Asked by Anonymous

Both my girlfriend and I are earning about mid $3000 a month. Would it be a stretch to go for an EA or EC? Or should we stick to a BTO, then upgrade later?

Just wondering if I should just BTO for a 4/5 room flat first then invest my money

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    • Nicholas Woon
      Nicholas Woon, Marketing Director at ERA Realty Network Pte Ltd
      19 Answers, 42 Upvotes
      Answered on 25 Sep 2018


      Short Answer

      I would recommend you to stick to BTO and upgrade later!

      Long Answer

      EA Affordability (I assume you're referring to resale EA)

      from $4xxK at Jurong West/Pasir Ris

      Executive flats cost an average of $6xxK in Singapore

      Assuming you are both earning about $3500 and age 25-30 with no outstanding loan,

      HDB Loan: Max loan of $419,000 (90% of property price) which translates to a property price of $465,000 if you are taking 90% loan and 10% CPF/Cash.

      Bank Loan: Max loan of $419,000 (75% of property price) which translates to a property price of $558,000 if you are taking 75% loan, 20% CPF and 5% Cash.

      I assume you would use the CPF Housing Grant to offset/partially pay the CPF portion in the payment. (ie. $40,000 CPF Housing Grant for both Singapore Citizens for 5 room and bigger HDB resale)

      From this calculation, EA is a viable option if you are comfortable with the locations which are further away from the city. However, you would need to prepare more cash savings or CPF OA if you intend to purchase an average EA that cost more than $600K.

      EC Affordability

      There is no outstanding new ECs in the market and the next launch would be next year in Sumang (Punggol). For the past 2 launches, there are no 2 Bedrooms so the most affordable option is a 3 Bedroom unit.

      The lowest price unit from the last launch (Rivercove Residences in Sengkang) was $830,000. Rivercove land bid price was $355psf while the next EC launch's (Sumang Walk/Punggol) land bid price was $583psf.

      We would expect this EC price of a 3 Bedroom to be at least $9xxK.

      (You can only apply for bank loan for EC)

      Bank Loan: $467,000 (75% of property price) which translates to a property price of $622,000 if you're taking 75% loan, 20% CPF OA & 5% Cash. You would be eligible for $30,000 CPF housing grant if both you and your partner are both Singapore Citizens and I assume you would use it to partially pay the 20% CPF portion.

      From the above calculation, I would not advise you to go for an EC as you would need a combined cash/CPF OA savings of more than $400K (ie. $9xxK - $467,000 - $30,000).

      As a rule of thumb, usually we advise couples with more than combined monthly income of $8000 to consider for EC unless you have cash savings or financial support from your parents.


      Hence, I would suggest going for BTO first before upgrading! Hope I provided a clear explanation! :)

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    • Kenichi Xi
      Kenichi Xi, nᴉʍ oʇ dǝnᴉʇsǝd 不能说的秘密 at Tag Team with Gabriel Tham
      149 Answers, 329 Upvotes
      Updated on 25 Sep 2018

      you should utilise the fact that your combined salary allows you to buy BTO.

      as u progress with higher salary you might not have a choice to buy BTO.

      BTO are alot cheaper and less captial upfront bcos you can utitlise ur cpf. i wun go deep into the numbers but this is usually the key decision factor.

      you also get to choose between HDB Loan or Bank Loan. EC only allows bank loan.

      the management fee for EC will be way higher then HDB maintenace fee.

      the only attaction point in EC is they have condo facilities tt u share w everyone and 10 years later u can sell it as a pte ppty with hearsay tt u sure can sell at a price higher then BTO.

      but bear in mind sales does not equate to profit margin.

      u will be surprise how much u can save over the 10 yrs with BTO and if u sell it like ur EC planning the profit margin will be way higher.

      Hope my reply helps.

      If you feel this reply have Quality, please upvote and check other Quality Reply.

      Thank you.

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    Gabriel Tham
    Gabriel Tham, Tag Team Member at Kenichi Tag Team

    Top Contributor (Dec)

    392 Answers, 707 Upvotes
    26 Sep 2018

    I think is better to BTO HDB first. Make full use of all subsidies from govt and get a BTO. After that you can either sell or upgrade

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