• Joshua Loo

Review: 3 Bedroom Unit at The Vales

This is a review of a 3 Bedroom Unit at The Vales that is currently marketed by one of my colleagues. This is to provide potential buyers with a more in-depth view of the property and have all the details needed to make a well-informed decision. Should you require more information, feel free to write to estatemagnates@gmail.com or contact Joshua Loo at +6596329840! I will link you up to the seller agent!




Interested in buying an EC but can’t wait for the TOP date?


The Vales is an Executive Condominium (EC) that TOP in 2017, and this makes for a great option for young couples looking to start a family! Rarely will you be able to find a suitable EC in the open market.


Advantages


Floor Plan & Site Plan



The 915sqft, 3 Bedroom unit does not have any east-west sun, as all windows are facing towards the north. From the site plan, this unit for sale has what can be considered the best stack as it is away from the major roads like Anchorvale Street and Sengkang East Road.


Interiors



The current owners have tastefully-done up the interiors for the living/dining room and bedroom 3. Overall, the condo unit is mostly original and in excellent condition.


Living/Dining Room



Cove lighting is done in the entirety of the living and dining room to take advantage of the ceiling height. Besides, this helps to provide diffused illumination which softens and warm the interior space.


This adds a balance to the modern contemporary look, which can be cold and inviting at a glance without the cove lighting.


Drawing inspiration from Chinese styled architecture, a decorative feature wall is installed in the dining area as an interesting element.


The living area has a wooden feature wall for the Living Room which adds extra texture to the interiors and perfectly complements the cool marble flooring.




Balcony View



The unit is completely unblocked by any developments, and I’ll elaborate more on this in the later points. Ziptrak blinds are also installed to protect the occupants from the outside elements.



Bath 2



Bedroom 3



Bedroom 2



Kitchen



Master Bedroom



Master Plan



North of The Vales is currently undeveloped land, which land use is for an educational institution. This makes the unit windy throughout the day as air can flow freely throughout.


The Vales is surrounded by plenty of educational institutions within a 2km radius for parents to pick from.


Rental Potential


ECs will usually possess some of the best rental yields post MOP once the whole unit can be rented out. Past rental transactions are currently averaging around $2,700/month.


Located just directly opposite SengKang General Hospital, this location should bring in a sizable quantity of interested tenants.


Capital appreciation


Gone are the heydays of ludicrous capital appreciation of more than 40% for ECs. In recent times, we are closer towards 20% and that is still a very attractive growth in today’s real estate context.





The reason why prices of ECs are so attractive is due to the heavy subsidies given by the government on land prices. Coupled with CPF housing grants, this makes ECs a good purchase for young working professionals.


This explains the rapid capital appreciation as limiters such as the post Minimum Occupation Period (MOP) or full privatization (10 years) are over, the development will be priced accordingly to the private residential market as foreigners can purchase it.


If you need more information for ECs, you can read my article on Understanding Executive Condominiums in Singapore.


Low Supply in D19



Homebuyers seldom think of the selling potential of their homes when they first purchase them. This makes selling the property rather difficult, should the property be not an easily sold unit.


Part of what makes this 3 Bedroom unit at The Vales so attractive is its current low supply within the D19 area. The above picture was extracted from Property Guru’s analysis of the top 5 districts based on the Market Supply Gap and where property agents should direct their efforts for the best transaction opportunities.


Although the demand is not as high as compared to other condo types, this 3 Bedroom unit has a very low supply in the market. This is should be obvious to you if you have been looking for a unit in the area.



Appeal to Upgraders from HDB


If you are currently living in a 3 Room HDB flat, this point will be relevant to you and for your future buyers when/if you are intending to sell the condo. Some assumptions on my part here will be made.


  • Husband and Wife in their early-mid 30s

  • Currently living within D19 and have stayed in 4-Room HDB flat since TOP (2015)

  • 2 children, maybe expecting a third child

  • Looking for a lifestyle change and good investment at the same time

  • Gross household income approximately $10k/month

  • Took an HDB Loan, paying 10% in CPF.




*The following advice is a generalization and might not be specific to your scenario. Please contact me if you require any assistance.

The data above reflects the approximate average price of 4-Room & 3-Room HDB flats that had recently reached their Minimum Occupation Period (2020-ish) The current average transacted price in 2021 is $485,806 (4-Room) and $372,615 (3-Room).


In the following example, we will reference in terms of the 4-Room pricing here.


Based on BTO prices that I’ve retrieved here, you will have gained an approximate $170k in capital gains. I hope you didn’t spend much on renovation costs, as here is where things get even more interesting.


The estimated refund back to your CPF accounts will be around $36k with interest.


Considering that for the past 10 years you have been working, there will be approximately a contribution of $1.15k/month in your CPF OA for both individuals. Add this sum up and the total CPF OA contribution will be $276k.


Price of 3 Bedroom Unit at The Vales


The asking price of this unit is a negotiable $1 million. You will have to take a bank loan as stipulated for all EC purchases, which means an estimated 25% downpayment ($250k) for your first property count.


Of this downpayment, 5% ($50k) will be needed to be paid in cash. This should be manageable after the sale of your HDB, which will net you an approximate $170k, even without touching your savings.


Without further going into minutiae, cash proceeds from the sale of your HDB can cover your 5% downpayment, and the remainder 20% can be covered by your CPF OA with balance remaining.


Both individuals are within the Mortgage Servicing Ratio, which makes for a combined monthly instalment of ~$3k per month. The cash proceeds from your HDB sale, after paying for the 5% downpayment, should be able to cover the monthly instalment for around 3.5 years.


This should be the minimum requirements for any interested buyers, which should be possible for most working professionals. However, take note that you have previously taken CPF housing grants, you will not be eligible for more grants on this purchase.


Disadvantages


EC Eligibility

Similar to purchasing an EC directly from the developer, purchasing from the open market requires the prospective buyer to fulfil similar conditions.


Family nucleus

You will need to qualify for the EC under one of these eligibility schemes:

  • Public Scheme

  • Fiancé/Fiancée Scheme

  • Orphans Scheme

  • Joint Singles Scheme


Citizenship

  • You must be a Singapore Citizen

  • At least 1 other applicant must be a Singapore Citizen or Singapore Permanent Resident

  • All singles must be Singapore Citizens if applying under the Joint Singles Scheme


Age

  • At least 21 years old

  • At least 35 years old, if applying under the Joint Singles Scheme


Income ceiling

  • Your household income must not exceed $16,000 income ceiling.


Property ownership

  • You do not own other property overseas or locally, or have not disposed of any within the last 30 months

  • You have not bought a new HDB/ DBSS flat or EC, or received a CPF Housing Grant before; or, have only bought 1 of these properties/ received 1 CPF Housing Grant thus far.


Also, unlike EC units that are bought directly from developers, buying and EC from the open market will require you to make an upfront payment of Additional Buyer Stamp Duty (ABSD), which will be refunded when the first residential property is sold within 6 months after the date of purchase of the second property.


Are you keen on finding out if The Vales is an ideal investment for your specific financial circumstance? Contact me at +65 96329840 or send your queries to estatemagnates@gmail.com! Our consultations do not have a charge, so let us assist you!


The views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee, or other group or individual. The author does not accept any responsibility whatsoever for any harm or loss arising from accessing or relying on information contained in this blog post.

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