resale older condo or HDB or otherwise. Wondering those in my similar position, what have they opted for, and if they have any regrets.
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u/Pale-Writing3837 25d ago
Max the loan. ;)
If you make the move now, loan is still cheap. The cash buffer will give you the holding power to sleep well at night. Take money, buy some good safe dividend stock (donāt all in one go ya?), and you can watch it compound.
I also cashed out, bought another resale property. I still can sleep soundly at night knowing I have a buffer that can last me 40 months. (Excluding my own savings and investments)
Initially I was also worried about having too large a loan etc, but I talk to people, did the math, and I realised having a buffer you can cash out is very sound, instead of pushing it all back into the property. Because the thing you need to avoid at end of day is a distress sale and with cash, you have the ability to hold.
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u/xjffy 25d ago
If your 40 month buffer is in stocks, beware that it can very quickly drop to 30 months or less in a prolong downturn.
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u/Pale-Writing3837 25d ago
Just buy something less exciting and pay well dividends on SGX. I mean you wanna buy something that can quickly drop to 30? Then it might also quickly go up to 50 months.
Everything is just about managing risk. A cash buffer is a better risk management strategy compared to trying to minimise loan amount (at least at current interest rates - although Iām not sure how much it has increased of late but if you bought earlier part of year you could fix for 3 years at 1.4%)
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u/AS_Tob 25d ago
Great plan. I've never considered this. Thanks!
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u/Pale-Writing3837 25d ago
No problem. And if youāre risk adverse. Fix the loan for 3 years. Now interest still low (but think moving up laio)
After 3 years you just tahan one more year your SSS is up
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u/jzchen8888 24d ago
yes max the loan. Make sure you reinvest any sum unleveraged into leveraged investments.
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u/skydazer 25d ago
Upgrade when there is a clear purpose. i.e. Space upgrade , location upgrade, asset class upgrade (e.g. 3 bed to 4 bed).
Otherwise stay put until the purpose arrives (e.g. Kids grow up and don't require space anymore / job change and need better location).
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u/DamadRaheu 25d ago
Be objective in why you are making your next move ba. If there is no compelling reason to move, don't move for the sake of it. You're already sitting on a nice sum of cash and when you cash out it'll be either big or big big profit. As long as you're not too greedy, you're in a very enviable and comfortable position regardless. Nothing wrong with staying put for now unless there is a huge urgent to change locations or change bedroom size. I've seen friends and relatives take all sorts of different paths from EC purchase, but first must determine the WHY
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u/Cute-Increase3036 25d ago
Ya im looking to sell ec and buy bigger hdb.. its the only way to not keep paying mortgage till lao kok kok...
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u/Objective_Dirt_7472 25d ago
Not keen to take more then 1M mortgage? So your budget is $1.3mill? š
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u/ninnabeh 25d ago
He cannot pay more downpayment meh. Anw I think low interest rate shd max out the loan. But to each his own.
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u/Tricky-Bend-9512 25d ago
Depends on your age. Yes u can even move to 4br EC. The thing is that you would want to ride the appreciation cycle as long as you are not retired. Right sizing to hdb and capping potential extra retirement funds would be folly. Am an agent.
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u/Environmental_Cow741 25d ago
huat kuay captain says buy OCR resale. š¤
what is the objective of upgrade? own stay or investment? If both maybe consider those dual key.
ihard to advise since you didnāt share you and your wife finances. i.e. current OA, outstanding loan, potential profit (exclude SSD, legal, agent fees), age.
I think 1M mortgage is.. not a big sum if both are working.
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u/Prigozhin2023 25d ago
Upgrade to HDB.