Mr Budget came across a recent article which resonated a lot with him.
Lizardo shared this in a recent article titled “angst of replacing home”:
“A 17th floor condo at 1292 sq ft bought 12 years ago was $501,000, and is roughly worth $950,000 now. That sounds like so wow. BUT, to get an equivalent place, the price tag appears to be $1,300,000 for a 5-year resale condo on a mid-floor, with only ~1000 sq ft! That’s a differential of +$350,000 for a smaller space.”
One of Mr and Mrs Budget’s plan is that we will be upgrading our current condo to another new place (can be private or HDB) in the future when we have more than 1 kid.
Our current place is 872 sqft and comes with 3 bedrooms, one of which is the master room, the other one is a guest room, and another is a small room which we double up as a study room now because it is too small to fit anything larger than a single bed.
Hence, it is not feasible for the house to accommodate more than 4 person if we were to get a helper next time.
Based on our timeline, if we were to upgrade our current place in 5 years time from the current 872 sqft to something like 1100 to 1200 sqft feet, the price of a resale condo will be at S$1,500,000 – S$2,000,000 then, and even higher for new condo projects.
Here’s the rough value estimation of the condo we are living in now:
|Condo Value||PSF||872 sqft||1100 sqft||1400 sqft|
|Price In 2015||$895.00||$780,000.00||$984,500.00||$1,253,000.00|
|Price In 2019||$1,261.00||$1,100,000.00||$1,387,100.00||$1,765,400.00|
|Price In 2023||$1,778.00||$1,550,000.00||$1,955,800.00||$2,489,200.00|
Although the price of our condo would have appreciated in 4 – 5 years time, if we were to move to another condo at 1100 sqft, we will probably need to top up at least S$400,000 – S$500,000.
And finding that additional S$400,000 to S$500,000 is not something that is easy, and will affect our retirement planning in a substantial way. We can fund that via a higher loan quantum, but that will increase our debt servicing ratio.
Bigger sized private properties are really getting very expensive, and we may be looking at public housing and renovating it into something comfortable, should the time come for us to move to a bigger place.
Anyone has any experience in terms of housing upgrade from a smaller unit to a bigger unit? How do you work out the finances?
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