Updated: Jan 12
So Many Options Out There But Which One Suits Young Couples?
Recently I have been serving some buyers who consist of those who got married recently or gonna get married soon. They always have one question in mind: what should be the best property for them to start their new chapter? which property they should choose to build their love nest?
What are the possible options and their pros & cons?
There are 4 possible options for newly wed couple which are to go for BTO, resale HDB, resale condo, Executive Condominium or private condo (either new launch or newly TOP ones).
Choosing the right property can give young couple strong headstart to own multiple properties in the future.
Lets explore the pros and cons for each possible option:
Option 1: BTO?
Surely there are friends or relative give the advice that young couples should apply for BTO from HDB directly as matrimonial home. The reason they give would be it is every couple's entitlement to apply for BTO. BTO these days are not cheap even though is subsidized, therefore owners may earn substantial but limited profit when they decided to sell upon meeting MOP requirements. However, those BTO at better location may fetch better profit upon selling.
The waiting time for BTO to be ready to move in will be close to 3 to 4 years. With the covid situation causing shortage of manpower, the date to collect keys is pushed back even further. Hence in the meantime the young couple will need to find an
alternative place to stay while waiting for BTO to be ready. Couple may need to push back family planning if the alternative place is not big and comfortable enough to have babies.
Option 2: Resale HDB / Resale Condo?
If young couples prefer to start their married life in their own home, then they can explore resale hdb or resale private condominium. This will very large depend on young couples' cash flow and savings. Both resale hdb and resale private condominium completion takes about 3 to 4 months, so it is a shorter time frame as compared to BTO purchase.
Good thing about purchasing resale property is that couples can experience the surrounding better, know who are the neighbours, can use compass to understand the orientation, feel the breeze etc during the physical viewings. Couples can even interact with the resale owners to understand about the amenities nearby. Therefore, couples can make a wise decision based on what they observe.
If lifestyle is something that young couples wish to consider, resale condo is not a bad option provided the price is within the budget. Young couple will love to enjoy the condo facilities at the doorstep such as swimming pool, gym, function room, music room, games room, jacuzzi, tennis court etc.
Option 3: Executive Condominium?
If young couples would like to have upgraded condo lifestyle but the price of resale condo is not within budget, they can choose to purchase Executive Condominium (EC) which is more affordable than private condominium. Executive Condominium is subsidised condominium administered by HDB but is built by private developer. Singaporean young married couples with household income less than $16000 a month can apply for EC. It will be a good choice. However, the waiting time for it to build is around 3 to 4 years.
EC is said only for the privileged ones due to various restrictions imposed by HDB. So those who managed to apply for EC successfully can enjoy the capital appreciation when the owners decided to sell upon fulfilling MOP requirements. Do take note that if the next housing choice is BTO / EC again, there is a need to pay resale levy.
Option 3: New Launch or Newly TOP Condo?
If budget is not an issue, young couples can look into getting a new private property that going to T.O.P soon so that they can move into a brand new unit without the need to wait for the construction period. The downside is the couples would need to pay for higher price as they have skipped the waiting period for it to be constructed and the developer has increased the price for a few rounds. Time is money. It is either waiting for the new launch to be constructed in 3 to 4 years or pay higher price to move in immediately.
If the young couples do not mind waiting for the new launch to be T.O.P in few years time, they will be at the same starting line as other owners in purchasing the units with VVIP discounts. When they decided to sell in the future, the sales cash proceed can be quite substantial.
Now young couples know that they have four main types of properties in Singapore to choose from. Based on their preferences and needs, young couples should weigh the pros and cons in choosing any particular property. Finance and affordability also play very important part in deciding which to choose as their matrimonial home.
Wish to buy your 1st matrimonial home but still not sure how to do financial calculation?
If you have a plan in mind but not sure if it works well – do share with me or let me know.
I will do my best to assist you to make sure you look at your plan from multiple angles and ensure you have a very clear picture on what’s going on.
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JJ Wong is the founder of MOPUpgraders.sg and has been a Property Wealth Planner in the real estate market for the past 6 years. He has helped many clients achieve their aspirations with the right financial planning and sound timeline planning. He is the man behind upgrading case studies of those who are holding on property under 10 years.