From EC to District 10 Condo: How one couple’s property investment decision evolved – Property Blog Singapore

Would you like to pay off an Executive Condominium (EC) in full or buy a District 10 condo on loan? These are very different approaches to real estate, and you might think we’re talking about two different buyer personas. However, that’s the journey M and her husband have been through – from a rather conservative mortgage-free approach to buying an EC, to buying a unit at the recently completed RoyalGreen in District 10. Here’s how did it happen :

Deciding to own a second property

At the end of 2021, M and her spouse had reached the end of their Minimum Occupancy Period (MOP) of five years. This allowed them to sell their apartment and buy a new property.

Early on, the couple decided that the property would be investment-oriented:

We have welcomed two beautiful babies in the past few years,” says M. “So I made the decision to move in with my in-laws, to get all the help I could get.

Also, between intimacy and the possibility of earning more, we have chosen the latter. So we knew the next property was definitely for investment; but we also wanted something that we wouldn’t mind staying, if the plan turns south.”

view of punggol bay

M’s first choice was a three-bed in a particular CE, located in Punggol. It was on the basis that they could afford to pay it back in full; the rental income would then bring a positive cash flow.

M, however, sought a second opinion from his cousin who was apparently doing well in the real estate market:

My cousin bought a unit at Stirling Residences and realized capital gains; he said my plan wasn’t the best idea and introduced me to his agent.

I guess sometimes it’s best to leave that to people who know the real estate market better. Through the agent, I was educated on CCR/RCR/OCR*, the benefits of owning spousal property, and other factors such as new introductory payment structures**”.

It is difficult to decide whether to pay off the property in full. Although emotionally reassuring, it is sometimes less financially prudent to do so. Although you can save on interest, it can lock in your capital and leave you with limited savings when you need them. We suggest talking to a finance professional before deciding to pay for the entire property upfront (we have more details on that in this previous article).

It can sometimes be a good decision, but it’s not ideal for everyone. The couple instead devised a new plan, involving an investment property in District 10.

My husband did the hard part, calculating and liaising with many bankers for the loans, and I did the research to check what the agent recommended.

It was quite overwhelming to narrow down the location we wanted; I knew we had to meet criteria like being less than five minutes walk from the MRT and primary schools), good price differences between projects, etc. We kept going back and forth about the pros and cons of each project..”

*Central Central Region, Rest of Central Region and Out of Central Region

**See This article for more details on the Progress Payment Program for new condos

Choosing the investment property, and a lucky encounter

The couple’s first choice was Fourth Avenue Residences. The plan was to get a two bed unit. This unit ticked all the boxes for the MRT and proximity to school; and M loved the Bukit Timah area. They settled into a unit on the seventh floor, facing the tennis court; it was about $2,558 psf.

fourth avenue residences

But on the day I was supposed to drop off the check for Fourth Avenue, I went to the RoyalGreen show apartment, which was across from the Fourth Avenue one, to use their restroom.

While waiting for me, my husband overheard an agent telling a customer that RoyalGreen was having a clearance sale. We never considered RoyalGreen initially, as it is freehold and marketed at $2,900 psf.

Out of curiosity, we checked the fire sale and saw prices of $2,598 psf with the same coating. It was close to the price of what I was going to pay for Fourth Avenue, which is on lease..”

royalgreen fire sale

By the way, most leasehold buyers would face a 15-20% premium for a freehold counterpart (all other factors being equal).

Get the second property

M says the second property came”after long calculations, accepting the risk and getting loan approval, which was not easy.

For couples who are each buying a separate property, the loan issues aren’t limited to interest rates. In these cases, the banks will have to determine whether each spouse has the financial means to assume the entire mortgage alone. As this is a higher risk profile, banks tend to be more hesitant (and the bank providing the loan may not be the cheapest).

For these situations, we suggest buyers speak to a mortgage broker; they can help with paperwork as well as find the cheapest loan. You don’t even have to pay them, because they are paid by the banks.

The couple decided to acquire a larger four-bed in the RCR. M notes that, seeing how well Sims Urban Oasis was doing, they wanted to tap into a similar trend. The condo they chose was Penrose. However, it was not a quick choice.

penrose pool

M notes that the couple went through an intense selection process, during which many projects were considered and abandoned. There was even a time when land ownership was in contention. By the time they had decided to buy the Penrose, the options were running out. M says that:

Penrose was left with very few unit choices. We chose the premium stack with a better layout (in our opinion), hoping that the future tenant or buyer will also prefer it.

We chose the layout with all the rooms facing the pool, instead of those where one bedroom wouldn’t have a view. It wasn’t the cheapest unit, but we’re glad we bought it before the developer raised the price during Chinese New Year.

Developers tend to increase prices over time to entice early buyers. You can learn more about these pricing strategies in this article.

Future plans for Royal Green

The couple hope to have a chance of being en bloc in the distant future, which might be possible given the lack of freehold properties near an MRT station.

sixth avenue mrt

In the meantime, M’s in-laws are renovating their house. Once it’s ready in 2023, they’ll move there instead; after that, RoyalGreen can start generating rental income.

M notes that “So many stars had to align for the two properties to come trueto review so many properties, deal with multiple banks and coincidentally happen at the RoyalGreen fire sale. In the end, M credits sharing home buying ideas with the right people – otherwise she would have been left with only her original plan to pay off a single three-bed EC.

For more buyer journeys or in-depth reviews of new and resale condos, follow us on Stacked. We will help you make the most informed decisions for the Singapore private real estate market.