As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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Sunday, 6 January 2019

Still Making Good Gross Profits Even For Buying Resale 4 Rm HDB Flat More Than 15 years Ago.

During HIP; Uncle8888 has to hang around and sometime sitting at downstairs bench and chatting with his neighbors whose units also undergoing HIP.

One neighbor said Uncle8888 is lucky to make lots money if he sells his 4 rm HDB flat as he bought it cheaply at $55K. This neighbour bought it at resale price at $365K more than 15 years.

A search at PropertyGuru showed up one completed similar 4 rm HDB flat at $428K in the same location.

Hmm .. this neighbour still make gross profit of 17% over cost and enjoying free rental for more than 15 years.

BTW, this neighbour and Uncle8888 won't be selling and likely to leave it as inheritance! :-)


  1. CW,

    Nice 2 real life examples and not using statistical averages like CPI indexes ;)

    Example 1: If you had vouluntarily contributed the $55K to CPF when you bought your HDB 4 room flat, would the compounding be better than your HDB?

    Example 2: Shorter time frame but just as applicable. CPF appears to have won? But if we add the 15 years of rent your neighbour had to pay out of pocket...

    See? Everything is a speculation!

    CPF may be risk-free, but there's a reason why big daddy introduced CPFIS and SRS for those CPF members who want to "invest" to achieve higher returns than what big daddy can offer ;)

    1. Lucky generations must thank Big Daddy!

    2. Pioneer and Merdeka generation profit big time!

      Did Gen X, Y and Z also benefit from BTO?

      How they are thinking on their HDB BTO?

    3. CW,

      Some people thought property would be "dead" after the 2008 GFC...

      But surprise surprise!

      Who knew central banks would print money like no tomorrow?

      Just look at property prices all over the world - from Sydney, Vancouver, London, Hong Kong, etc... Some even went higher than 2007 prices!?

      Just ask those brave (or lucky as in got married no choice must buy mah) Singaporeans who bought properties during 2009. In percentages maybe less than equities; definitely higher in dollars and cents ;)

      HDB 5 room resale in Queenstown already $800K. Won't take long for it to reach $1 million in a decade or 2. By that time, no one will set goals to be a "millionaire" in Singapore!

      Those Pioneer and Merdeka generation staying in rental flats have missed out on the bonanza. That's why big daddy doing its bleeding heart bit by coming up with all sorts of subsidies to help them out - smelly smelly buy your own HDB 2 room!

      Where got other countries do it?

      This initiative must compliment!

      Stick it to those empty vessels who parrot we don't "own" our HDB flats since its a 99 lease! So don't buy lor!

  2. SMOL,

    HDB policy was good. But CPF policy to allow private & resale HDB was bad (for many pre-boomer & even boomer citizens). Many didn't "play" it wisely & over committed.

    Then again, without change in CPF policy, we wouldn't see the 3-4 digit % jump in property prices from the 1980s till now. ;)

    Singapore engaged in QE & pump priming long before it became fashionable in the west. :)

    Of course now we have QT in property. Otherwise that Queenstown 5-rm would be $1.2m liao!


    Your neighbour may have bought near the 1996 high or paid high COV .... $365K over 15 yrs ago is v expensive.

    The earlier Gen X mostly benefited as many bought after the effects of AFC and post-dotcom bust. Property valuations stayed quite "reasonable" for a long time. ;)

    The late late Gen X and early Gen Y may have suffered if they bought during 2008-2014 when property prices (including BTOs) went up much faster than salaries. But if they're lucky or good, they should have big salary increases in the last 4-5 yrs to make up for it.

    Personally I've been lucky ... "forced" to buy during AFC 1998 as I got married then ... $270K for a resale 4-rm HDB in central area ... today conservative valuation around $465K. Potential rental yield on cost of 10.7% ... the rental amount is about the same as for my rental condo! From property tax savings perspective, I'd be much better off staying in my condo & renting out the HDB, but too used to the neighbourhood lah!

    My HDB has come down quite a bit ... max valuation was well over $560K ... had a couple of neighbours who sold theirs around $600K. :O Pity the buyers! LOL!

    Of course now resale HDB kena whacked by all the property QT measures as well as Lawrence Wong's lease decay. :) I think 10 years ago I would be pissed, but now I don't bother.

    As for my rental condo, currently still almost 5% rental yield on cost (gross). As long as above 4% may just treat as perpetual bond ... see how ... I know my wife wants to hold haha! Combined capital gain + rents collected is almost a 1 bagger.

    1. Spur,

      The same can be said of CPFIS. Good intention, but overestimated the investment acumen of the common man who ain't used to thinking for himself...

      Or the abuse with Integrated Medical Policies that resulted in inflation of medical costs due to "profit driven" doctors/hospitals recommending "good to have" tests or procedures to patients who don't feel the burn since insurance companies are paying mah!

      Imagine if CPF is used strictly for retirement purposes as per its original intention. Cannot use for public housing, education for kids, medical claims, investments and all that.

      Wait. What was I thinking!?

      Then how would we - the luckier ones - have benefitted?

      Sometimes its better to be lucky indeed! I bought my HDB 3 room resale during 2003 SARS under the singles scheme for only $125K. I turned 35 the year before ;)

      It has now tripled in valuation.

      There are quite a few millionaires next door types living in our HDB heartlands ;)

      Singapore good or what? Where else in the world can you find citizens living in public housing with private rental properties?


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