5 Singapore home-buying tips for first-time buyers

In Singapore, purchasing your first home is considered a rite of passage into adulthood. It entails (finally) leaving your parents’ house and relocating into a location you can call your own. But how do you go about accomplishing this? Whether you’re looking for a BTO, a resale apartment, or a private home, we’ve summarized the important criteria and answers for you.

Discover what you’re eligible to purchase.

Singapore properties are classified into one of three types:

  • HDB apartments.
  • Public-private housing hybrid: Condominiums for executives (ECs)
  • Private real estate includes private condominiums, apartments, and landed dwellings.

Your eligibility is determined by several factors, including your age and whether you are acquiring the property with someone else.

Before choosing a location for your first house, consider your priorities.

The most important consideration in purchasing a home is its location. These are some considerations that will assist you in identifying regions that you would be glad to call home.

The distance between your home and your workplace: Choose a location that isn’t too distant from your employment. Even though Singapore is a tiny city, the trip from Ang Mo Kio to Changi Business Park might take up to two hours. And adding only 20 minutes to your daily commute feels as unpleasant as a 19 percent pay cut.

The following is the distance from the MRT station: Purchasing a home near an MRT station saves time, but residences within walking distance are more expensive. Also, given its proximity to the CBD, a house along the East-West line is often more expensive than one along the North-South line (e.g. Tiong Bahru versus Ang Mo Kio).

Distance between you and your parents: If you live within 4 kilometres of your parents, you are eligible for the Proximity Housing Grant (PHG). However, our parents are likely to live in mature estates, where new BTOs and resale apartments may be more expensive.

Some good locations to get a property are: Forett at Bukit Timah and Midwood.

Here are some tips from first-time homebuyers on how to make the most of the accessibility vs. affordability trade-off:

Purchase smaller units and then upgrade as their family grows.

Purchase properties on undeveloped estates. Based on the May 2019 BTO sales launch, a 3-room BTO in a mature estate would have cost at least S$387,000, and one in a non-mature estate would have cost between S$165,000 and S$192,000.

Keep an eye out for hidden expenditures.

The whole variety of fees that apply is something that frequently slips consumers’ attention. If you are purchasing a BTO or a flat straight from HDB, keep the following in mind:

Property valuation reports, stamp duty fees for buyers, property taxes, and home or fire insurance fees

And, if you’re considering buying a resale apartment, keep the following costs in mind:

  • Commissions paid to real estate agents
  • Fee for processing the purchase option (OTP)
  • Increased renovation expenditures.

HDB loans are not always less expensive.

A frequent misperception is that HDB loans are always less expensive. HDB’s interest rates are set at 0.1 percent higher than the CPF interest rate, resulting in annual interest payments of 2.6 percent.

If you find a bank loan with a cheaper interest rate, the difference in rates might save you thousands of dollars. (When conducting your research, don’t forget to look for current promotions!)

However, interest rates are not the only factor. Here are some other things to consider when evaluating loan packages:

  • Fee distinctions
  • Early repayment penalties
  • Type of interest rate (fixed rate or floating rate)
  • Loan term
  • Extras such as free legal and valuation assistance and built-in home loan insurance are available.