What Is Involved in Buying a House in Singapore? | Singapore homeownership is very different from other parts of the world. Although it’s considered one of the more costly places to own a home, Singapore also has specific conditions in which a person can make a purchase. For one, foreigners cannot buy just any property; it has to be registered as a private building such as an apartment, and they need governmental approval beforehand.
If you are looking to buy a house in Singapore, you’ve come to the right place. Here is everything you need to know about the process and requirements to purchase a home in this Southeast Asian region.
Determine Your Needs
In Singapore, there are only three property types that can be bought. This includes public housing, housing development (HD), and executive condominiums. Public housing and HD are government-owned properties that can be sold to low-income families, while executive condominiums are a hybrid of public and private property. As a low to medium-income family, you can also apply for a government grant that will substantially lower the amount you need to loan from the bank.
Understanding your needs and wants for buying a house is the first step to property investments in Singapore. For example, executive condominiums have a minimum of five-year occupation rules, which state you have to live in the property for that time before you can sell it. For foreigners, this becomes more difficult because you have to wait for 10 years after construction before purchasing any type of property. If you are looking for more affordable options then Singapore’s HDB apartments are quite popular.
Age and Financials
The rules for the housing market in Singapore mandate that anyone over the age of 21 can apply for public housing or private property. In public housing, you also need to be married, and if you are single or divorced you can only apply when you are 35 years of age. This can be quite a wait if you are a young professional looking to buy your first home.
Next, you must be able to get together a down payment of 10% of the property value; however, the other 90% can be financed through the loan-to-value system for HDB housing. The tax you pay will also be determined by which property you buy, and which area of Singapore you’re in. For foreign buyers, you will pay a flat 20% in additional taxes on top of rates and refuse removal. Singaporean citizens will only pay between five and 15%. There are legal and closing costs to consider, as you will need to hire a lawyer to draft the papers and cover the transfer costs.
It can be to your advantage to take a mortgage in Singapore for a new house. The rate of inflation is much higher than interest rates, so you will end up paying less if you can take a loan for the majority of the property value, rather than putting a large down payment forward. Singapore is one of the most diverse and exciting countries to live in, but their housing industry works just a little bit differently from the rest of the world.
The average Singapore mortgage rate is about 2.6%, which is considerably lower than most economies. For better advice about purchasing a home in Singapore, as well as information on the different Singapore mortgage rates, consult Property Guru. They are there to answer all of your home purchasing questions and can offer competitive interest rates on mortgages. No matter what type of property you want to buy, Property Guru in Singapore has everything you need and more.
Agents Are Critical
Buying a house in any part of the world takes time, a lot of paperwork, and patience. You need to consider hiring an agent that can help you look for affordable homes in the right area of the country. A realtor will know the ins and outs of every single process, so you won’t have to worry about it too much. They will show you the homes that suit your financial capabilities and needs, and guide you through the bank application process, all the way to the end of your purchase.
Estate agents are not only trained in finding you a good home; they understand the financial requirements and regulations that are involved in buying a house in Singapore. The agent’s fee is also quite low at about one percent in this Asian region, which is much less than other agents around the world.
Buying a property in Singapore doesn’t have to be a challenge that you cannot undertake. It just takes some research and understanding of the property laws and the type of home you would be eligible for. Owning a home is a long-term commitment and it can be more expensive than renting a property, so look at all the logistical factors before you jump in head first.