Upgrading to a bigger home is a common decision that many families make. As our families become bigger, we look for larger homes to cater for more members.
For most of us common folks without massive budgets, upgrading typically comes in the form of selling our 3 or 4-room HDB flat, and buying a 5-room flat.
By just looking at resale statistics published by HDB, and comparing them to the prices of new Build-To-Order (BTO) flats, we may wrongly conclude that upgrading isn’t expensive.
For example, a homeowner of a 4-room flat in Tampines may find out that median resale price of 4-room flat in Tampines is $428,000 as at 3Q2016. He checks out the prices of new BTO flats in Tampines during the August 2016 BTO launch and discover that the price range of new 5-room flats are between $398,000 to $501,000 (average price; $450,000).
The homeowner may think he is only paying about $22,000 more to upgrade to a 5-room flat. His calculations are, unfortunately, not correct.
Beware Of Hidden Costs When You Upgrade
There are many costs that you have to consider beyond just the purchase and sales price of flats when it comes to upgrading. This video explains 4 hidden costs that upgrading a HDB flat involves:
Note: Calculations are based on the Tampines flat mentioned above.
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