Khalil Realtor

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I have been writing about the property market since 2008 and pride myself for my unbiased research and analysis 
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5/27/2023

From public rental flat to HDB part 2: How another family upgraded to a resale flat with my help

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Finding a home within their means: Navigating the record high HDB resale market

By Khalil Adis
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A public rental flat in Punggol. Photo: Khalil Adis
Imagine spending four long years in a cramped public rental flat, yearning for a bigger and better space to raise your child. 

That was the reality for Andy and Ruby (not their real names), a young couple determined to improve their living environment. 

With their aspirations set on a 4-room HDB flat, they sought my assistance in their quest. 

After three weeks of house hunting, we finally secured a resale flat in Sengkang without any cash-over-valuation (COV). 

Let me take you through the steps we followed.

Step 1: Ensuring the basics: Intent to Buy and HDB Loan Eligibility (HLE)
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Photo credit: Pexels.
Our first priority was to ensure Andy and Ruby had registered their Intent to Buy and obtained the HDB Loan Eligibility (HLE) document. 

These two crucial documents were necessary for financial calculations and obtaining the Option to Purchase (OTP) from the seller's agent.

Step 2: Crunching the numbers: Cash, CPF, and HDB loan
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Photo credit: Pixabay.
We then worked together to determine the couple's available funds, including cash, CPF savings and the HDB loan. 

Their combined resources amounted to $58,000 in CPF, $2,000 in cash and a $364,000 HDB loan.

Step 3: Exploring eligible grants
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To maximise their budget, we identified three grants they qualified for - the Family Grant ($80,000), Enhanced Housing Grant ($35,000), and Proximity Housing Grant ($20,000). 

These grants added up to an impressive $135,000 in CPF grants, providing a significant boost to their budget.

Step 4: Determining the total housing budget
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Photo credit: Pexels.
Combining their available funds with the CPF Housing Grants, Andy and Ruby's total housing budget came to $557,000. 

This amount was more than enough to afford the 4-room HDB flats they had set their sights on in Hougang and Sengkang.

Step 5: House hunting challenges and adaptation
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An HDB flat in Hougang. Photo: Khalil Adis.
During the initial two weeks of viewings in Hougang, we faced fierce competition from other buyers. 

The units Andy and Ruby had selected were beautifully renovated, driving up the price with a cash-over-valuation (COV) of around $20,000—a cost they were not willing to bear.

Step 6: A change in strategy and finding the perfect fit
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HDB flats in Sengkang. Photo: Khalil Adis
To overcome the challenges, I advised them to consider slightly older flats that may require some renovation but would not attract as much competition. 

We eventually found a 4-room flat in Sengkang with approximately 78 years of remaining lease. 

Based on recent transactions in the area, we made an offer of around $485,000. 

I also suggested increasing the deposit from $1,500 to $2,000 to secure the unit.

Fortunately, this flat did not come with any COV, leading to substantial savings compared to their initial budget.

Conclusion
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Screen grab of HDB Resale Price Index (RPI) for the first quarter of 2023. Credit: HDB.
In conclusion, the resale HDB market still offers affordable flats, even in the face of record-high prices. 

By leveraging CPF Housing Grants, low to middle-income families can significantly reduce their purchase costs. 

It takes a change in strategy, research, and negotiation skills, but upgrading from a public rental flat to owning your first home is within reach. 

If Andy and Ruby can do it, so can you.

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    Khalil Realtor

    A regular contributor for PropertyGuru Singapore's AskGuru column, Khalil has his fingers right on the pulse of Singapore's vibrant real estate market.

    Khalil is the former editor of Property Report and has written for PropertyGuru, iProperty.com, Yahoo! Singapore/Malaysia, The Malay Mail, Berita Harian, Real Estate Malaysia, Property Buyer and The Star, among others.

    ​Renowned for his independent views and insights on the property market, Khalil is a highly sought-after speaker in Malaysia and Singapore. He has given talks at various expos and at property launches. He was also on the judging panel of the South East Asia Property Awards (Malaysia). He has written two bestselling books - 
    Get It Right Iskandar and Property Buying for Gen Y.

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