An Expert’s View on Building Your First Nest


In Singapore, when the topic of obtaining a property is brought up, the route commonly chosen by most couples is to jump feet-first into the balloting pool of HDB’s Build-To-Order (BTO) flat to score a house, even before an actual proposal takes place. As such, most of them end up with a dilemma when it comes to the selection of their first home, wondering what would be their ideal home.

Having been in the property industry for 6 years, I have assisted numerous couples in the purchase of their first home. So allow me, YT Tan, to guide you through the process of choosing the right home with a few illustrations for your better understanding.

Couple A: Has a combined income of $5k per month


Based on the Mortgage Servicing Ratio (MSR), Couple A can seek for a HDB ranging from $366k (with 90% HDB loan of $330k) to $373k (with 80% bank loan of $299k) or based on the Total Debt Servicing Ratio (TDSR), they can look at private properties that cost up to $835k (with an 80% bank loan of $668k).

For most like-minded couples, a HDB flat would be the ideal choice as financial commitments are highly reduced.  Comparing it against a monthly repayment of $3000 for a private property purchase, a $1500 monthly repayment is definitely an easier course to take on.

However, it is strongly advisable that Couple A does not purchase any HDB flat that are almost 40 or over 40 years old. This is because, buyers are bound to encounter difficulty in utilising the maximum loan and usage of CPF OA funds if the flat’s balance lease is less than 60 years. Even if the couple is eligible and decides to proceed with this purchase, it might be tough for them to find a qualified buyer if they intend to sell it in the future.

Having said that, the ultimate decision still boils down to each couple’s preferences as they consider between getting a HDB flat or a private property. Since wedding preparations like the photoshoot and banquet are ongoing, they might eventually drop the idea of getting a private property to avoid facing a heavy financial burden and decide to go for a HDB flat instead. But do note that private properties tend to have better upside potential compared to HDBs, they are influenced by market conditions, unlike HDBs.


Couple B: Has a combined income of $10k per month


With a higher combined income, Couple B is able to consider a wider range of properties such as: BTO, resale HDB, new Executive Condominium (EC) as well as private properties. Based on the MSR, they can look at HDB ranging from $734k (with a 90% HDB loan of $661k) to $748k (or a 80% bank loan of $599k), or based on TDSR, a private property that costs $1.66m (with an 80% bank loan of $1.33m).

Based on their budget, they can also opt for either a BTO or a resale HDB in mature estates. However, if they prefer not to wait, a resale HDB will be more ideal given that they are able to choose the unit according to their preferences and requirements such as the floor level, block etc.

It is also advisable that Couple B considers purchasing a new EC. Being first timers, they won’t be subjected to resale levy and they would still be eligible for a housing grant up to $30k. ECs are usually priced 10% to 15% cheaper than surrounding private properties. Statistics have also shown that the price difference between EC and private property narrows down when EC fulfils its Minimum Occupation Period (MOP) of 5 years and even more when it is privatised.

If the couple does not wish to be tied down by the 5 years MOP, they can choose to opt for a private property which can be joint purchased. Or if they prefer, the property could be purchased under one party’s name first, then when they intend to invest in other property at a later date, the second party’s name could come in handy. Otherwise, if they are financially savvy, they can purchase two properties under two individual names because by doing so, they get to enjoy tax savings.


Couple C: Has a combined income of more than $16k per month


Based on the MSR, Couple C can look at HDBs that range around $1.19m (with an 80% bank loan of $958k) or purchase a private property that is priced up to $2.66m based on total debt servicing ratio (with an 80% bank loan of $2.13m).

For a couple with such a strong combined income that exceeds the income ceiling, they would not be eligible for the following: a BTO, new EC, HDB loan or housing grant. If they choose to purchase a resale HDB, they are required to fulfil the MOP before investing in private properties.

Personally, it is not advisable for Couple C to purchase a matrimonial home together. Reason being, if they first purchase a private property jointly, they will be subjected to 7% Additional Buyer’s Stamp Duty (ABSD) when they decide to purchase their second property. On top of that, there will be restrictions concerning the maximum loan quantum and usage of CPF OA funds.

Hence it would be better if they were to purchase two private properties under two individuals, dedicating one for their own stay and the other for investment.

If the house were to be used for personal homestay, it is recommended that they get a resale flat or the balance units under Temporary Occupation Period (TOP) projects so that they get a feel of the space, the facing etc. Whereas if the property is to be used as an investment, the couple should look into two aspects: rental and upside potential to decide which would fit best within their budget.


The above scenarios have been generalised and thus might not be applicable to everyone. However, it is recommended for couples to apply for a housing loan before embarking on their house hunting so that they have a budget to keep in mind. Couples should also engage and speak to a qualified professional for further advice in order to come out with a plan that is perfectly tailored for both of you!



The above illustrations are based on the assumptions that the couple are both Singaporeans and currently do not incur any debts such as credit card loan, car loan, study loan etc.

The property price range they are eligible for, can only be met if they have sufficient finances (CPF OA funds and cash) for the initial outlay (20% down payment and stamp duties), if not it is advised that they lower their expectations.


Terms frequently used:

1) MSR: Mortgage servicing ratio (30% of income)

2) TDSR: Total debt servicing ratio (60% debt of income)

3) MOP: Minimum occupation period (5 years)

4) ABSD: Additional buyer’s stamp duty (Varies according to residency status and number of residential properties owned in Singapore)

5) TOP: Temporary occupation period

YT Tan

Associate Group Director
Propnex Realty Pte Ltd
Blk 480 Lorong 6 Toa Payoh, #11-95 HDB Hub East Wing, Singapore 310480

(M): +65 9111 5171
(E):[email protected]




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