Should You Buy the Biggest Flat You Can Get?

Ryan Ong



Financial prudence is a funny thing. Taking steps to save money might mean the opposite of taking steps to make money. That’s why the whole “winning by not losing” approach doesn’t produce too many millionaires. And the whole risk question, for most of us, comes to this: How big a flat should I get, without risk of my next home being the communal dump? Do I get the biggest I can, or opt for something cheaper?

The Upsides of Getting the Biggest Flat

The reasons for getting a bigger flat are seldom about money. Most of the time, emotional factors are key. And unless you’ve got the psychological needs of a deceased mollusc, emotional factors are never something you can ignore.

You’re not a corporate entity, able to live on strict financial reasoning. Try it and you’ll crack.

Few families can spend 10 to 15 years in the architectural equivalent of a sardine can, and manage to stay happy. You’ll be surprised at how much damage a lack of privacy can cause. So if you’re planning to stay for a long time (10 years or more), it’s better to over-estimate the space you’ll need.

That aside, consider the other benefits:

  • Might Get Higher Capital Gains
  • Easier to Downgrade Than to Upgrade
  • More Opportunity to Raise Property Values
  • Might be Able to Sublet


Might Get Higher Capital Gains


$5 note
In hindsight, my “Apocalypse Now” living room theme was inadvisable.


Remember in the past, when HDB built big units like Maisonettes? We went on and on about how they were overpriced, how the buyers were morons, etc.

Well, who’s laughing now? Recently one of them sold for a cool $980,000.

Look, I’m not promising that bigger flats = better gains. In fact, location is as much a factor as size. If the unit is two feet from the longkang, all you’ve got is a particularly spacious sewage hut. But in a very general sense, bigger HDB flats hit higher resale prices.

A four-room flat will, all things being equal, usually appreciate faster than a 3-room flat.


Easier to Downgrade Than to Upgrade


Mah Jong
“Don’t worry, I have a sound financial plan to afford the upgrading.”


If you buy a four-room, and later decide you don’t need the space…well, downgrade. You can do it once you’re past the five year MOP (minimum occupancy period). Downgrading from a four-room to a three-room should pay off the outstanding home loan, and leave a nice surplus.

But say you do it the other way around (upgrading). You buy a three-room first, because you want to save a bit on loan repayments. Nevermind the lack of space and privacy. You bear with cramped conditions for one year, two years, three years…

Eventually, the house looks like a four way collision between karang guni trucks. You suspect indigenous life forms now live amidst your piled-up stuff. Your family uses kitchen knives to secure access to the one toilet every morning.

Can you bear waiting to the end of the MOP? It’s not hard waiting for the MOP with too much space, but it is with too little. And even when you pass the MOP, are you sure you’ll be able to afford a bigger flat?

Remember that HDB prices may have risen significantly by then.


More Opportunity to Raise Property Values


Nice toilet
Of course it’s nice. It doubles as the bedroom.

Interior Designers and contractors can do more with bigger flats.

Most of the trending (read: COV contributing) features require space. Lots of it. These are things like walk-in wardrobes, kitchen islands, custom tubs, etc.

I spoke to a sales designer from one of our local firms, who only wants to be known as Lita:

It’s possible to do up a smaller flat of course, but the options are more limited. In most cases it comes down to opening up spaces, choosing colours, and a feature wall. For the kind of upgrades that really ‘wow’ people, I think a certain amount of space is needed. So of course, bigger flats are definitely easier to upgrade, design-wise, than smaller ones.”

Which isn’t to say a small flat can’t have any boost to COV via renovations. Just that said renovations can’t contribute as much.

For more on raising resale value, follow us on Facebook.


Might be Able to Sublet

If your flat is a three-room or larger, you’re allowed to sublet rooms. See the exact rules here.

Having subtenants is a life-altering experience, and one that’s about as comfortable as discussing your sex life on the nine o’clock news. It spoils the whole “privacy” advantage is what I’m saying.

But hey, if you’re in a pinch, it helps with the loan repayments. Some young couples might want to get a three-room with one close relative, instead of settling for a two-room to save money.


The Downsides of Getting the Biggest Flat

The downside risks are situational.

These are:

  • Opportunity Cost (If Not Using CPF)
  • Financial Problems Can Be Magnified


Opportunity Cost (If Not Using CPF)


glasses on stocks page
…and maybe if we paid the power bill, you’d pick the right stocks more often. Just saying.


Say you’ve cleared out your CPF, so you’re paying your home loan in cash. What’s the size of this crater in your cash flow?

When you’re juggling credit card loans, car loans, personal loans, etc. even a few hundred dollars a month can make a difference. You might want to pick a smaller flat to avoid damming up your cash flow.

Also, this is a factor to anyone investing in equities, Forex, etc. The more you spend servicing a home loan, the less you have for other investments. Treat it as an opportunity cost: You might miss out out on an investment that’d net you private property in five years; if you’d just bear with a smaller flat for now.

Of course, if you have no other investment plans, this isn’t an issue.


Financial Problems Can Be Magnified

A bigger flat saddles you with more debt, thus magnifying financial problems.

If you have a DSR of around 30% (possible with small HDB flats), you’re the financial equivalent of Fort Knox. You’ll have enough money to cope with another loan (if needed), set aside decent savings, and probably find alternative investments.

Even if you lose your job or have a medical emergency, you should be able to make loan repayments until you’re back on your feet.

So if you’re in a risky situation (e.g. just went freelance, just launched your own start-up), you might want to consider a smaller flat.

In conclusion, whether you should get the biggest flat is subjective. There’s no single answer for everybody. Just be sure to consider your immediate financial situation, and to take into account your psychological needs. Also be sure to get the cheapest loans if you turn to the bank, via sites like


Image Credits:
Thant Zin Myint, Milo Riano, rogue-designs, Iman Mosaad, The Integer Club

Did you get the biggest flat you could? Comment and tell us why!

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Ryan Ong

I was a freelance writer for over a decade, and covered topics from music to super-contagious foot diseases. I took this job because I believe financial news should be accessible and fun to read. Also, because the assignments don't involve shouting teenagers and debilitating plagues.