Getting your first property and not sure how many rooms you want to spring for? Check out this handy guide that will help you decide how much space you really need!
Finding the perfect balance between price and space
Here are HDB’s specifications of 3, 4 and 5 room flats, as well as their average resale prices:
Floor space (sq m)
Average resale price
If budget permits, most young couples tend to opt for 4 room and 5 room flats, considering that 3 room flats are a lot smaller. First and foremost, you should obviously be thinking about how much you’re earning and what kind of flat you can afford.
If you’re thinking of getting a BTO, use this calculator to find the maximum HDB housing loan that you’re eligible for, depending on your income. Then use this calculator to figure out your estimated monthly instalments using your loan amount. It’s important not to overstretch yourself – and always make sure you’ve got rainy day savings that you can draw on in case of an emergency.
Also for couples who are getting a BTO flat – you’ll be eligible for the Special CPF Housing Grant if you’re first-timer applicants applying for a 3 or 4 room flat, and you have a combined income of less than $8,500. Depending on which income bracket you’re in, you could potentially get up to $40,000 in grant money, which will help to offset your down payment.
Key considerations before you buy
If you’re leaning towards getting a resale flat, do keep in mind that BTOs in the 1990s had, on average, 10 percent more floor space than BTOs from 2000 onwards. What does this mean? Well, with a resale flat, you might be able to get a flat with less bedrooms, but still effectively have roughly the same space.
Another thing that you should keep in mind is whether you want to have kids soon, or if your parents are likely to require assistance and move in in the future, as both situations will mean that you’ll need to allocate some space to them.
The alternative is to upgrade, but it isn’t quite as simple as just selling and re-purchasing in the event that your family suddenly expands. Firstly, there’s your Minimum Occupancy Period (MOP) of 5 years, during which you’re not allowed to sell your flat or buy any new residential properties (be it private or public).
Secondly, if you sell your flat and buy a second BTO, you’ll have to pay a resale levy – that’s $40,000 if you’re selling a 4 room flat, and $45,000 if you’re selling a 5 room flat. Bottomline? You’ll be stuck with your first property for quite a number of years, so be sure to plan carefully and consider what’s likely to happen in the near horizon.
Lastly, do think about your lifestyle and how this will impact the amount of space you need. If you have family living abroad and you’d like to have a spare room handy for them when they visit, that means that you’ll need more space. If you work from home or operate your own home-based business, you’ll probably need a separate workspace as well.
Also make sure you make the distinction between must-haves and good-to-haves. Continuing from the previous example, for those who work from home, having a separate study is likely to be a must-have. Wanting more space for a walk-in closet, however? That’s a good-to-have. Similarly, your balcony and larger living room space that you’ll get when you choose a 5 room over a 4 room flat is likely to be a good-to-have – so these shouldn’t be key factors in your decision-making process unless you have more than enough money to finance your purchase.
Your purchase decision is a significant one that will continue to impact you for a few decades to come, so do take the time to do more research and weighs the pros and cons. Be sure to commit to something that you can afford right now (and if that’s a BTO, you can get started here).