Exploring Singapore: The Top 5 Surprising Facts You Never Knew
Singapore, a city-state in Southeast Asia, is known for its rich cultural heritage, diverse population, and vibrant food scene. This...
Read More
TLDR
The increasing trend of right-sizing properties in Singapore is driven by various factors such as lifestyle changes, financial gains, practicality, location preferences, investment opportunities, lease considerations, and preemptive measures. Homeowners are downsizing to better suit their evolving needs and circumstances, whether it be for convenience, financial benefits, or to capitalize on market conditions. Making informed decisions based on individual situations and market insights can lead to successful property transitions and optimized outcomes.
After being settled in their homes for a while, many homeowners become content with their surroundings, dismissing the idea of selling up and moving to another house, or even downsizing to something more suitable.
While not everyone who purchases a property initially has plans to be a seller at some point in the future, certain external and internal pressures may cause them to rethink this.
Older couples often choose to downsize in order to be closer to their grandchildren.
When their children age, marry, and move out, many homeowners recognize they’re living in a big, empty house. They spend too much time cleaning (or repairing) it and little time for other activities – so they may choose to downsize and move closer to their grandchildren, making it easier to spend quality time with them.
Right-sizing your property has become a popular trend nowadays, and for good reason! Not only do older homeowners downsize to a smaller space, but singles, couples and young families are doing the same for a variety of reasons.
Here are seven of the top reasons why right-sizing your property might be a great idea!
1. Lifestyle
As life circumstances evolve, homeowners may find themselves in need of downsizing.
Maybe they initially married and bought a larger property with plans to fill it with children and furry friends, but eventually, their career paths or family size changed, leaving them with too much room and too little need for it.
Whatever the cause, right-sizing can help to readjust their living environment to better suit their lifestyle.
If your job now calls for you to travel more, a huge home you hardly live in may not be the best idea. You may be far from the airport, so considering downscaling to a more compact place near the airport might be a wiser choice.
If frequent flying is now part of your job or lifestyle, it might make sense to downsize and buy a smaller home closer to the airport.
As your family grows, you may find yourself in need of more bedrooms and study spaces, but if you have already made the unfortunate decision to make irreversible changes to the structure of your home, such as converting bedrooms into larger living rooms or walk-in wardrobes, then you could be left with no other option than to consider another lifestyle change.
Realize that it’s time to downsize and find the perfect apartment with the ideal number of bedrooms and bathrooms for you and your family – sell your current home and make it happen!
2. Financial
One homeowner found financial success after right-sizing; they bought a 3,864-square-foot apartment at the Citylife@Tampines executive condominium nine years ago and recently sold it, netting a profit of S$1.38m! Not only did they time the sale perfectly, but they also managed to reap the benefits of right-sizing while earning a windfall.
In August, someone at Marina Bay Suites made a huge profit after holding onto their 2,691-sqft EC unit for almost 9 years. They sold it for S$3.25m less than they paid, an impressive return on investment! It’s likely timing played a part in this decision, plus a need for additional liquidity.
Not only that, the cash from the sale could go towards downsizing to a smaller apartment and having extra funds to save. There could be many reasons to right-size beyond just financial gains.
If you’re looking for a new home, it’s important to consider more than just the monthly mortgage payments – larger apartments usually mean higher maintenance fees, property taxes, and energy costs too, particularly with the COVID circuit breaker having seen more residents staying at home and making use of extra air-conditioning.
Additionally, larger condos often have higher quarterly maintenance fees depending on the size of the unit, so right-sizing your home could be a great way to save money.
Moreover, if you’re over the age of 55, you could be eligible for grants and subsidies, making this an even more attractive option!
If you’re ready to downsize to a 3-room HDB flat or smaller, you could be eligible for the Silver Housing Bonus scheme. You could receive a cash bonus of up to S$30,000 and be required to deposit some of the proceeds of your existing flat into your CPF Retirement Account in order to benefit from the life annuity scheme which provides monthly retirement payouts.
3. Practical
As a homeowner, it might be wise to downsize if your house is demanding more of your time and attention than you can give. Maintenance issues such as cleaning and repairs can take up a great deal of energy and money.
For instance, perhaps you realize that the upkeep of your roof, flooring, and drainage systems is taking too much out of you; downsizing to an apartment could be a great solution.
Additionally, if your house is located far from essential facilities such as malls, wet markets, and transportation hubs, it could be a good idea to consider selling it and relocating somewhere closer to these amenities.
If you’re an eligible senior, why not downsize to an HDB Community Care Apartment and move into a convenient, car-lite neighbourhood with nearby medical facilities – where all your needs are just a stone’s throw away?
Have you been paying the monthly maintenance fees without taking advantage of the amenities in your condo? Maybe it’s time to reevaluate why you’ve chosen to stay in that condo if you don’t often use the facilities or participate in the AGM decision-making process.
During the pandemic, many have come to the realisation that they have not been using the amenities as much as they had expected, yet still paying for them nonetheless.
4. Location
Due to changes in the neighbourhood, right-sizing may be necessary – a new building potentially obstructing your breathtaking unblocked view, or disrupting the feng shui in your home. Plus, roadworks and developments could create an uproar of construction noise over the next few years, completely shattering the peace of your residence.
Downsizing is a great option for those looking to move closer to desired amenities such as medical facilities, transport hubs, schools, or even wet markets; it also allows people to be near (or far from) the hustle and bustle of the city.
For example, a family could transition from a larger 5-room suburban condo to a more intimate 4-room HDB resale flat located in a bustling urban center, making the most of their newfound convenience and proximity to the city.
5. Investment
It seems that for some homeowners, owning multiple apartments is quite common – with one for themselves, and the rest to invest and rent out.
