By Tan Yi Lin
Recently just received a marriage proposal or slipped a shiny ring onto your other half’s finger? Congratulations! With marriage on the cards, life looks set to be an exciting whirlwind of bridal gowns, studio photography, wedding dinner venues and other marriage preparations.
Amidst all the fanfare, the question of where you are going to live after the wedding would have probably crossed your mind. The idea of one’s first matrimonial home is an exciting and romantic notion for many newlyweds, but it is also one that raises many practical concerns about finances and the implications of owning a piece of property.
First of all, discuss with your partner whether anybody else is going to live with you in your new home. If you plan to have either set of parents move in with you, and having children is your top priority after marriage, you would have to consider buying something bigger than a studio apartment or a 3-room flat. Dan, 35, has been married for 6 years and is looking forward to becoming a dad in August this year. He shares, “My parents were living in their own HDB flat but accepted our invitation to move into our spacious 5-room flat with us while they rented out their flat. It was an arrangement that worked for both parties – my parents received additional rental income while we were assured of quality childcare.”
Is Timing an Issue?
New flats and apartments typically take about three to five years to obtain a Temporary Occupation Permit (TOP) from BCA (simply put, this means that the building is ready for occupation), before the owner is allowed to move in and occupy the unit. If you prefer to have your own place immediately after marriage, you would have to consider shopping for an existing apartment or resale flat, which could possibly cost more than buying a property that is still under construction.
Is Location an Issue?
Location is a key factor for many and this is in turn affected by other considerations such as distance from your respective offices, as well as your parents’ homes. As young newlyweds, you may not mind a long daily commute to work, or making a weekly trip across the island to visit your parents over the weekend. However, navigating different forms of public transportation or even driving over a distance with an infant (and all that baby paraphernalia) in tow may be more complicated once baby arrives. If you are planning to start a family soon after you get married, childcare arrangements will be a key consideration when shopping for your new home. It would be easier to send your children to your parents’ or in-laws’ place if they lived within the same neighbourhood, rather than stress yourself out every morning trying to rush baby to mum’s place at the other end of Singapore while battling peak hour traffic before going to work.
Why Should I Consider Public Housing?
The public housing scheme in Singapore is geared towards benefiting newlyweds and first-time home owners. Young couples can take advantage of the various CPF housing grants available to help lower their cost outlay for a new or resale flat. First-time applicants stand a higher chance of obtaining a unit in new HDB developments at a subsidy. Initial cash outlay is usually minimal as CPF savings can be used to make the down payment if you take a HDB housing loan. Applicants can also obtain an additional $10,000 grant if the unit they choose is located within 2-kilometres of their parents’ residence. First-time buyers of resale flats can enjoy a $30,000 housing grant and the abovementioned additional $10,000 grant if they qualify. Couples who have yet to solemnise their marriage can apply for a new or resale flat under the fiancé/fiancée scheme whereby you only need to submit your marriage certificate prior to collecting the keys or 3 months after you have taken possession of the flat. Says Dan, “As a young couple, we were rather tight financially when we decided to get married and applying for a HDB flat was the only affordable option we had. We considered both new and resale flats, and were lucky to have found an affordable resale flat within walking distance of my parents’ home. The $40,000 CPF housing grant was an additional bonus too. We purchased the flat, did some simple renovations and moved in a few months after we registered our marriage. ”
However, do make sure that you are eligible to apply for a new flat or purchase one on the resale market, especially if you plan to take advantage of the CPF housing grants and HDB housing loan. Conditions imposed are with respect to citizenship, income ceiling, family nucleus and existing ownership of private property or HDB flats in Singapore and/or overseas. More details can be found on the HDB website (www.hdb.gov.sg). Also, bear in mind that the bulk of new flats are generally located in less matured estates further away from the city centre, so think about the impact on your future transport arrangements especially if you need to commute daily for work. Also, be prepared to stay in your flat for at least 5 years if you are purchasing a new flat or a resale flat with the assistance of housing grants.
Should Newlyweds Buy Private Property?
Newlyweds who are unable to meet the eligibility conditions for new flats, housing grants or a HDB housing loan have two options: either purchase a HDB flat on the resale market without any grants and finance the purchase with a housing loan from the bank, or buy a private apartment or landed house.
Purchasing private property involves a considerable amount of initial cash outlay. You need to pay the initial 5% down payment in cash and the remaining 15% of the purchase price in cash and/or CPF savings. The first 20% is usually paid within 8 weeks of purchasing the option. The remaining 80% of the purchase price can be paid through a housing loan from a bank. The URA website (www.ura.gov.sg) can give you a clear idea of the recent prices and caveats lodged for private residential property.
Before you commit to any purchase, make good use of tools available such as the Housing Affordability Calculator from the CPF website (www.cpf.gov.sg) to help you estimate your housing loan based on your income and ability to service the loan. Remember to budget for other fees that have to be paid, such as stamp duty, property tax, lawyers’ fees and agent fees, which may inflate your costs considerably. The URA’s online Home Buyers Guide takes you through the steps of purchasing private property and highlights some basic checks that you should do before you even visit a showflat or view any unit. Bear in mind also the penalties imposed with regard to the housing loan and stamp duty should you wish to dispose of the unit within a few years of purchasing it.
Be Open to Flexibility
Purchasing your own property may be your largest single investment at this point in time and you should definitely weigh all options carefully before signing on the dotted line. However, be open to the fact that the housing arrangement you eventually decide on may not necessarily be a permanent one. For example, you may decide to sell or rent out your apartment and move back in with your parents especially when baby arrives - so it would be a good idea not to rule out living with parents for good. Dan explains, “While my wife and I were happy to have either set of parents stay with us right from the start, we have friends who chose to stay alone as newlyweds and thus purchased smaller units more suitable for housing a couple than a larger family. Nevertheless, they remained open to the option of moving back in with their parents – and did just that when baby came along - as they find the additional help and opportunities for family bonding invaluable.”
Last but not least, your future home should cater to new additions to your family. Besides the size, the interior design and the layout of your dwelling should be children-friendly. It is the wish of every parent to provide a safe and comfortable environment for our little ones to grow up in. We wish you a smooth home-planning journey ahead!