Your search results

Want To Buy A Property? Read Me First!

Posted by Jayson Ang on December 7, 2022

| 0

TLDR

Understanding the key factors involved in buying property in Singapore is crucial for making informed decisions. Consider your investment objectives, financial capabilities, and market conditions before diving into house hunting. Evaluate the property based on location, entry price, and urban transformation potential. Stay updated on market trends, housing policies, and urban development plans to make sound investment choices. Proper research, financial planning, and prudent decision-making are essential for a successful property investment journey.

Buying on impulse is seldom a good idea. And for a big-ticket item like a property, entering the market without doing in-depth research and analysis is downright unwise. No matter how good the investment opportunity may seem to be, it is not advisable to go in blind, so to speak. In fact, if it is too good to be true, all the more it warrants a deeper look.

So, where do we start?

Before you embark on house hunting, consider this: why am I buying this property? It sounds simple enough, and it is good to be clear-minded about why you are entering the property market.

For instance, do you plan to move in yourself, or do you intend to rent it out, if you own an existing property, what are you going to do with it?

If you intend to hold on to your existing property, be prepared to pay the additional buyer’s stamp duty (ABSD) on your second property purchase.

Be Realistic, Be Prudent

Next, what is your budget – what can you realistically afford and what would be somewhat of a stretch?

Proper financial planning and building in a financial safety net is absolutely critical because properties are illiquid and cannot be sold quickly when you are in a bind. Should you fall on hard times and need to sell or rent your unit desperately, you can be certain that it will not fetch an attractive price/rent.

Prudence is also key. If you think you can comfortably afford a $1.4 million condo, you may still not want to max out that budget, because there are other costs to consider, including the ABSD for second property (at 12% of the property price for Singaporean buyer), legal fees etc.

Then, there is the matter of home financing. Do note that the Total Debt Servicing Ratio (TDSR) of 60% and prevailing loan-to-value (LTV) limits will affect the amount you can borrow to fund your home purchase. If you already have an existing home loan, the LTV drops to 45% (or 25% if the loan tenure is more than 30 years or extends past age 65).

Remember this: property investment is a mid- to long-term commitment, make sure you have the financial holding power to tide over least 3 to 5 years.

Key Criteria When Evaluating Property Buying Opportunities

So, you have sorted out your investment objective, evaluated your financial position, and considered the possibility of using leverage, now what? Well, here comes the research and analysis.

There are a lot of information and data out there about the Singapore property market and its performance. Follow the news closely, as well as announcements regarding housing policies and urban development. Do not be swayed by emotions when it comes to property purchase; always do sufficient homework as savvy investors do.

There are 3 important criteria in evaluating property investment opportunities. It is important that each of the 3 factors are considered thoroughly as they could impact the property’s rentability and capital growth potential in the future.

1. Location

In real estate, location is paramount. Location influences desirability of the property, and this desirability then helps to boost demand, and high demand will drive pricing.

These are some main factors to think about when it comes to location:

Central or outskirts: Is it in the city, at the city fringe, or is it in the suburbs?
Transportation and accessibility: How far is the property to an MRT station or the bus interchange and bus stop? Is it easily accessible to main roads and the expressway?
Neighhourhood: What are the amenities available around the property? Are there shops and food places, supermarkets, or recreation facilities such as parks or sports hall?
Schools: What are the schools in the area? Would you consider enrolling your child to any of the schools nearby? (Note: When you enrol your child to primary school in Singapore, if the chosen school has more applicants than vacancies, priority admission will be given based on your child’s citizenship and the home-to-school distance)
Lot/unit location: Is it on a high floor? Does the unit face the main road, or the bin centre, or does it face the pool or a park?
Mature or non-mature estate: Consider whether there are other development sites in the area which could mean more supply of units and potential competition for buyers and tenants when you plan to sell or lease your units in the future
Population catchment/hinterland: How big is the estate and is it in or near a regional centre where there are lots of business and commercial activities?

2. Entry Price

This relates to whether you are buying the property at market rate, below market price, or are you overpaying compared to the surrounding properties?

Overpaying will limit the upside potential, if you had substantially overpaid for a property, your future capital gain may be low or even nil – unless the property market runs up significantly over a period of time.

So, be sure to assess your entry price against the recent transacted prices of comparable properties in the vicinity, as well as the prices of transacted units within the same development.

Find out if the prices or rents of nearby properties have been climbing over the last few years, and whether the prices have gone up markedly since the project was launched?

If you are looking at a new launch project, at which stage of the launch are you buying into? Developers tend to offer star-buys at the initial stage of the launch to get the sales momentum going. You may end up paying slightly more for a unit – compared to those who bought in the first weeks of a project launch – if you buy at a later stage when the developer has already sold more than 70% of the units in the development.

