In Singapore’s housing scenario, HDB flats (Housing and Development Board) with their mandatory MOP term (minimum occupancy period) play a decisive role in adding housing stock and in checking property flipping and profiteering by the rapid resale of housing property.
The questions weighing on the minds of most HDB flat owners will be--what are the options after HDB mop and opportunities to sell HDB before mop.
When MOP is in force, there is also restriction in buying extra private property. By curbing the sale of allotted flats for a minimum of 5 years, the HDB MOP is stalling the ‘lottery effect’ contagion in many high value prime-district HDB properties.
HDB MOP comes into force the very day you take your keys and the MOP will not include days that you may have resided outside the flat even after moving in.
Most HDB flats have a MOP of five years except the HDB PLH Model which has 10 years of MOP duration. When the MOP nears its end, most house owners will be busy looking for options after the HDB mop.
Let us look at the bigger choices for better housing after the MOP period ends giving the homeowner the liberty to sell his house. Naturally, the impulse will be to upgrade to condos and other upmarket housing units.
However, constraints like the insufficient resale value of the HBD unit and lack of cash surplus may hinder the aspirations for private condos, executive condos, or landed houses.
Exceptions to selling HDB flats during MOP
The MOP discourages property ‘flipping’ and profiteering. However, exceptions to selling HDB before MOP also exist. They include certain special conditions such as bankruptcy, divorce, inability to pay the home loan, or loss of citizenship.
What are the options after HDB mop?
Now let us look at the main options after HDB MOP.
Sell your HDB, Buy Private Condo
Keep your HDB, Buy Private Condo
Sell your HDB, upgrade to Executive Condo
Sell your HDB, purchase 2 private condo
Buy resale HDB flat: This is the humble and cheapest option. It will help you buy HBD flats available on the open market with costs below half a million dollars.
You can purchase an HDB resale flat easily the process is made simpler with the HDB Resale Portal. Although HDB to HDB transition may not look like an upgrade, older resale flats in mature estates are very attractive, and spacious than newer BTOs. Also, many top schools are available in these mature HDB neighbourhoods.
Buy Condominium: Condos are a popular choice for HDB upgraders as the ambition for high life attracts to private condos even if they are costly. A family-sized condo may cost you around 2 million dollars. Then there are additional costs such as registration and charges of the property agent.
Landed Houses: They are costly pieces of real estate and start somewhere at $2.5 million in addition to costs like fees of property agents and home inspectors.
The best part is HDB is that it is exclusive public housing managed by the government and HDB flats are pure housing solutions and not investment tools. To upgrade beyond HDB flats, you can also solicit the advice of property agents and up-graders to get customized advice on the most suitable property.
We understand that financial planning can be a daunting task, and we're here to simplify it for you speak with JJ wong.
If you have a plan in mind but not sure if it works well – do share with me or let me know.
I will do my best to assist you to make sure you look at your plan from multiple angles and ensure you have a very clear picture on what’s going on.
Drop me a HI! in whatsapp and share with me your top most concern in the property upgrading journey.
JJ Wong is the founder of MOPUpgraders.sg and has been a Property Wealth Planner in the real estate market for the past 6 years. He has helped many clients achieve their aspirations with the right financial planning and sound timeline planning. He is the man behind upgrading case studies of those who are holding on property under 10 years.