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 …

Mandarin Top 5

Top 5 : Key Reasons to Invest in Industrial Property in Singapore

Jayson Ang – February 15, 2025

Singapore, a small yet densely populated country, has emerged as a significant player in the global industrial property market. Its...

All Blog Posts Buying Tips Opinion

A Executive Summary Guide to the Singapore Real Estate Market 2023 and Beyond …

Jayson Ang – December 10, 2022

TLDR The Singapore real estate market is vibrant, driven by a strong economy, stable business climate, and attractive investment opportunities....

All Buying Tips

ANALYSIS: Unveiling the HDB Towns with the Steepest and Lowest Price Surges!

Jayson Ang – August 17, 2024

TLDR The real estate market for HDB flats in Singapore has witnessed significant growth, with prices reaching new highs. The...

Mandarin Top 5

Singapore’s Luxury Real Estate Market: The 5 Most Luxurious Neighborhoods

Jayson Ang – May 14, 2023

The 5 most expensive neighborhoods in the city, and are home to some of the most exclusive and opulent properties...

All Buying Tips

Your Key to a Happy Retirement in Your HDB? Let’s Unveil The Mystery Behind the Lease Buyback Scheme!

Jayson Ang – March 30, 2024

TLDR The Lease Buyback Scheme (LBS) is gaining traction among older Singaporeans looking to boost their retirement income by selling...

Mandarin Top 5

Top 5 Reasons : Why Investing in Singapore’s Property Market Is a Smart Move for Millennials – Expert Analysis!

Jayson Ang – October 13, 2024

In recent years, Singapore has emerged as a global financial hub and a prime destination for property investments. The city-state's...

All Buying Tips Opinion

My 6 Factors to Consider When Buying a Property in 2023

Jayson Ang – March 11, 2023

As the housing market shows no signs of slowing down, many of us may feel left behind, questioning whether it...

All Buying Tips

Thinking About Investing In An Old Landed Property In Singapore? 7 Crucial Tips To Keep In Mind Before You Make Your Move

Jayson Ang – April 8, 2024

TLDR Older properties come with unique challenges due to outdated design elements, potential roofing issues, odd land shapes, basement drawbacks,...

Mandarin Top 5

Top 5 Must-Do Experiences in Singapore for First Timers

Jayson Ang – January 18, 2025

Singapore, a vibrant city-state known for its diverse culture and rich history, offers an array of unique experiences for first-time...

Mandarin Top 5

Top 5 Factors : Buying Resale vs New Launch Property in Singapore: Which is Better?

Jayson Ang – November 3, 2024

The decision to invest in a property in Singapore can be both exciting and daunting, especially when faced with the...

All Buying Tips Opinion

Are Early Bird Discounts At New Launches Genuine Or A Marketing Gimmick?

Jayson Ang – November 20, 2023

TLDR When considering investing in new property projects, understanding developers' pricing strategies is crucial. Early bird discounts are not just...

Mandarin Top 5

Experience Singapore’s Best: 5 Districts with Unmatched Access to Shopping, Dining, and Entertainment

Jayson Ang – February 23, 2024

Here are my top 5 picks for districts in Singapore that offer easy access to some of the best shopping...

All Blog Posts Buying Tips

A Step-by-Step Guide To Upgrading From an HDB Flat To Your a Private Property

Jayson Ang – January 3, 2023

TLDR Understanding the complexities of upgrading from an HDB flat to a private property in Singapore involves selling your HDB...

Mandarin Top 5

Top 5 Reasons : Why Singapore’s Property Market Is the Best Place to Invest for Long-Term Growth – Expert Analysis!

Jayson Ang – June 9, 2025

TLDR Singapore’s property market stands out for long-term investment due to its strong economy, stable government policies, high rental demand,...

Mandarin Top 5

Top 5 : Long-Term Economic Impacts Of Foreign Real Estate Investment In Singapore’s Luxury Condo Market?

Jayson Ang – December 19, 2024

Singapore has long been a preferred destination for foreign real estate investors, particularly in the luxury condo market. The city-state's...

All Buying Tips

Integrated Developments: Do They Live Up to the Hype? Check Out These Five Factors

Jayson Ang – March 3, 2024

TLDR Integrated developments in Singapore offer a one-stop solution for residents by combining residential, commercial, and transport elements in one...