Unlike their married or would-be married peers, turning 35 is a huge milestone for singles because this is the age that singles are finally allowed to purchase a HDB flat.
Yet with this comes a greater question of what type of HDB flat should singles choose?
Singles are only allowed to purchase a 2-room BTO flat or resale flats of any size. In the interest of affordability, we shall only compare a 2-room BTO flat with a 3-room resale flat. We chose 3-room for the resale option as 3-room resale flats are the next most affordable and available option available on the resale market. Resale flats smaller than 3-room are rare and hard to come by in the resale market
As the only current single on the DollarsAndSense team, here are the considerations I ask myself as I question whether to choose between a 2-room BTO flat or 3-room resale flat.
Are You Prepared To Wait Until You Are Close To 40 Years Old To Move In?
Having waited more years than our married peers who were eligible to purchase a HDB flat since they were aged 21, some of us singles are already chafing at the bit to own a place of our own.
However, even assuming the best-case scenario where you successfully balloted for a 2-room BTO flat in the first HDB BTO launch after your 35th birthday, you may still have wait 3 to 4 years before you can move into your new home. For reference, the most recent HDB launch at Bishan Towers has an estimated completion of 52 months, a wait of more than 4 years.
This wait could be extended further if you need to ballot multiple times for your chance at a 2-room BTO flat. In general, 2-room flats form the smallest proportion of HDB’s BTO launches. While the August 2020 BTO launch was a bumper crop with 11 projects and 7,862 units, only 6 projects had 2-room flats available (2 projects in mature estates and 4 in non-mature estates). Thus, it is entirely possible that you will need to ballot more than once before you get the chance to purchase a 2-room BTO.
For myself, the answer is clear at this point, but this won’t be a DollarsAndSense article if we do not investigate the financial aspect of this question.
Is Lower Cost Or Space More Important?
Assuming that you are either willing to wait or somehow are able to purchase a 2-room BTO through Sale Of Balance Flats or Open Booking of Flats, the next consideration is the tussle between cost versus space.
2-room BTO flats are unmatched in terms of cost; it is hard to find another housing option cheaper than 2-room BTO flats. For the August 2020 BTO launch, a 2-room 99 lease flat would cost $216,200 for a second-floor unit of 45 sqm in the mature estate of Bishan which is one of the more expensive 2-room options.
However, they are also tiny compared to other HDB options. 2-room BTO flats are either 36 sqm and 45 sqm, with the 45 sqm layout having a small flexi space for a study area. New 3-room BTO flats are about 60 to 65 sqm, while resale 3-room flats are around the same size or even larger.
In terms of absolute costs, a 2-room BTO would be the no-brainer choice. Choosing a 2-room BTO in a non-mature estate would be even more affordable. For a single living alone, 46 sqm is perfectly liveable. In fact, it could be a perfect retirement home.
In comparison, the median price for a 3-room resale is about $293,000, almost a $100,000 difference. For mature estates, the difference can be even more stark. A 3-room resale in Bishan would cost between $300,000 to $400,000 while the 2-room BTO costs around $200,000.
However, if your life circumstances change and you want to or have to live with someone else in the future (e.g. a potential future partner or parents), a 2-room flat would offer very little flexibility whereas a 3-room flat could accommodate living arrangements with another person comfortably.
New Or Old 3-Room Resale Flat?
If you are as impatient as me and have sufficient funds to afford a 3-room resale flat, the next question is whether to choose a 3-room resale flat that is fresh out of the Minimum Occupation Period (MOP) or an older flat that is probably nearing the 50-year-old mark.
Newer resale flats tend to command a price premium due to the longer lease, wider eligibility and the chance of some capital appreciation. Older resale flats offer the benefit of more location choices which can be useful if you intend to tap on the Proximity Housing Grant.
This is more of a personal lifestyle choice. If I intend to live near my parents, I’m restricted to my parents’ housing estate and there may not be newer resale flats available. If I like city life, I may want to live in estates like Tiong Bahru or Tanjong Pagar where the resale flats tend to be older in age. Maybe all my friends are living in Sengkang and I would like to move there too.
The choice between newer and older resale flats would depend on your personal preferences. However, choosing an older resale flat because of Selective En-bloc Redevelopment Scheme (SERS) is a fallacy; the odds are highly unlikely. Instead, recognise that the odds of capital appreciation are low for an older resale flat and focus on the lifestyle aspects.
Should You Tap On Housing Grants As A Single?
Finally, as a single, you are eligible for housing grants. However, the grant amounts are not as generous as those for couples.
Instead of using your first-timer benefits to purchase your first HDB as a single, you can choose to save these benefits for your future HDB purchase with your future spouse.
Buying your first HDB is an exciting major milestone, so choose wisely. For myself, I’m looking forward to turning 35.
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