Your Guide to Buying Property in Singapore
Updated: Jun 18, 2020
Congratulations on embarking on your search for a property!
Buying a property is a big ticket purchase albeit for your own stay or an additional property for investment.
You can be a first time property buyer or a seasoned property investor, it helps to have a comprehensive checklist and guide early on before deciding on a property.
“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” -- Franklin D. Roosevelt
Before you spend lots of time searching, shortlisting and viewing properties, you should sit down with a trained property wealth planning agent to do a detailed financial affordability analysis.
You should also apply for an in-principle approval for a loan. This helps you save time and the disappointment you would feel when you realise the home you love is out of your reach.
A chat with an experienced and skilled agent will help you get clarity into budgeting for renovations, stamp duties, adhoc expenditures and tax optimisation methods to go forward with your property purchase.
For private home buyers, do a TDSR (Total Debt Servicing Ratio) assessment. For HDB and Executive Condominium buyers, do a MSR (Mortgage Servicing Ratio) assessment.
Both TDSR and MSR assessment can be done at:
Property Type Choice
There are many types of housing in Singapore:
BTO Flats Resale Flats Executive Condominiums Apartments/Condominiums Landed Properties Good Class Bungalows
What is your current situation? Do you have time to wait? Is it best to put all the eggs in one property basket or to invest in a second property that can reap you some rental income?
What are the options for you in each type of property category?
If you speak to a professional agent, it can save you hours of research and help you narrow down your decision quickly.
If you want to do some research on your own, you can look at the top two property portals in Singapore with the most listings:
Location depends on what is your priority. Do you need to be near loved ones? What are the amenities that you need?
Homes that are within walking distance malls and train stations are usually preferred by majority compared to areas that are a bit more far flung and quiet.
According to a survey, walking distance of10 minutes for an average healthy individual is the maximum.
Tip: Buying near amenities and transport hubs will definitely make it easier for you to sell the property when you're exiting.
Brand New or Resale?
There are pros and cons to owning a brand new property like warranty for parts, lesser need for renovation, new fittings, modern design, no history of past owners, similar entry price for all owners. When there's a similar entry price, there would be upward price pressure as people want to avoid losses as it's in the human nature. And not forgetting a longer tenure for leasehold properties.
Read my article here on 99-year leasehold vs freehold properties.
The cons for brand new properties are the room sizes and overall size of the kitchen, living spaces. All these have shrunk compared to older properties. Also, as you are buying off the plan, you wouldn't know how the actual brightness will be, noise levels, water pressure, etc.
What about Resale? Resale properties usually require a lot of renovation and you have to take up a renovation loan or pay for this in cash or if the place is already renovated, it will be factored into the purchase price.
There might be some blindspots to the purchase that you realise only after later. Depending on how old the property is, there might be issues relating to waterproofing, wiring, air-conditioning, popping floor tiles, fibre connections, piping etc.
You have to be mentally prepared for additional wear and tear costs on top of renovation costs if the renovation that comes with the place is not 100% to what you require or like.
Before you put an offer for a resale property, be sure to get your agent to do a few indicative valuations to ensure you are paying a fair price. The valuation will affect how much cash you will need to fork out, CPF and loan you can use and it is a very important factor in a home purchase.
Do note that paying above valuation does not automatically mean the property is overpriced. Free valuations are "desktop"valuations and does not require the valuer to come down to the house to see the place and they don't factor in the renovations and conditions of the apartment.
Valuation is as much an art as it is a science and opinions of even veteran valuers may differ.
How do you quantify a sea view versus a city view? In different market situations (bullish vs bearish, the views would be quantified differently as well.
Getting at least 3 different valuations as well as from banks such as DBS who tend to be more conservative in valuations would be prudent.
A good place to get a free valuation would be from SRX.
Tip: It is possible to request for the valuer to match the selling price so you can get higher loans and lower cash and CPF outlay.
What about valuations when buying a new launch project?
Banks usually support the selling prices of newly launched projects and matching valuations should not be a problem.
What you should look out for is that the project is selling at fair market value compared to its neighbouring projects after factoring in the age and quantum prices (eg. $1.5m).
New properties always come with a premium and psf prices do not necessarily differentiate whether the property is expensive or cheap.
With changes in government regulations such as TDSR (total debt servicing ratio) and the removal of bonus GFA (Gross floor area) incentives for building bay windows and planter boxes has since resulted in smaller unit sizes across the island with lower quantum and higher psf.
Vacant Possession or Tenanted?
If you require a property for move-in urgently, then you would need to shortlist properties at the onset that comes delivered as vacant possession. Sometimes the tenancy can end during the completion period after OTP (option to purchase) is signed.
If the property is sold with a tenancy agreement, be sure to see the original tenancy agreement and if you are not sure of the contract terms, please ask a property agent or your law conveyancing firm to explain to you. Look out for terms like break clauses and inventory lists and handover date.
It is advisable for you to meet the tenant if the tenancy is going to go on past the property transaction to ensure it is not a phantom tenant.
There are some unethical sellers who would conjure a high yield tenancy agreement with a $1 paid up capital company in order to bait buyers. Once completion is done, the tenant breaks lease and the owner has no legal recourse.
