Saturday, June 19, 2010

I forgo my HDB at Buangkok Vale

I mentioned earlier that I had applied under the BTO scheme with my girlfriend for HDB at Buangkok Vale. Well, we forgo our choice because we was given a rather poor queue number, and all of our choice units (about 85+% of the development were ok for us actually) were taken.

Basically, to us, to take the remaining 40 units is akin to scraping the bottom of the barrel. If we had wanted the HDB, we are left with no choice but to fork out $240k for a place where we wouldn't like ==> we don't really see the point.

True, it's cheap relative to resale prices nowadays, but we don't really see the point as said.

I've learned 1 lesson: if I want something good, I better not leave it to chance. Sure, chance might have given me an excellent queue number, and I would have gotten a choice unit. Instead, life decides to inculcate me this lesson. It's not about being choosy; after all, as humans, we want the best for ourselves and our families. Since chance does not want to give me a nice queue number via balloting, I have decided I will not leave it to chance.

What are our choices now?

There's one Executive Condominium (EC) development coming up that we are interested in. I have emailed the developer, and found that it will start launching from 4Q2010.

The price is indeed more expensive. In fact, could likely be twice as much as the HDB I had originally balloted for.

i.e. 500k++ for 80sqm (est) for EC vs 240k for 4-rm HDB

Other than it being an EC, it is also walking distance to Buangkok MRT, which has food courts and a supermarket. It's also walking distance to Hougang Green. On top of that, it's merely a few bus stop rides to Sengkang Compass Point or Hougang Mall, although we could take 1 train stop there too.

One might say that the price is way too expensive as compared to the HDB. In fact, my mum was worried if we could eventually pay for this development.

Let's do a reality check:
I expect this development to be ready in 3 years time at the earliest. In 3 years time, I expect the total CPF amount for me and my girlfriend to be about $100k. In cash, each of us would be able to fork out at least $50k with ease, which gives another $100k. Being a first timer, we would get another $30k rebate.

Assume the condo is priced at $600k. Stamp duty would amount to about $12.6k

In summary, amount that I would need to loan is about $615k - $230k = $385k
Taking a bank loan at 4% interest over 30 years, this would work out to $1113 per month in repayment. Together with condo fees, it would probably amount to $1.5k a month.

Assuming ceteris paribus, this would be moderately affordable when I extrapolate my possible assets in years to come. My dividends in defensive stocks would be able to cover most, if not all, of these fees. Of course, I could liquidate all my stocks and pull out another substantial sum by then, but I don't see the point of doing so at the moment.

In fact, after the minimum occupation period of 5 years, I could rent out the whole place to cover the loan too. This will greatly assist in my cash flow. Estimated time for this to happen would be 2018.

Preliminary calculations done. I shall wait for this development with my girlfriend. Meanwhile, I shall work harder and smarter to generate more assets.


  1. come live in Buangkok. We could make great neighbours!


  2. Depends on where you work really. Alot of people find this neck of the woods ulu.

  3. 500k++ for 80sqm (est) for EC vs 240k for 4-rm HDB

    You will be paying the high price for meeting your "satisfaction" and justify the higher cost to enjoy this satisfaction and also your opportunity costs. No right or wrong as one only live once.

  4. Hi Drizzt,

    I'm already very near Buangkok! In fact, walking distance to Buangkok MRT. Do you stay near too?!

  5. Hi cw8888,

    I have worked out the initial finance part, and I believe I can easily afford one. There are quite a few other reasons I didn't mention on why I have decided on the EC instead of another HDB development, but I think I will only share it at a later date :) One other reason as mentioned is that after the initial 5 years, I will most likely rent the place out.

    I believe I will be able to reach near 500k in networth before the EC is built. This excluding any contribution from my gf's part. At the worst, 350k would be achievable.

  6. JW, i am within walking distance of both buang kok and seng kang mrt. My place is bordering those 273 something block of BTO flats.

  7. Hey Drizzt, I'm in between Hougang and Buangkok MRT :)

    Maybe we can meet one day! :)

  8. Is the EC beside the mosque?

  9. Hi axt,

    The mosque is near, but it is not beside.

  10. but then you have to pay 20% downpayment soon after you book the EC, in cash or CPF. hence if it costs 600k, we need 120k in cash /cpf/ housing grant. so there's lesser time to "save" up the money as the payment is due upon booking.....

  11. "I could rent out the whole place to cover the loan too. This will greatly assist in my cash flow. "

    and please tell me that you are moving back to stay with your parents when this happens ?

  12. Hi Bernard,

    That means my CPF would have less $$. But my assets are already sufficient for the downpayment :)

    And it also means I need to find out ways to generate more income :)

  13. Hi Jimmy,

    I'm aiming for a 2nd property by then, hopefully :)

    Just a target to work towards!


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