5 Important Considerations When Upgrading to A Bigger Home

After staying in your current property for five or more years, it’s understandable that some may consider upgrading to a bigger home. By this time, you may have a bigger family and also climbed the corporate ladder earning a better pay cheque. While you already have experience buying your first property, upgrading is an even more complex situation. 

Here are 5 key considerations that you likely have to take into account when buying your new and bigger home.


1.  What Do Your Family Members Need? 

If you are moving to a bigger home, there’s a good chance part of the reason is that you now have a bigger family with more space requirements. This could be family members who intend to move in with you, such as your elderly parents, in line with your plans to have more kids in the future, or hoping to give your children separate rooms of their own. 

In any case, it’s not just the size of the flat that you need to think about for your new home, but also its layout. For example, if you are going to live with your parents, you may want to have at least two ensuite bedrooms – with their own attached bathroom. Also, if you have elderly parents or grandparents, it may be challenging in to move into a landed property or maisonette that only has rooms on the upper floors. 

Related article: Property Floor Plan Guide: How To Read Your Condo or HDB Floor Plan Correctly

Similarly, some owners may prefer to avoid homes with a roof terrace if they have young kids for safety reasons. 

If your family is more mature, with both parents and children working potentially from home, you may choose to have an additional study room or more working space to allow for a conducive work-from-home environment. 


2. HDB, Condo or Landed Property?

If you need a bigger home, you would need to consider beyond the standard 3-room, 4-room and 5-room HDB flats that most Singaporeans live in. 

One affordable option is to consider larger HDB flats such as 3Gen flats or Executive Flats, or even Jumbo flats. These HDB flats are bigger and typically less expensive compared to similar-sized private properties. However, they are also subject to standard HDB ownership rules. For example, if you purchase a 3Gen flat, your parents must also be registered occupiers of the flat and cannot have other property registered to their names.

If budget permits, you can consider a condominium or even a landed property as they also provide more choices when it comes to size and layout. For example, you can consider getting a dual-key condominium unit if you wish to live with your parents, but still allow for separate living spaces. Condominiums may also have separate living space for helpers with a utility room and may come with a dedicated study room.

With landed properties, you will not only enjoy more space but can also choose to do construction work or even rebuild their entire house if you want since you own the land plot. 


3. New Launch or Resale Property? 

There is a general propensity to opt for new launches in Singapore and it’s not difficult to see why. Besides having a fresh lease, new developments today tend to be better built with high-end furnishing and top-notch facilities that can easily rival what is being offered by many country clubs and even some hotels in Singapore. Unsurprisingly, they also tend to be more expensive per square feet (psf) due to higher building costs as well as greater interests from potential buyers. 

On the other hand, older units are usually cheaper in terms of PSF. The advantage with older units is that you can also move in immediately, rather than wait three to four years for your home to be built. Also, with Singapore being a developed country, there are ample condominium developments, cluster housing developments or individual landed properties that you can choose from. 

However, older units may also require additional renovation works, so you should factor this into your home ownership cost when purchasing a property. For example, suppose a resale condominium unit is selling at $1.2 million but requires extensive renovation work that could cost you $100,000. In that case, the resale unit will only be slightly cheaper as compared to a new launch that is being priced at $1.35 million. Moreover, maintenance fees for older condominium units tend to be higher as well. 

Related article: New Launch Property vs Resale Condos in Singapore: Which is Better?


4. Freehold or Leasehold?

One of the allures of older condominium units and landed properties is that it’s easier to find freehold or 999-lease developments, as majority of newer developments are 99-year leasehold. This would appeal to homeowners who are worried about lease depreciation. If you choose a private property and have selected your preferred location, consider the price difference between a freehold and leasehold unit. 

Depending on the location and size of property, a freehold unit may cost approximately 20% more than an equivalent leasehold unit. Over time, the general expectations are that the freehold unit will retain its value better and may even appreciate faster than a leasehold unit. However, this may or may not be true as many other factors will determine the future value of a property. 

Related article: Freehold vs Leasehold Condos In Singapore – Which Is Better?


5. Do You Need an Interim Place to Live In?  

There will be some inconvenience when it comes to moving home that you will need to be prepared for. 

Timing is essential. If you get it wrong, you may have to pay quite dearly for it. While selling your property and directly moving into a new home is the ideal outcome, it can limit your home and financing options because of uncertainties you will face when selling your existing home and choosing a new home you want to purchase. This also means you will be slapped with a hefty upfront payment of 12% Additional Buyer’s Stamp Duty (ABSD). While you can receive ABSD refund if you sell your existing home within 6 months of purchasing your new home, timing can be very tricky and may impact your ability to get a good selling price.

One established strategy is to sell your existing home, rent another property for a period of time, before buying a new property. Of course, this means that you need to pay additional rental costs, especially if you have a big family unit. 

If you are buying a new launch that is only going to be ready a few years from now, you have more time to find a buyer and get a good price for your property. Depending on when you are able to sell your home, you may need to find a longer-term rental unit to stay during this period.

You can rely on PropertyGuru to find your dream home to upgrade to or an interim rental home you can live in while you hunt for your dream home. Providing an all-in-one solution, you can also tap on PropertyGuru Finance to plan your budget and get the most suitable home loan for your property purchase.


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