You will need to do your own due diligence or have your agent watch out for these warning signs before you commit. When something is too good to be true, it usually is!
Securing the Dream House
Big or Small Development?
Generally speaking, people prefer big developments because of a variety of facilities offered, more security and people to share costs of maintenance.
However, the downside is when you're trying to book a facility, there might be a queue. But usually, bigger the condo, the more duplicate facilities they have e.g. swimming pools, tennis courts.
Also, when you are trying to find a tenant, it may take a longer time trying to find a tenant and your rent may be pushed down due to the amount of supply in the same condo going out for rent at the same time.
Smaller developments is not so dense and that's the main reason people choose them. Maintenance fees may not necessarily be cheaper at smaller developments.
Does the Property suit your family members?
What are the needs of your family members? Does your spouse need to commute very far to their workplace? If your parents are staying with you, will they find it easy to keep in touch with their friends? If you do not cook, are you near amenities where you can easily find supermarkets and hawker centres?
The property needs to work for everyone in your family in the long term. And if some family members are not happy, there won't be harmony! Harmony is way more important than buying a value for money property.
Transportation Options, Amenities and Convenience
Do you love convenience at your doorstep? If so, locating near a shopping mall, MRT station and amenities is the answer. However, there are others who prefer the peace and quiet of a secluded property with just one feeder bus going by every half an hour.
Is convenience more practical at the stage of your life right now?
It may be hard for tuition teachers, in-laws or part-time help to come to your place regularly if you stay in an inconvenient location.
Good Schools within 1 km
If you have young children, this is a very important consideration. It might even be number one reason you're moving or buying a property. You can use SLA's schoolquery one map to check what are the schools within the property you are looking at or you can do the reverse, check what is the radius of 1km within the school you are aiming to get your child into.
Good to double confirm if the property you are buying is within 1km of the school you are targeting. You can email SLA_enquiry@sla.gov.sg or call the SLA helpdesk at 1800 323 9829 just to clarify any doubts.
Or you can call the school and check if the address of the property you are targeting is within 1km of the school.
How many years left if it is a leasehold property?
Generally speaking, you should not really consider a leasehold property that is more than 20 years old. The chances of enbloc is usually quite slim. However, this theory will not apply if the property has a very high chance of going enbloc in the short term.
You can check whether the project has the possibility of hitting the jackpot at Edgeprop Property Calculator.
Environment at different timings and weekends
Checking the property at different timings during the day and also on weekday/weekends will give you an idea on noise level, possible bottleneck situations where parents go to fetch their kids from school or enrichment classes.
Doing the checks beforehand will save a lot of needless frustrations!
Do you mind loud noises from the expressways or major roads? The noise level also can be a world of difference for units facing the pool versus greenery.
Some locations like Punggol gets very loud noises from airplanes that can disturb your sleep in the day if you work nightshifts.
Distance and time to your workplace
Would it makes sense to stay in the West when your workplace is in the East? You have to spend 1.5 hours on commuting daily and this time spent on transport can be better spent having quality time spent with your loved ones.
Distance and time to your in-laws place
If you visit or rely on your in-laws, it would be a wise choice to stay close to them so you would not be spending time and money travelling to and fro.
Floor Level Preference
Is it a must to have the high floor unit or is mid floor good enough?
Staying on the low floor has some cons like insects, noise and dust. But some low floor units enjoy nice greenery views which high floor doesn't have.
High floor units also tend to be pricier as the price sold to these owners are increased by per floor level.
Ground floor has its own charm too but it is also susceptible to insects, privacy concerns and snails crawling directly into the unit. It is almost like staying in a landed property without having to own a piece of land.
City view, sea view, greenery view, unblocked view?
The usual premium views you would pay for are the sea view, greenery view, unblocked views of the estate and the city and city view.
If you like looking at the pool, you should purchase lower floor units so you can see the pool and all eyes would be naturally focused on what is going on in the pool. It is relaxing to sit and unwind looking at the liveliness going on.
High floor units that offer you unblocked views also come with maximum privacy. If the high floor unit is also facing other units, try to avoid these as it defeats the purpose of paying premium for high floors.
Most Singaporean buyers try to avoid the afternoon sun as we are already living in a tropical Singapore with hot and humid weather all year round. You can visit the property at 3-4pm to see if the property has an issue with the afternoon sun.
Sometimes west facing properties may be other blocks shielding the afternoon sun from the unit.
Use a compass on your smart phone to see which direction the entrance, kitchen and bedroom is facing. If the west sun is shining into the kitchen, it is ideal for sunning your laundry.
If you have a reservoir view in front of you but there is a piece of vacant land that is sitting in front of you, you may want to check on what is in the masterplan for that land before committing.
If there is going to be something blocking the views, this will affect the future price of your property.
Check URA for land use planning and zoning. It gets reviewed regularly. Checking on upcoming plots of land for sale nearby is also useful to know.
Do you need privacy in the layout so the bedrooms do not all open to the living room but open to a hallway? That hallway will take up extra floor space but it may be necessary if you want privacy.
