Sunday, March 8, 2015

Aim for HDB - 150K CPF + CASH!

Hi Everyone!

In a recent event, after having discussion with my girlfriend with regards to purchasing an HDB flat, we have face problems with our limited amount of savings that we have. I understand that many people would have mention about going for BTO and with the government grant and HDB loans, it should be affordable for young couples to purchase. However, this is the part where we face the problem, due to certain circumstances, we are unable to go for that as we are not eligible for this options (Not even new flats) because of the investment in private property (Not going to go into that detail). 

We still have around 4 years to get to the target and we do a simple calculation of saving 1k per month (excluding bonus, AWS and salary adjustment), I would have 48K of cash saving. For CPF I would have 40K to 45K which gives me around 90k of available funds to pay for the down payment. As my target would be 150K for the housing down payment, it would be a far far target for me to achieve. On top of that, I did not include the cash that I have used for investment as that portion of the money is my very final line since I hope to generate passive income for the future. However, if necessary, I will take it out from my investment and build it after everything is stable.

For me, I see this as a challenge to aim for this target. So what about my girlfriend? why not include in for the contribution? Yes, certainly I can factor her saving into the payment as well, but I want to try it out myself so that I can use her as a backup after we pay for our HDB. So that we won't be cash tight after we pay for the down payment.

In any case where I am unable to achieve that goal, there are a few options that we are looking at. The first option is to delay one more year, this will enable me or us to earn more money to hit that target. Second option is to change location, find a cheaper HDB in other location - maybe 400K or if lucky we might find a 390K HDB flat. Last option is to lose the investment money by selling the condo off so that we can get the new sale flat from HDB and no need to pay for the 7% stamp duty (which cost $31.5k for a 450K HDB).

Personally the last option is really a bad option because it is the investment project, it will not be great to make a loss for investment. If you have any opinion or suggestion, do comment it. I really appreciate it :D 


  1. Hi JYKL,

    How can you buy a HDB after already owning a private property?

    1. we intent to sell it after we got hdb. One of the clause is that we have to sell off the property within 6 months after we got the flat.

    2. Yes, I was wondering about that! Anyway, all the best James!

  2. Hi James, I'm pretty confused. If you have a condo already, Why not just use it for residential purposes? And if you are really interested in HDB, Why not sell the condo? And guessing you are 27yo this year, trying to aim for 2 properties (HDB and Condo) is quite tough on your finances isn't it?

  3. We intent to sell it after the condo had build finish. We going to stay there for a year and when it reaches the 5th year we can sell it without any penalty. so before selling it, we hope to purchase HDB so that we will have a place to stay :D

  4. Hi James, believe we are in a similar situation where we currently own a private property but intend to sell it after SSD ceases. Many things to consider on the best option moving forward and would like to understand your thought process behind this decision to get a resale flat after 5 years.
    1. Did you consider waiting out for 30 months after sale of the condo to get a subsidized bto?
    2. There will be a 3 percent buyers stamp duty involved. Suppose you accounted for that already?

    1. Hi Jerome,

      Just a quick background, my gf bought this condo for investment purpose. So in order not to lose any money, she will need to sell her condo after 5 years in order not to incurred any penalty. So we will be staying at her condo for one year or two, depending whether we have enough money for HDB.

      so answering your first question, we wont be going for that option because 30 months will be too long and we do not wish to stay at our parent house as we want to be independent. (setting up our own house instead of relying on parents) So we will go the alternative option which is to sell the condo 6 months after we got our HDB.

      for question two, because of question one answer, we will need to pay a total of 10% stamp duty (3% buyer stamp - standard + 7% for holding second property). We will get back the 7% after we sold the condo. And these expense had already been included in the calculation.

  5. Thanks for your reply. I have the intention to do likewise. Have you considered in a worst case scenario that selling price for the private condo is lower than purchase price. Would you still sell it irregardless and follow your plan?

    Also, you will still eligible for subsidies should you choose to get a bto some time down the road. Is a bto sth you would consider in the future?