Should young couple buy a resale HDB?

Recently, I have met up with several young couples in their late twenties to early thirties as they have the intention to purchase resale HDBs. Usually, after understanding their plans and needs, I will work out the financial plans as well as an asset progression plans for them. I realised that some of the couples can have better options instead of just owning a resale HDB.

Very often, the top three reasons why young couples prefer resale HDB are:

1)      They are much more affordable.

2)      They are in better location with amenities nearby.

3)      They want to make use of the government subsidy.

These are valid reasons. However, through my sharings with the couples, many couples are keen and open to explore better options if any.

Affordability

For everyone I met who are intending to purchase a property in Singapore, I would encourage them to work out their financial plan and determine the loan they can potentially get. Once we work out the numbers, we can know very well, how much the couple can afford to buy and explore options that best fit their housing needs. Sometimes, they do have better options than purchasing a HDB. For example:

For example, a 3-bedroom executive condominium (EC) is generally about $750psf today. Once the EC is fully privatised in 10 years’ time, it can potentially price it around $950psf, considering the recent transactions of private condominiums within the vicinity. Comparing to a 3-bedroom new launch or resale private property on outside central region (OCR) on average around $1000psf, would you agree with me that owning a EC gives a greater potential in the asset?

Convenience

Convenience is usually one of the criterias when we house hunt for a property. Property at a convenient location is always price at a higher value and may not fall within the financial waistline for young working adults. That said, Singapore being a little red dot with increasingly assessible transportation such as new MRT lines, GRAB and Uber, convenience being a factor for house hunting can likely not be one of the critical criteria. Thus, if you want to select the right property, consider the right entry price and the potential of the capital appreciation it brings.  
 

Subsidies for HDB unit

As long as you are a Singaporean and have not obtained any grant from the government to purchase a HDB, you can always use it at a later stage of your life. Therefore, it is a matter of whether you want to utilise the grant now or later when you have accumulated your wealth from private property and retire at a location that is also convenient, very affordable and you are still able to obtain a very comfortable lifestyle that you desire for retirement. 

Being in the industry for more than 5 years, I know the importance of owning the right property at the start, especially if you are a first timer. This is because owning the right property from the start, will offer you a better platform to accumulate your wealth for retirement.

At the end of the day, there is no obligation to my sharing, whichever final option that the couple chooses, they can be assured that I will be with them every step of the way.