For instance, after spending years living in a 4-bedroom condo, a family may now decide to downsize and return to their 4-room HDB flat, offering their condo up for sale.
Minister for National Development Desmond Lee recently shared that approximately 3% of HDB flat owners also own private property, with around 45% renting out their entire HDB flats.
With the significant jump in property prices over the last year, some private property owners may choose to cash out by selling their larger apartments and downsizing to their existing HDB flats.
6. Lease
When a homeowner’s lease is close to running out, they often decide to put their property on the market. With the property’s value increasing, it can be the ideal time to sell and downsize to a newer, more compact flat with a fresh 99-year lease.
This is especially true for HDB flat owners with shorter leases, who may have to sell their property within 6 months of collecting the keys to their new BTOs.
By taking advantage of HDB’s Contra Payment Facility or Temporary Loan Scheme, you can fund your BTO flat without stress while waiting to sell your current flat.
When the sale is done, the money can be used to repay the loan. Keep in mind, though, that the Contra Payment Facility is an extra loan on top of your HDB housing loan if your CPF Ordinary Account funds are not enough, and TLS is a temporary loan which is intended to be repaid using the proceeds of the sale of your existing flat without needing to get a housing loan.
7. Preemptive
Some homeowners choose to list their properties for sale due to the potential of future complications, in order to make the most of their asset’s value while they still can.
An example of this is the possibility of implementing cooling measures, which could come into effect at any time. These regulations tend to limit the buying and selling process, making it more difficult for a seller to find a purchaser who will agree to their asking price.
In this current climate of geopolitical uncertainty, inflation, and higher mortgage rates, savvy home sellers are recognizing the importance of listing their properties early.
By doing so, they can take advantage of appreciated gains and downsize to a smaller home, positioning themselves to weather potential financial difficulties or a loss of income.
Acting ahead of the curve, these well-informed home sellers can turn a significant profit.
Should You Buy, Sell or Wait?
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
You May Also Like …
Top 5 : Factors Influence Real Estate Investors’ Decisions when Investing in Singapore Condos?
Singapore's real estate market has always been an attractive investment option for both local and foreign investors. The city-state's stable...
Read More
6 Reasons to Think Twice Before Hiring a Friend or Family Member as Your Agent
TLDR In Singapore, hiring a friend or family member as your property agent can be risky. Disclosing sensitive financial details...
Read More
Singapore’s Best Kept Real Estate Secrets: 5 Insider Tips for Savvy Investors
Singapore's Best Kept Real Estate Secrets: 5 Insider Tips for Savvy Investors Here are 5 insider tips for those looking...
Read More
5 Reasons : Why Singapore’s Rental Market Is Still Lucrative For Property Investors
Singapore's property market has always been an attractive investment option due to its stability and potential for high returns. While...
Read More
6 Essential Factors HDB Upgraders Should Be Aware Of Before Purchasing a Condo in 2023
TLDR When upgrading your property, consider factors like rental rates, Buyer's Stamp Duty adjustments, higher interest rates for bank loans,...
Read More
The Top 5 Renovation Tips For Increasing The Value Of Your Singapore Property Investment
When it comes to increasing the value of your Singapore property investment, strategic renovations can make a significant difference. Here...
Read More
Singapore’s Top 5 Property Investment Hotspots for 2024
As one of the world's leading financial centers, Singapore has always been a popular destination for property investment. With a...
Read More
Top 5 Thai Restaurants in Singapore
Singapore, a melting pot of cultures and cuisines, is a food lover's paradise. Among the myriad of dining options available,...
Read More
Tips for Choosing the Home of Your Dreams
TLDR Decoding the Singapore property market can be challenging, but understanding key factors like property size, location, and lease tenure...
Read More
Resale Viewing Do’s and Don’ts: Expert Advice from a Singapore Real Estate Agent
TLDR The blog post provides valuable insights for first-time buyers on navigating the resale property market in Singapore. It covers...
Read More
Singapore’s Housing Phenomenon: A Success Tale Calling for Tweaks – Insights from the Experts
TLDR Singapore's housing system has been praised for its effectiveness in meeting citizens' homeownership desires. The public housing program by...
Read More
5 Facilities Selling Points Condo Sellers Should Emphasize To Entice Potential Buyers
TLDR When selling a condo, focusing on highlighting key facilities like gyms, swimming pools, family-friendly amenities, community gardens, and clubhouse...
Read More
Integrated Developments: Do They Live Up to the Hype? Check Out These Five Factors
TLDR Integrated developments in Singapore offer a one-stop solution for residents by combining residential, commercial, and transport elements in one...
Read More
What Factors Contribute To Singapore’s Real Estate Market Exhibiting Less Volatility Than Other Major Cities?
TLDR The Singaporean real estate market has remained stable due to government cooling measures. These include Additional Buyer's Stamp Duty...
Read More
5 Tips : How To Negotiate A Good Deal When Buying A Singapore Property
When looking to buy a property in Singapore, it's essential to know how to negotiate a good deal. Here are...
Read More
Top 5 Tips : How Does One Choose Good Property In Singapore?
Singapore, a thriving city-state known for its impressive skyline and robust economy, has always been an attractive destination for property...
Read More
The Hidden Hurdles of Purchasing a BTO Flat in Singapore: Unveiling 4 Lesser-Known Challenges During the 5-Year MOP
TLDR When contemplating the purchase or sale of a property under the Minimum Occupancy Period (MOP), it's crucial to consider...
Read More
Top 5 Rooftop Pools in Singapore for a Swim
Singapore, a bustling city-state known for its iconic skyline and innovative architecture, is home to some of the most stunning...
Read More
Beyond Buying: Innovative Strategies for Property Investment Success
TLDR The world of property investment and real estate trends offers vast opportunities. Stay informed with effective property investment strategies...
Read More