3. Urban Transformation

Get acquainted with the Urban Redevelopment Authority’s Master Plan, which is a statutory land use plan that guides Singapore’s development over the next 10 to 15 years. Among many things, it shows the permissible land use, development densities, and urban transformation plans in Singapore.

If you have shortlisted some potential properties to invest in, be sure to consult the Master Plan on what are the upcoming plans for the area.

For instance, is there a vacant plot nearby that has been zoned for commercial use but is yet to be developed? Will the property benefit from large scale urban renewal/transformation initiatives, such as the Greater Southern Waterfront, or the second CBD in Jurong Lake District, or the development of Woodlands as a regional commercial hub? All these will likely have a positive impact on capital values over the long-term.

All property purchases carry some form of risks, but having done the necessary site and entry price evaluation and proper financial planning, you are likely on your way to a smoother investment experience. ??

You May Also Like …

All Buying Tips Opinion

Why One Family Chose a New Launch 4-Bedroom Unit at Lentor Mansion Over a Resale Condo

Jayson Ang – March 18, 2026

TLDR NM’s family chose to buy a 4-bedroom unit at the new launch Lentor Mansion despite elevated condo prices, after...

All Reports

Transaction Volumes Remained Subdued Due To The Dearth Of Inventory In Q4 2022

Jayson Ang – March 27, 2023

TLDR The Urban Redevelopment Authority (URA) Flash Estimates for Q4 2022 show a 0.1% increase in non-landed private home prices...

Mandarin Top 5

Singapore’s Real Estate Market: The 5 Most Important Documents to Review Before Buying a Property

Jayson Ang – March 26, 2024

Singapore's real estate market is highly regulated and can be complex for those unfamiliar with the process. As a prospective...

All Buying Tips Selling Tips

The Emergence of Million-Dollar HDB Flats in Singapore: Could This Become the Standard Moving Forward?

Jayson Ang – July 28, 2024

TLDR Understanding the nuances of the HDB property market in Singapore, especially the trend of million-dollar flats, requires a deep...

All Blog Posts Opinion

Discover the 7 Unique Attributes of Real Estate Investing

Jayson Ang – January 16, 2023

TLDR The post highlights the benefits of investing in real estate, such as high leverage, capital appreciation, income generation, usability,...

Mandarin Top 5

5 Pros of Buying a New Development

Jayson Ang – March 3, 2024

Deciding whether to buy a new development or a resale property can be a challenge. In the next few video...

Mandarin Top 5

5 Cons of Buying a New Development

Jayson Ang – March 4, 2024

Luxury properties in Districts 9 and 10 of Singapore are highly coveted, and for good reason. From stunning views and...

Mandarin Top 5

Retiring in Singapore? Here’s Where to Find the 5 Best Property Investments for Comfort and Security!

Jayson Ang – March 22, 2024

Retirees have unique needs when it comes to property investments. They require properties that offer comfort, security, and easy access...

All Opinion

Why Aren’t Spacious, Wallet-Friendly Homes Our Reality Yet?

Jayson Ang – April 17, 2024

TLDR The article discusses the current housing market in Singapore, focusing on the challenges faced by individuals like Sherlyn Tan...

Mandarin Top 5

Top 5 : Potential Risks Should Be Considered When Investing Property Within Singapore’s Competitive Real Estate Markets

Jayson Ang – December 27, 2024

Singapore, a bustling financial hub in Southeast Asia, has seen its real estate market flourish over the years. The city-state's...

Mandarin Top 5

Top 5 Bakeries in Singapore for Fresh Bread and Pastries

Jayson Ang – May 6, 2024

Singapore, a melting pot of cultures and flavors, is well-known for its diverse culinary scene. Among the many gastronomic delights...

All Opinion

What Is The Cost Of Constructing A Landed Property In Singapore?

Jayson Ang – February 24, 2025

TLDR Building a landed property in Singapore can be a costly endeavor, with prices ranging from $300 to $500 per...

All Buying Tips

When to Strike Gold: The Ultimate Guide to Selling Your House in Singapore!

Jayson Ang – June 28, 2024

TLDR When deciding the best time to sell your property, consider various factors such as market trends, financial goals, and...

Mandarin Top 5

Top 5 Reasons : Why Investing In Singapore’s Property Market Is Recession-Resistant

Jayson Ang – August 15, 2024

Singapore's property market has long been considered a safe haven for investors, even during times of economic uncertainty. The city-state's...

Mandarin Top 5

The Psychology of Property Investing: 5 Reasons Why Singaporeans Love Real Estate

Jayson Ang – May 4, 2024

Real estate investing has always been a popular way to grow wealth and secure financial stability. In Singapore, the love...

Mandarin Top 5

Top 5 Instagram-Worthy Spots in Singapore

Jayson Ang – February 21, 2024

Singapore, a beautiful city-state known for its stunning architecture, lush greenery, and vibrant culture, is a photographer's paradise. The island...