Singapore Property: A guide for buyers

Buying Properties In Singapore

Singapore Property : Tips For Buyers

So you’ve decided to take that leap. Kudos, buying a property in Singapore is no laughing matter. Here are some tips to keep in mind before embarking on  property tours.

Very often, buyers jump into the process without sitting down and compiling a list of essentials their new home should have.What this can lead to, is a lot of time wasted, going for viewings and visiting open houses. This may not sound so bad if you have a lot of time to kill but if you’re hard pressed for time, all that viewings can sap your energy, perhaps leading to a rash  purchase because of emotional reasons or just out of sheer exhaustion.

First of all, determine if the purchase for your own use i.e. you are buying your own home or is it just for investment purposes? It is extremely important to acknowledge this, as investment properties  have a separate set of qualities altogether.

Due to the cooling measures, it’s currently a buyers market in the Singapore. Prices have been steadily falling due to the additional cost of government tax, called the Additional Buyers Stamp Duty or the ABSD.  For HDB Resale Flats, COVs or cash over valuation for larger properties have been steadily falling, and it is possible to purchase the flat at $0 Cash over valuation. But that doesn’t mean COV doesn’t exist, read more about it here.

Singapore Property

For potential buyers looking for a unit to live in

1) Make a checklist of what you need in a home.

You can later narrow it down to ‘must haves’ and ‘good to have’. For e.g a ‘must have’ may include a certain number of bedrooms to accommodate your family. A ‘Good to Have’ criteria may include that pool view from your balcony window.

2) Assess your financial situation.

Are you still eligible for a hdb loan or do you have to take a mortgage loan from a bank? If you are taking a loan from HDB, the first thing you need to do is get your HLE or Housing Loan Eligibility . If you are taking a loan from the bank, this is the time to identify which banks offer the best rates or packages that’s ideal for you. There are various online services that compare rates from banks but its best if you approach an agent and request for their contacts  to provide an IPA (In-Principal Approval). You should also factor in the revised Loan to Valuation(LTV)  Rates as well as the Total Debt Servicing Ratio Regulations (TDSR) that the Monetary Authority of Singapore (MAS) issued on 29 June 2013.

3) Take note of your future finances

If you are a Singaporean citizen and are considering utilizing your CPF in your home purchase, take note of how the various CPF limitations might affect you in the future, for e.g. the required minimum sum balance, the 120% withdrawal limit for housing loans. Also remember that your employer’s CPF contribution decreases as you age, so you would have to fork out extra cash to pay off that monthly mortgage.

4) Have your décor concept in mind as you shop for homes

Everyone knows, renovation costs can add up, especially if there’s alot of hacking involved. When buying a resale property , you can save cost if you make use of existing features that can be spruced up with just polishing or a fresh coat of paint. Read our article on comparing Resale, New Launch and TOP Properties  or BTO vs Resale HDB here. 

5) Keep in mind your long term/ retirement plans

Your long term plans may influence your decision to purchase a freehold or leasehold property. If you plan to sell your flat or house to fund your retirement, perhaps you may consider buying one in an under developed area which would be fully developed by the time you’re ready to cash out. If you are thinking of relocating to a country with lower living costs for e.g. Malaysia, keep in mind the property’s potential for rental. This article gives an interesting view of the depreciation of properties. 

For potential owners of Singapore properties for investment purposes

Before you put that hefty downpayment for that investment property, you should keep the end goal in mind that is, you would want to own as many properties as possible in the long run so that you not only aim towards obtaining a smooth flow of passive income, you are also owning an investment asset that someone else is paying for. 

1) The numbers matters : Asset progression

There are a few things you should always look at before purchasing a property.

  1. What is the potential capital upside based on surrounding properties in the neighbourhood or general area?

  2. Are there any risk that you can forsee with regards to this piece of property?

  3. Have you done a stress test to see if you can afford to hold on to the property in the event rents fall?

In addition to the rental yield estimate given by the developer, you should take the additional step of surveying the average rent around the area. Another plus point with doing your own research is that you are able to gauge the number of units up for rent around the area. Too many uninhabited units may signal a lack demand for Singapore properties in that particular area.

2) Freehold or Leasehold 

Leasehold properties are generally cheaper than freehold properties which mean better monthly returns but bear in mind that, depending on the duration of the lease, leasehold properties might not be assets you hand down to future generations.

3) Determine your target renter

Is the floor space large enough for a family? Are there schools nearby which they can send their children to? What are the specific facilities / amenities which can add value to them?

If it’s a one or two bedder meant for singles or childless couples, are there amenities that fit into their lifestyle around the area?

If you are targeting foreign students, determine what’s the typical price they can afford to pay. Of course everyone wants to rent their apartment out to the son of some rich Indonesian businessman but be realistic, Is your unit close to tertiary schools or does it have direct transport access to those schools which you can use as a marketing point?

4) General Amenities and proximity to public transportation

In Singapore, due to the crazy price of cars, homes near MRT ( the subway)  stations command a premium. Unless your target audience can afford a car, proximity to the MRT station is always a good bet. Distance to hawker centers or food courts are also a good bet. However take note of the Government’s transportation redevelopment plan, if you are looking for undervalue properties as most estates would be served by an MRT or LRT station.

5)Location, Location, Location

We know you’ve heard this all before, but instead of looking where everyone else is, think outside the box. One good strategy is to purchase developments in up and coming neighborhoods, although significant research would have to be done to determine the likelihood of this happening.

Now that you’ve sorted out all that information, select a property / real estate agent and happy shopping!


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Zubz Kadir is the founder of PropertyRocking.SG She believes that real estate is the biggest purchase one can make and such a decision should not be taken lightly. Knowledge can make or break a purchase. Zubz graduated from National University of Singapore (NUS) Bachelors with a Degree in Informations Communications and Sociology from the and a Masters of Mass Communications from Nanyang Technological University (NTU).