Do you like outdoor spaces like balconies and patio? If not these are wasted spaces which you will not end up using.
Will you need to house your in-laws? If you need to and want some privacy, you can consider the dual-key layout.
Is there significant void or mezzanine space? These unusable spaces makes your price per psf even higher.
Is there a lot of wasted corridor spaces? Savvy buyers prefer optimised use of space within the apartment.
Is the layout flexible? Are the walls "knockable"to open up to bigger spaces or combining bedrooms? Do you want to have less walls and more open concept?
Are the rooms and spaces regular shaped? Regular shaped layout is usually preferred as furniture can be placed without losing any odd corners.
Where is the rubbish chute? Is it within the unit or outside?
Is there a yard to do and hang laundry? Otherwise all your clothes have to be put into the dryer.
Tip: Look out for the "free" space in front of the main door that you can put bicycles, shoe rack or extra stuff that you don't want taking up space inside the house.
Do you need a study?
During this Covid-19 crisis, almost all are working from home and this may become a norm in the future. A study is usually not big enough for a bedroom and it may be a luxury to have a dedicated room for study.
Living Room and Bedroom direction
Generally North-South facing homes are windier. However, the wind changes directions every few months and whether the property will be getting the wind depends on whether there will be any blockage in front of the apartment.
N-S facing apartments do sometimes get afternoon sun at different parts of the year.
The direction, though facing west, may get different amounts of afternoon sun at different times of the year at different angles.
East facing homes get morning sun but gets darker earlier than west facing homes.
Natural Ventilation and Brightness of property
These are factors that are permanent and renovation cannot change it.
Most people prefer bright and breezy apartments. If the apartment is surrounded on all sides, it can feel stuffy inside the apartment no matter the temperature outside.
Remember: Visiting the property yourself and assessing it personally it very important as floor plans and brochures cannot translate as much as seeing it in person.
It is important to research on the developer's reputation and the quality of fittings they provide on the past projects. Do check also if they are financially sound and completion on their last few projects.
There have been recent cases of developers who cut corners and deliver substandard quality and are facing legal suits from the buyers. Some developers cannot even complete the project and left the buyers hanging for years.
Neighbours per floor
Typically, a condo has 4 to 7 neighbours per floor. Premium condominiums have private lift lobbies.
Who's your neighbours?
Not compulsory but it would be good to check who's your future neighbours.
Maintenance fees and sinking funds
Some condos have very high maintenance fees. A 2-bedroom at Scotts Square has a $1000 maintenance monthly. Don't assume every condo's maintenance fee is around $300+. Ask the owner for the exact amount and take it into account.
Older condos need repairs and major renovations. It would be good to check if the management has sufficient sinking funds. If not, a significant amount would need to be topped up by the owners if a major renovation is due.
Water pressure (For Resale Properties)
If you intend to have a rain shower and you purchased a top floor unit, there may be insufficient water pressure for the rain shower to work properly.
It would be good to just check if the water pressure is working just right. Sometimes it may just be a technical issue that a plumber can fix.
Pool Sizes and Types (esp if you're a serious swimmer)
Some smaller condos come with a small pool good enough for dipping but not the 50m olympic sized pool for serious swimmers. You may just want to check this one out because most buyers don't look at the facilities when viewing the apartment.
Gym Size and Facilities
Some condominium gyms are fully equipped with weights, elliptical, threadmill, the works. But most are just small gyms. If you're a gym buff, do check out the gym if it fits your requirements.
Some smaller boutique developments have no visitor lots and very limited owner lots. Especially if the development is near a MRT station. There is limited land on which to develop and developer sometimes leave parking out completely.
If you have multiple cars, it would be good to check how much additional parking costs. Usually a private apartment will allow complimentary parking for one or two cars per unit.
If you have parties or entertain frequently, it would also be good to find out how many visitor parking lots there are.
Side Gates, entry and exit routes, shortcuts are there?
If you're located near the MRT or mall, there are usually side gates to exit nearest the mall that can save you lots of time walking around the compound.
Exactly what items will the owner be leaving behind or taking away? Generally, if it is a fixture (not moveable), it will be left behind. And if the particular piece of furniture is unique and costly, the seller will normally highlight to you that it will not be left behind.
It would be good to get everything in writing and take photos so there is no miscommunication at the end of the day.
Lastly, learn about where the growth hotspots in Singapore are unfolding over the next few years!
Drop me a private message to be invited to OrangeTee's Consumer Investment Talks that are held all over the island!
I hope you find this article useful in helping you in your search for a new home!
Need help in your search for your ideal home?
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About the Author, Susanna Wong:
Susanna has been in real estate since 2006. She has transacted many private properties including GCBs (Good Class Bungalows) and Sentosa landed properties and of course HDBs. She is married with two lovely girls, Sophie, 6 and Sage, 1. Her husband, Roger and her share an obsession for MMORPGs and scrabble. They met on OKCupid (dating app) while challenging each other on Words with Friends (iphone App game). She loves watching binge watching Netflix in her free time (very rare with two children!) with a tub of Ben and Jerry's.