A LGBT <35yo/7-10K Salary asked whether to Rent/wait for HDB/Buy Resale EC

[HendryTan]

1. Saw the above question asked at stackedhomes. Share their advice and answers here.  Good considerations for everyone too.

 

2. We are NOT affiliated with stackedhomes.

 

https://stackedhomes.com/editorial/im-an-lgbt-person-under-35-with-an-income-between-7k-to-10k-should-i-rent-while-waiting-for-hdb-or-buy-a-resale-ec/

 

I came across the article you had written for a couple contemplating to upgrade to a condo from their current 4BR flat. It was helpful to see the chart where you compared purchasing a property at a lower price with higher interest rate as opposed to purchasing a property at a higher price with lower interest rate.

I am a (not so) young Singaporean with some limitations and unique circumstances which I have been finding it hard to find good / much advice on the web. One of my friends suggested that I write in to StackedHomes and here I am!

Any advice would be much appreciated! 

Would also highly appreciate it if this enquiry can be kept anonymous as much as possible 

Situation:

– LGBT person

– Under 35

– Living with homophobic parents

– Foreign partner migrating to Singapore in June (one year before I turn 35)

When my partner comes, we will have a ‘housing issue’.

I am the sole breadwinner in our relationship.

Current CPF + Cash = $150,000

Income: $7 – $10K

Despite the limiting circumstances, we still very much hope to make a good housing purchase for the long term.

This is the first time I am looking into purchasing a house, I would greatly appreciate it if you would be able to point out some of the things that inexperienced / first time buyers tend to overlook, that we would need to consider when purchasing our first (and hopefully last) property.

We hope to be able to live in a 2-3 bedroom flat that is around 10 years old.

I am looking at areas convenient to get to town, e.g. few stops from Dhoby Ghaut/ Bugis, or in the East. We try to avoid Yishun (though there seems to be some affordable ECs in the area).

Option 1:

Buy resale EC now, would really love to get one in Tampines but they look way over a million, so maybe would consider the cheapest available ECs.

EC budget: $1,000,000 (downpayment = $250,000, short of $100,000 currently) – are there any other legal avenues for loans out of the 75% that we can borrow from the banks?

Other costs to consider: Monthly maintenance of $400

Is it generally true that ECs tend to peak at 8 years and will they appreciate even more after turning private after 10 years? Would this be sort of a good short-term investment decision where we stay in the EC for 2-3 years and then sell (at its 8th year/ 10th year) to purchase a resale HDB after? To ease the financial burden of maintenance costs and also perhaps move to a location of higher preference.

Investment is not the main motivation, but rather maximizing what we have within our current circumstance for a comfortable home.

Would the transactional costs of selling this place and the trouble of shifting house end up not saving us any money but instead becoming a whole load of trouble?

Option 2:

Rent first and wait one more year to purchase a resale 3 BR flat?

Rental budget/ month: $3000 x 12 months = Pay $36,000 till I turn 35 and am eligible to purchase a HDB

Dream home:

I am currently looking at a 3 BR flat in Bishan, and it currently costs about 1 million as well.

Based on CNA’s January report (HDB resale flat prices up 10.3% in 2022), it is more than likely that this 1 million property would also increase by around 10% or more when I turn 35, is this right?

(P.S. We have considered staying with parents/ spending less on rental by living in single room/ co-share spaces, but do not see them as viable solutions due to personal reasons. We are also not considering BTO due to the limitation on space and urgency of moving in together.)

Comparing the above 2 options, which one would make more sense in the near 3-5 years outlook?

Please let me know if this is the right avenue to be making this enquiry, and if there is a more appropriate one for reaching out to.

Thank you!

Cheers.

--------------------

Go to above link to see their advice.

[kratos]

The author failed to factor in a few important points:

• Renovation costs
• Sole breadwinner, is the partner going to find a job when he gets here? How about his parents, any monthly contribution?
• Emergency cash, How much emergency cash he has? (in case he loses his job due to recession especially since he is the sole bread winner)

Edited April 9, 2023 by kratos

[And then]

Seems like a heavy commitment for that income

[Guest Confused]

Just get a house within your means, no point staying in your dreamhouse when everyday have to rake your brains over paying the debts/loans and affecting mental health.

[Guest guest]

Salary of 7-10k seems like not low, like should be able to afford a private. But for me i would get a resale HDB and lower my expectation of getting those 1 mill hdb. Those 1 mill hdb overpriced.

[Guest guest]

I won't commit to a property if I couldn't afford the down payment and have some spare cash. I would get one within my means first then upgrade in the future.

 

If I were you, I would rent first and at the same time look for a HDB flat to buy. Flats near MRT station will cost more but can retain the value better. You will also save on maintenance fee.

[lonelyglobe]

14 hours ago, kratos said:

The author failed to factor in a few important points:

• Renovation costs
• Sole breadwinner, is the partner going to find a job when he gets here? How about his parents, any monthly contribution?
• Emergency cash, How much emergency cash he has? (in case he loses his job due to recession especially since he is the sole bread winner)

I got distracted by the sole breadwinner part,  if he is migrating to SG,  don't need to have a job? 7k for a single would be quite comfortable but for couple can be a bit stretching. 

[Guest guest]

Just get the 2 room flexi BTO. Can pay up everything and worry less. Living near the city is overrated when your neighbouring mall and kopitiam are good enough.

[cityhallguy]

There are still quite a few unknown factors he has to consider and some have been mentioned by others above;

 

• Is the partner gonna be a co-house owner with him as 2 singles buy options?
• has he factor in how much the money he gonna loan and pay for the bank or HDB loan?
• what if he lost his job due to retrenchment or accident injuries, does he has a backup plan?
• how much is he willing to set aside for home utilities and other relevant housing expenses? 
  

I also used to earn that much and prefer debt-free. Coincidentally, I stopped working and moved to NZ, so my income match the single BTO-2 rooms flat incomes eligibility, so I able to used my CPF to pay off totally and my Reno is only $11k which I can pay off by cash. Now living at my partner house, and have my work life balance, just that I have to cut down the way I used to spend 😂 but is okay.

[Guest guest]

19 hours ago, Guest guest said:

Just get the 2 room flexi BTO. Can pay up everything and worry less. Living near the city is overrated when your neighbouring mall and kopitiam are good enough.

Getting a 2 rm BTO needs to wait many years even though can pay up everything. Also the flat is a bit too small for 2 pax, as it has only 1 bedrm.

 

I think stay which location is important only if you stay near your workplace and the frequent hangout places that you go. So not necessary must stay near the city. Example, if you work in Jurong, i do not think staying near the city is convenience.

[Guest Guest]

19 hours ago, Guest guest said:

Just get the 2 room flexi BTO. Can pay up everything and worry less. Living near the city is overrated when your neighbouring mall and kopitiam are good enough.

Get the 2 room BTO must see your luck. Some people want to buy but no luck in getting a queue number or good queue number to select the flat. I find the demand for 2 room BTO still quite strong, esp for those sites near to MRT.

[sg89ailikesi]

I am also 34 this yr. Was looking at resale ec since 2 years back. Yes it is over price for now (all properties). If your choice is also 1M hdb then I think u can get resale ec now, this you can save the 36k of rental.

 

but suggestion is still don’t stretch yourself, I believe the million dollar with how much u have on hand is over stretched. 
 

myself, I have abt 300k (cash and Cpf) but I think I am waiting for next yr to get resale 4-5room hdb. Location in the north since I stay in the north and use to it and like u said it will be cheaper.

 

and do budget reno cost too which is not cheap nowadays.