Asked by Anonymous
Asked on 19 Feb 2019
We don’t know when and how many children we will have in future and definitely not living under one roof with in-laws, so is 5-room HDB too much or stick with 4-room first and upgrade later? We are regular white-collars out there, meaning most of the time spent in our house will be during after/before work and weekends. Renting to strangers won’t be considered at all and we don’t want to end up underutilize other rooms as well. Anyone can advice?
Top Contributor (Jun)
Congratulations for getting new house😃
Some opinions and suggestions below :
4 rooms HDB as the size different lies within the bigger living room space. So whether you have 2 kids or 4 kids, makes no different since the number of bedroom remains at 3 (be it 4 or 5 room HDB) ( where parents take 1 and kids takes the other 1 or 2 room alone or share). Unless older 5 room HDB, then it might possible to have 4 bedrooms.
On the other hand, other factors to consider too:
Not only price of 5 cost more than 4, any extra ongoing monthly maintanance cost and annual property tax is also higher for 5 than 4. Over long terms it also adds to quite a sum.
The annual incentives such as those packages announce with Budget such as GST voucher, S&CC rebate is more for 4 than 5 rooms HDB. Thus quite a substantial savings on going to keep cost low monthly.
Though only smaller living room space, the extra maintenance is also an effort monthly for as long as you own them.
(C) Selling demands
In the future, if you're thinking of selling to upgrade , 4 rooms demand is always more than 5 rooms due to smaller family nucleus and lower cost.
Finally , if you're looking at BTO over resell , the space BTO 4 vs 5 could make a big difference. As much as possible , find out the total size and go to a similar flat layout of your friends to take a look and get a feel of the size to choose the most comfortable size.
I would say stick to what you can afford, without compromising on your quality of life. If getting a 5-room flat means having to forgo a certain level of comfortability in your life, you might want to reconsider it :) Also, if i'm not wrong, you'll get more CPF grants if you get a 4-room flat and below!
Top Contributor (Jun)
You should look at affordability first. Rule of thumb is to not have your home price be more than 7 X your combined annual income.
If together you two make 100k a year, your house shouldn't cost more than 700k.
Now that you have a budget, you may still be able to find a 5 room flat within that budget, then it becomes a preference.
Plus, MOP is only 5 years anyway, you can always get a smaller house first, hve better cashflow, grow your wealth and then consider having more than 1 or 2 kids.
Hi Anonymous, not overspending on your house makes sense.
"so is 5-room HDB too much or stick with 4-room first and upgrade later?"
I think upgrading is a common theme these days. Just like job changing. People move to be nearer to schools. People move to cash in on their property. These are some factors you will hear especially at a slightly later stage in your life.
And I've this video to share with you to address this question directly. The topic is "Should I buy a $750k Mansionette"
You need to consider if you want to be having kids. A 4 room hdb would be ideal for 2 kids and 5 room for 3 kids. If you want to use 1 of the room for other purposes, then it's just 1 or 2 kids.
Next thing is decide whether you want BTO or Resale. Assuming your parents also stay in HDB, and you will need your parents help in taking care of your kids, then buying resale should be considered as well.
The benefits of buying BTO is because of the appreciation opportunity after MOP. However, I personally feel that you can still be making money later on in your life. If you plan to have kids, resale has lots of grants, making your resale flat cost as much as a BTO, while older flats have bigger floor area as well.
A hdb needs to be occupied at least 5 years, if you have 2 or more kids you may need to make do with the current space in your home which can be very inconvenient until you are allowed to upgrade.
Also as mentioned are the other factors such as maintaining the home in terms of cleaning. I have come across couples that own a home, and they do not clean certain areas of their home at all because it is a hassle, such as only using 1 toilet while having 2, so they don't have to wash both, or cleaning the balcony, if you have one. You can mop the whole floor area of a 3 room flat in 10-15mins, compared to maybe 25 mins for a 5 room flat. Add the time to vacuum, maybe wiping dust off your tables and cupboards, the effort and time needed increases exponentially.
A bigger house requires more money as well, in terms of property price itself, property tax, usually uses more electricity, higher S&CC charges, more furniture, appliances and renovation required. Owners of 5 room flats also have less benefits such as lower amounts in GST vouchers etc.
I personally feel that 4 rooms are the best deal. The idea of buy terms invest the rest applies here as well. Spend less money on your residential home so that you can afford investment properties later.
it depends if you are getting a new bto flat direct from hdb or resale flat from open market.
New bto flat vs Resale flat
New bto flat are generally priced in such a way lower price than resale flat.
example: 4A hdb range $300K-$400K depends which location and demand of the new bto areas.
4A resale hdb can be asking $400K - $500K again depends by area.
if your budget is ok for new bto flat
I recommend go for 5room hdb instead of 4room hdb, since hdb is helping young Singaporean to own flats.
few factors to start here.
New bto flats are smaller nowadays.
5 years later can consider upgrading further to EC.
If you cannot wait for new bto flats, then go for resale open market hdb flats, then just go accordingly to your affordability and lifestyle.
All the best :)
I think it helps to have a rough timeline of what both of you want to achieve. E.g. House done by which year, wanna have first kid by which year, wanna have second kid by which year.
Then you can see if it makes sense to have a 5rm right away or start w a 4rm first and move some years later.