Which Singaporeans Can Benefit From Buying a Multigenerational Home?
In land scarce Singapore, where the property prices are still pretty high despite the past two years of cooling measures, I’m sure no one’s going to blame you if you’re married, in your 30s and still living with your parents. Well, maybe one person might blame you. Your spouse. But don’t fret.
There is a way to still live with your parents without constantly checking your spouse’s Google search history to make sure they’re not planning the “perfect crime” to spill your guts all over the flat. This solution is the multigenerational apartment.
Now, just to be clear, I’m referring to the really large apartments. Those that are specifically built for at least three generations in a family to live in. I’m not talking about 5-room HDB flats, which are slightly smaller but only seem designed to induce Game of Thrones-inspired family anxiety. Let’s be honest, 3 generations were not meant to share only 2 toilets. Now, multigenerational apartments can come in many different varieties. Here are the 3 most common types.
1. Jumbo units
When I speak of the legendary “jumbo units”, I’m referring to multigenerational flats created in the mid-1980s. As the first multigenerational apartments in Singapore, it was an experiment that never quite caught on back then. Sources say that only eight of these flats exist around Singapore.
The unique feature, back then, was the adjoining studio apartment in each unit. The studio apartment had its own separate entrance and came with an attached kitchenette and bathroom, but was linked by a door to the main flat. As you can imagine, we’re talking about huge apartments that, at 1776 square feet, are 1.5 times the size of a typical 5-room HDB flat.
The good news is, they’re not too costly either. One of these multigenerational apartment units at Block 137, Bishan Street 12, recently sold for $805,000. We’re talking about an average of $453 psf, which is actually lower compared to the median resale price of $547 psf in the same area.
Of course, despite the relatively cheaper price per square foot, it is still quite a hefty sum to pay for a HDB apartment overall. Fortunately, as a resale flat, you will have several grants that you may be able to qualify for.
What are the specific grants available?
You have the Family Grant of up to $30,000 for married couples who are first time applicants. You will need to meet the necessary requirements, including income requirements of not more than $12,000 per family group (i.e. the married couple) and $18,000 combined (i.e. including the parents’ income). You may also be eligible for the Additional CPF Housing Grant of up to $40,000 if your household income is $5,000 or less. Finally, the newly introduced Proximity Housing Grant of $20,000, since your parents will be living with you.
Altogether, you may be eligible for grants of up to $90,000 depending on your income, or about 11% of the purchase price.
Who will benefit from buying a “jumbo unit”?
With more than enough space for everyone, the original multigenerational flats are a steal, but only if you can find one. A limited number of flats means that you’ll have to wait for someone to put their flat on the resale market before you can buy it.
2. Dual-key units
These are units in executive condominiums designed to have two different-sized apartments under one roof. The concept is actually similar to the “jumbo units” mentioned earlier, with a studio apartment connected to the larger apartment. Unlike those flats, however, the name “dual-key” implies a need for two keys to get into your apartment. The first key is to get into the common area – this could be as large as a shared living room, or as small as a foyer. The second key would then allow you access to either the studio apartment or the larger apartment.
The studio apartment is self-contained, with its own kitchenette and bathroom. This way, you could enjoy the privacy of your own apartment, while still taking advantage of the proximity of having your parents literally next door.
However, Singaporeans being Singaporeans, some of us tried to game the system back in 2013 by renting out the studio apartment to earn income. Basically, those who did this spoiled the market for the others, and now you can only apply for a dual-key unit if you form a multi-generation family.
With various sizes available depending on the various executive condominium projects, dual-key units can range from 1,227 square feet to 2,841 square feet. In general, however, you can expect to pay around $870 psf.
What are the specific grants available?
Because dual-key units are only found in Executive Condominiums, buyers of new units will only be eligible for the Family Grant of up to $30,000 for married couples who are first time applicants. The income requirements for this grant means that households must not earn more than $12,000 to qualify. The higher your income, the lower the grant amount you qualify for.
If you’re buying a dual-key unit on the resale market, then you may be eligible for more grants, including the newly introduced Proximity Housing Grant of $20,000, since your parents will be living with you.
Since it’s going to be such a hefty financial commitment, consider doing your research for the best interest rates for your home loan.
Who will benefit from buying a dual-key unit?
Because of the significantly higher prices of these units in executive condominiums, they tend to only be suitable for families who are well-established in their careers and can afford it. Of course, you have to make sure you meet the income requirement for ECs, which has been increased to $14,000 this year.
3. 3Gen flats
We’ve talked about the pros and cons of these type of multigenerational flats in an earlier article, but the basic conclusion is that these flats are general cheaper and easier to get, if you’re willing to stay in close proximity to your parents and are okay with the restrictions on renting and selling the apartment later on.
The 3Gen HDB flats are the latest version of the multigenerational flats – riding on the request for more affordable alternatives to the dual-key units. However, at about 1,237 square feet, the size of the flat is barely larger than a 5-room flat, yet comes with 4 bedrooms and 3 bathrooms, leaving very little room for everything else.
At an average price of $400,000 per unit, it’s hard to deny the financial value of buying such a flat for you and your parents to live in. However, you may want to keep the money you’ve saved to pay for the inevitable therapy sessions.
What are the specific grants available?
Because 3Gen flats are only found in new BTO flats, you may be eligible for the Additional Housing Grant and Special Housing Grant. Depending on your household income, you may be eligible for up to $80,000 in grants, if you’re earning $1,500 or less.
Since there are no 3Gen flats on the resale market yet, you won’t be eligible for the newly introduced Proximity Housing Grant of $20,000.
Who will benefit from buying a 3Gen flat?
Families that are extremely close knit and can enjoy the benefits of living close by due to the support parents can give to children and grandchildren, and vice versa. Do not take the risk if you need privacy or large personal space.
Alternatively… there is the option of buying two separate flats in the same area
If, at the end of the day, you don’t think staying with your parents is suitable, there’s always the option of buying two units in the same estate and staying close by to one another.
The Proximity Housing Grant of $20,000 applies to all home buyers whose parents or married child live in a HDB flat in the same town or within 2 kilometres from you.
In addition, you can use the Multi-Generation Priority Scheme, which gives your priority allocation if you and your parents apply for two separate flats in the same BTO project. Or you can use the Married Child Priority Scheme, which also gives you a higher chance of getting a flat if you apply for one that is near your parents. Of course, priority will first be given to those who dare to live together with their parents.
Because, you know, that takes guts.
Do you think it’s a good idea to live together with your parents? Why or why not? Let us know.