SG Budget Babe
Asked on 03 Dec 2019
What are the options available to us at the moment?
Housing in Singapore is relatively pricey, so you need to consider a few things:
HDB are well within reach, but if you don't plan to have children, you might just need a 3 room instead of a 4 or 5
If you can pay off a house quickly, that will allow you to focus on achieving other financial goals, such as retirement
I would recommend not spending more than 30% of your income (gross) on mortgage, so that works out to be $3.6K/mth (CPF/cash).Of course, the lesser the better, and if you can pay off your housing debt fast, it is also better.
If you are paying with OA monies, take note that OA contributions drop over time with increasing age, so you might suddenly find yourself paying more cash in future.
Go with one that you're comfortable with - if you're ok with a HDB (BTO/Resale) then I would suggest you go for it and potentially repay your mortgage loan using cash. Remember to seize the various grants from government that you're eligible for, the money goes into your cpf so it's free from them.
That's what I'm currently doing and have been doing as my aspiration is to build my core around retirement savings through CPF. Of course, if you would like a more luxury style of living, then housing options like a private condo is feasible as well, given your combined income.
From the perspective of financial expenses, hdb will be the cheapest option and the most affordable.
Couple earning 12k are now eligibile for hdb
Build To Order flat if you can wait to move out in a few years. Sale of Balance or Resale flat if you cannot wait to move out. New Executice Condo if you like to have condo facilities and can wait for a few years.
But stay away from resale Executive Condo and new or resale Private Condo because the prices are too high relative to your combined monthly income.
If you can afford to wait, first property should be a bto due to the subsidised rates and grants available. Finish the mop and upgrade to an EC after that.
A few factors that we would need to know from OP before we can make an informed recommendation:
how old are you (and your partner) and when are you guys intending to get married
what is your opinion of this house purchase (to stay forever or to "flip" when there is opportunity)
are you intending to have children and how many
Assuming that you're a young couple and intend to get married only in 3-4 years' time, you're looking for a long-term home and have 1-2 children, my recommendation would be BTO or EC. A combined income of $12,000 still qualifies for them. These are the cheapest housing options available in the market and there are launches at least once a year for you to choose from (but it's also dependent on luck). If staying in a condo is a dream of yours because of the facilities, pick EC. If you prefer a heartland vibe, pick BTO. A 5-room flat would be sufficient for a couple to have 1-2 children. Personally think EC makes a bit more economic sense but it also depends on your view of the neighbourhood and location.
If you're a couple who are looking to get married really soon (within 2 years), the best options are HDB Resale or Condo Resale, unless you're willing to rent a place or live at either person's parents' house for 2 years (in order to go for BTO or EC option). Typically HDB resale is cheaper than a condo resale. And if the HDB you're looking at is slightly old (15-30 years old), chances of the size of the flat being relatively spacious is very high.
I would still say go for HDB unless you want large spaces!
It really depends on how much space you need, how many children you plan to have, proximity to future school etc.
This will depend on your discussion with your partner and to evaluate on a number of factors:
How long are you going to stay in the place?
Does location matter?
How much space do you need?
Affordability and long-term maintenance
The best housing option is always the one which feels like home without stress about the roof above our head. Accordingly, this will depend on the abovementioned factors.
Thereafter, decide how long you all will intend to stay in the place and if a bigger space is required, e.g. for family expansion.
Personally, I will (almost) always prefer a BTO over the other housing options. With a subsidised flat, there is room for growth in the future and it allows me to keep more liquidity for other purposes in life.
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