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Properties in Singapore do not come cheap, and the buying process is relatively long and tedious too. Hence, many Singaporeans choose to live with their parents even after they are married. Sure, the Singaporean government does provide subsidies for first-timer home buyers of HDB flats, but if you choose to rent a home, then that’s a separate story altogether.
Renting a 1BR could cost at least $1,500 despite it being far away from the city centre. The closer you get to Orchard or the CBD district, the more expensive you can expect your rent to be. Despite so, it has been observed that rental prices are steadily decreasing, which may be great news for those who wish to move out as soon as possible.
However, is this a wise move to make? Stay tuned as we’ll be comparing both sides of the coin, whether you should rent or buy a property in Singapore.
Financial commitment
Buying: Long term, usually spanning a 25–30-year home loan.
Renting: Short term, minimally 3 months.
Buying a house in Singapore is a huge financial commitment that many end up paying for throughout their work lives. Renting however, places less of a financial burden in the short run as you do not need to pay large down payments or long-term mortgage payments. Your upfront payments are likely to equate to just 1-2 months’ worth of rent.
For Singaporeans who want to move out asap, while not being tied to a mortgage, renting is a good option especially if you have family to fall back on during hard times since you can always move back home.
Flexibility
Buying: Little flexibility, as it takes time and effort to sell and buy another property.
Renting: High flexibility, easy to find another place to rent.
As a renter, you have greater flexibility of moving whenever your lease is up. If you’ve just switched jobs, or got into a squabble with your neighbours, you can always leave. You can also start by renting a small and cheap place, then upgrading when your income increases.
Home buyers on the other hand, have less flexibility. They’ll have to pay off their home loans and sell off their existing unit first. Then, go through the tedious flat buying process to move onto another property.
Affordability
Buying: Requires down payment, though you can use your CPF monies to cover part of it.
Renting: No down payment, and monthly rent payments. May be cheaper in the short run.
Home buyers undergoing the BTO process and has been handed a successful ballot, will be required to pay a down payment of 10% of the unit price to secure the unit. Even purchasing other property types such as resale flats, condos, etc. require a large upfront down payment.
Hence, renting may be a better option for singles who just want to move out and experience independence, or even couples who are not yet ready to settle down. Not only is it a cheaper arrangement, but also provides more flexibility.
Maintenance obligations
Buying: Owner is responsible for all maintenance (except HDB issues like cracked tiles, etc)
Renting: Depends on rental contract. Typically included in rent and handled by landlord.
Tenants generally have lesser responsibilities when it comes to the maintenance of the property. All you’ll be responsible for likely include keeping the place clean, neat, and tidy. Anything out of this scope such as the maintenance of your rental unit’s aircon, plumbing, etc. will be handled by your landlord.
Availability of properties
Buying: Low. Need to ballot and may need to wait up to 5 years for new properties (condos, HDB BTO) apart from homes in the resale market.
Renting: High. Many rentals are in “move-in ready” condition.
The process of owning a home in Singapore is a very tedious one especially if you’re going through the BTO route. If you’re urgently looking for a place, then we will recommend buying a second hand/resale flat or opt for a rental apartment temporarily. Rental units usually allow you to move in immediately and the lease is generally short-term or negotiable according to your length of stay.
Who should rent?
Singles – If you have a stable income and want to get a taste of independence by living on your own, renting is a great way to keep the expenses low.
Looking for short-term accommodation – Renting while your current home is undergoing renovations is a good way to keep additional costs at bay. (No need for booking of hotels or expensive service apartments)
Couples not yet ready make the big purchase – Haven’t decided if you want to get married or buy a house together? Then renting is the best alternative to experience living together with your other half without nosy parents of siblings to interrupt your time together.
If you have tons of overseas work commitments – Frequent flyers may consider migrating overseas if they find a place that particularly appeals to them. Also expatriates who are temporarily in Singapore for work may not want to be tied down by a huge purchase.
Prefer the nomadic lifestyle – Maybe you just prefer home-hopping and you move regularly.
Who should buy?
Couples looking to settle down and start a family – You’ll want a place to call your own before starting your own family or getting married. Hence, opting for the BTO process of purchasing a condo may be your go-to if you’re not in a hurry.
People with lots of CPF – Looking to purchase a flat with your CPF as an investment? With all the grants, your CPF could potentially cover all costs and result in no cash outlay for you. You can freely sell/rent the entire flat once the minimum occupancy period is up too!
Plans to stay long term in Singapore – Looking to stay put in one place for the long term? Then purchasing a property to settle down would be your best bet!
