How To Buy A House in Singapore: A Complete Guide

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Guide How To Buy A House in Singapore | SingSaver

A comprehensive list of questions you might ask as you look to buy a house in Singapore.

If the American Dream is a house with a white picket fence, 2.5 kids, and a dog, then the Singapore Dream is to own your own property – at all.

Singapore still ranks as the second priciest housing market in the world with the average price of property in Singapore hitting US$874,372 (approx. S$1,183,025). However, thanks to extensive government measures in the form of market regulation and financial grants, most Singaporeans can still afford to own a home – specifically, the 2018 home ownership rate in Singapore was 91%.

In fact, a surprising find from PropertyGuru’s H2 2018 survey found that most Singaporeans are satisfied with the current housing market, and 1 in 4 millennials are actually able to move out of their family home before the age of 27.

Here are the basics of what you need to know about home ownership in Singapore:

Who can buy a house in Singapore?

There are 3 main types of properties in Singapore:

  • HDB flats
  • Private properties
  • Executive condominiums (ECs)

To buy a HDB flat, you must be a Singapore Citizen or a Permanent Resident (PR) – foreigners are not eligible to buy HDB flats.

Singapore Citizens and PRs are free to purchase any type of private properties (including apartments and landed bungalows) and ECs, but do take note of certain restrictions regarding ownership of HDB flats.

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What types of properties can foreigners buy in Singapore?

Foreigners can purchase private properties such as apartments and condominiums, but will need government approval to buy landed properties like bungalows.

Foreigners can only buy executive condominiums that are a minimum of 10 years old.

Foreigners cannot purchase HDB flats in Singapore.

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At what age can you buy a house in Singapore?

To purchase a resale HDB flat, the minimum age is 21 years old, provided that you are purchasing as part of a family nucleus. The nucleus can include:

  • Spouse and children
  • Parents and siblings
  • Children under your legal custody (if widowed or divorced)

If you are purchasing a resale HDB flat as a single person, the minimum legal age is 35 years old if you are unmarried or divorced, and 21 years old if you are widowed or orphaned.

Read more: How to Save Money for a Flat Before Your 35th Birthday

To purchase private property, the minimum legal age is 21 years old. However, there are cases where a purchase can be made under a trust if the property owner is under 21.

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Can singles buy HDB flats?

Yes, singles can buy HDB flats. There are certain criteria to be met, depending on which scheme you are applying under. Generally, you will need to be a Singaporean Citizen (single PRs are not eligible to buy HDB flats, resale or otherwise) and at least 35 years old.

Read more: What Type of HDB Flats Can Single Singaporeans Buy?

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What is an essential occupier for HDB?

According to HDB, an essential occupier is defined as “one who forms a family nucleus with the applicant to qualify for a flat from HDB”. An essential occupier is required as part of the application process for Built-To-Order (BTO) and Sale of Balance Flats exercises.

More importantly, an essential occupier as listed in the flat application must physically and continuously occupy the flat during the 5-year occupation period. If this criterion is not fulfilled, HDB can cancel the application and forfeit your deposit(s).

Only Singapore Citizens and PRs can be listed as essential occupiers.

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How much does it cost to buy a house in Singapore?

The actual cost of a home in Singapore will vary based on many factors, including the maturity of the estate, proximity to amenities, type and age of the property, and condition of the unit. The average price of property in Singapore in 2018 was US$874,372 (approx. S$1,183,025).

It is important to note that in addition to the actual price of the property, there are additional expenses that go into becoming a homeowner. Examples include legal fees and stamp duties, maintenance fees (conservancy fees), home insurance, and more.

Read more: How Much Do You Need to Buy Your First Home in Singapore?

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How much bank loan can I borrow to buy my home?

How much you can borrow depends on whom you’re borrowing from, not what property you’re buying.

If you are buying an HDB flat, you can apply for an HDB Concessionary Loan. The maximum Loan-To-Value (LTV) ratio for HDB home loans is 90% of the property value or selling price, whichever is lower. The remaining 10% downpayment can be financed with cash and/or your CPF savings.

If you are buying an HDB flat and, for whatever reason, do not qualify for an HDB home loan, you can choose to take a private bank loan. The LTV ratio for private bank loans is 75% of the property value or selling price, whichever is lower. The remaining 25% is split into 20% which can be paid using cash and/or your CPF savings, and a 5% compulsory cash component.

If you’re thinking of applying for a home loan, remember to compare the best loan rates available on a financial comparison site like SingSaver.

Compare Best Home Loans | SingSaver

Read more: How Much Can You Borrow For Your Home Loan?

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What is HDB Concessionary Loan?

HDB offers housing loans at a concessionary interest rate to flat buyers (not applicable to Executive Condominiums). The loan is subject to eligibility conditions such as income, age, family members, and more. It is also subject to the Loan-To-Value (LTV) limit and your Total Debt Servicing Ratio (TDSR).

Read more: How to Qualify and Apply for an HDB Loan?

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Can I use all my CPF savings to buy an HDB flat?

The amount of CPF Ordinary Account (OA) savings you can use is subject to the CPF housing limits, namely the Valuation Limit (VL) and Withdrawal Limit (WL).

The VL refers to the valuation price or purchasing price of your HDB flat, whichever is lower. You can use your OA savings to finance up to the VL of your flat. If you would like to request to withdraw more of your OA savings, you can – but you must first ensure that you fulfil the Basic Retirement Sum (this amount varies depending on which year you turn 55).

The WL is 120% of the VL. This is the absolute maximum amount of OA savings you can use to finance your flat. Anything above the WL will have to be funded by cash.

You can use this CPF Housing Withdrawal Limits Calculator to help you estimate when you will reach your CPF withdrawal limits for housing.

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Can private property owners buy HDB flats?

As of 2010, private property owners must sell off (“dispose of”) all their private properties (local or overseas) within 6 months of purchasing a resale HDB flat.

Private property owners who are interested in a BTO flat must first dispose of all their private properties at least 30 months before they apply for a BTO flat. This translates to a pretty long waiting time in between homes.

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Can I own more than one property in Singapore?

There is no limit to the number of private properties you can own as a Singapore Citizen or PR.

HDB owners who wish to purchase private property can only do so after the minimum occupation period of 5 years. This means that if you want to own both an HDB flat and private property, you must first purchase an HDB flat and occupy it for at least 5 years before investing in a private property (local or overseas).

You cannot own more than one HDB flat. If you purchase a second HDB flat, you must dispose of the first within 6 months of the second purchase.

Ownership Restrictions for HDB flats
Criteria Details
Income ceiling There is no income ceiling for buying an HDB resale flat. However, you may wish to note that there are income ceilings for CPF Housing Grants and HDB housing loans.
Ownership/interest in HDB flats If you or any persons listed in the application owns an HDB flat, you must dispose of the HDB flat within 6 months of the resale flat purchase.
Ownership/ interest in property in Singapore or overseas other than HDB flats If you or any person listed in your resale flat application owns a private property either locally or overseas, you must dispose of all private properties before or within 6 months of the resale flat purchase.

Note: If you own a private property, you are not eligible for a CPF Housing Grant or an HDB housing loan.

Source: Housing & Development Board

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