A housing guide for singles in Singapore
Besides understanding how to operate the dry cleaner, living on your own is arguably the biggest rite of passage to independence. The gentlemen first had a taste of it in National Service, and the ladies probably got the first-hand experience in university dorms. When it comes down to it, everyone knows all too well the married folks have an easier time with home ownership compared to individuals who prefer to stay single. HDB flats are only viable if a single is 35 years old and above, and private properties are likely to be out of the question considering the astronomical cash outlay. For those eager to live away from their parental homes over personal motivations, what is a destitute single to do?
We glean scholastic nuggets of wisdom from property insiders, agents and - what do you know - Singaporean Redditors.
Rent an HDB Flat
In the realm of public housing, the legislations have made it impossible for singles under 35 to own an HDB. Rentals would be the most viable option. Compared to home ownership, rentals have been cast in a negative light the whole time. The rationale is you are not owning an asset (that hopefully appreciates significantly in the long run) that could be monetised in the future, you are putting yourself in a less-than-ideal situation of throwing away money you won’t see again.
There is some kernel of truth in that the money could better be put to work, but the same concept of opportunity cost can also be applied to the cash down payment you have to fork out when you take out a bank loan for an HDB, or when you purchase a private property. Furthermore, putting down monthly rentals could be cheaper than the costs of home ownership up to a certain year.
A property consultant we spoke to mentioned that vacancy rates have been rising and rental rates have been falling - a great opportunity for rental hunters like you to swoop in. Many apartments are also fully furnished and it allows you to ‘test water’ before committing to a home purchase. The low-risk, low-commitment nature of rentals should appeal to the younger independence fighters, and a Redditor by the username ‘petit_four’ pointed out that you may still save for a permanent home with your leftover income after renting a place to stay.
So if you do decide to rent, do your due diligence on property portals and consider other non-price factors like location, nearby amenities and proximity to your workplace or city centre.
Cost: Depending on the neighbourhood and size of the flat, expect to set aside at least $550 per month for a room. Alternatively, you could round up a couple of your single pals and rent an entire three- or four-room flat. That should set you guys back between $1,800 and $2,500 per month.
Joint Condo Purchase With Fellow Singles
Singaporean singles who prefer to buy have no choice but look into condominiums. There has been a revival of interest in private properties in recent times, leading many to speculate that prices have bottomed out. Even so, entering yourself into the highly desirable stratosphere of owning a condo while being barely 35 at that requires you to jump through some pretty tricky hoops. Actually, the hoops mainly revolve around money. Another property consultant we spoke to revealed that the cheapest condo unit you can get your hands on starts between $500,000 and $600,000 onwards, and they are usually one-bedroom or studios located at far flung corners of Singapore.
Assuming the apartment in question is a $500,000 unit at Alps Residences in Tampines, the 20% down payment would require $25,000 in cash and $75,000 in CPF. Together with S$9,600 in buyer’s stamp duty and $2,300 lawyer’s fees, your total upfront payment is about $119,000.
If you are going about this alone and you belong to the middle-income demographic, this could prove to be a huge stumbling block. Moreover, a Singaporean Redditor by the username ‘inno7’ pointed out that youths who just started working would probably have insufficient savings to buy a house.
Therefore, we sincerely hope you have like-minded friends with similar financial capacity, because there is strength in numbers, right? When the initial down payment is split between two to three occupants, the barrier to entry becomes a lot easier to surmount coupled with the fall in private property prices.
P.S Don’t say that we didn’t warn you, but if you or one of your friends suddenly decide to tie the knot, it would be difficult to go back to HDBs.
Cost: If the bunch of you bachelors/bachelorettes aren’t fussy about location (e.g. Punggol, Choa Chu Kang) and size as much as you are about the price, you can find two-bedroom condo units between $600,000 and $800,000. Don’t forget to factor in monthly maintenance fees and mortgage to determine if the apartment is truly within your means.
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