Singapore Property Market Outlook 2022: 6 Trends to Watch

Just as we’re ending the first half of 2022, we’re seeing the highest inflation we’ve seen in the last 10 years. The rising prices of food, electricity, petrol, and transport are hitting consumer wallets hard.

For current or would-be homeowners, that begs the question: will property prices continue to surge? Is now a good time to cash out or buy?

We took the opportunity to catch up with our team of senior property advisors on Singapore’s property market outlook for 2022. Here are the trends we’ll be watching out for through the 2nd half of the year.

A Quick Summary of 2021 – 2022

2021 was a great year for property, with private property prices jumping by 10.6% and resale HDB flats by 12.7%.

But why did the property market do so well last year? Let’s recap:

1. High Domestic Demand

In 2021, we saw:

More people shifting to hybrid work arrangements and wanting larger homes as a result
BTO and new launch condo delays pushing people into the resale market
A willingness to pay a premium for more square footage, or just to have their own space given that everyone was trapped at home

2. Low Interest Rates Made It Attractive to Borrow More

The threat of COVID-19 still loomed large last year, and governments were hesitant to do anything that might threaten their already-fragile local economies. Part of that meant keeping interest rates near zero.

The result? It was cheaper than ever for the average consumer to take on a loan.

On top of that, many investors also took on debt to purchase assets like equities – and 2021 was one of the best years ever for the stock market. The returns they generated went back into the market, fueling asset prices even more.

3. Now, Both Sales and Rental Prices Are at Record Levels

This confluence of factors led to the sharp spikes in real estate pricing, bleeding into the rental market as well. In the first half of 2022, we saw the trend continue even as the restrictions lift and life returns to normal.

But the tide is already turning. The factors that fed the price growth last year are diminishing – and in some cases, reversing.

6 Trends to Watch Out for in the 2nd Half of 2022

Here’s what we predict may happen:

1. Property Prices Are Likely to Keep Going Up, but More Slowly Than in 2021

With many companies allowing WFH, the desire for more space hasn’t changed. About 31,000 HDB flats are coming off their Minimum Occupation Period (MOP) this year, and we expect a good percentage of those homeowners to look into upgrading.

But with the market currently at a high, demand is likely to come from those upgrading from their current properties rather than those buying a home for the first time.

Those upgrading will be buying high, but also selling high – whereas those hoping to buy their first homes won’t have the advantage of asset appreciation to fund their purchases.

Compared to the 10.6% price growth for private property we saw in 2021, analysts predict that we might only see 1% to 4% for private property this year.

2. Owner-Occupiers Will Continue to Fuel Most of the Demand

Like last year, owner-occupiers may make up the majority of buyers in 2022.

That’s because the recent cooling measures (like the ABSD hike) affect foreigners and speculative buyers the most. Those buying for their own stay won’t really feel the impact of the property cooling measures.

On top of that, inflation and rising mortgage rates may dampen speculative buying. Singapore has always taken its cue from the US Federal Reserve. As the Fed increases rates, local home loan interest rates follow suit:

That means investors will need a lot more capital to fund a property purchase. Also, those buying at a high may worry about whether – or when – they’ll be able to offload the units for ample capital appreciation.

When we’re marketing multiple resale units in the same development, for example, we now see a lot less demand for studios and 1-bedroom units compared to 3-bedrooms. In the past, these studio and 1-bedroom units received a lot more interest from those buying a 2nd or 3rd property for investment or rental income purposes.

3. Buyers Will Be Driven Into the Resale Market

Similar to 2021, we may see a waterfall effect as BTOs and other construction delays continue to weigh on supply shortages.

Continued BTO Delays, Fewer New Launches

To date, 58 BTO projects (less than 60%) have been delayed by 6 months or more.

Although HDB plans to launch 23,000 flats yearly in 2022 and 2023, the situation remains volatile due to the continued supply chain disruptions and the re-emergence of COVID-19 in other parts of the world.

We’re also expecting fewer new condos in 2022, with most of them slated as 99-year leaseholds.

Still, demand remains high. Over 75% of the units in the recent Liv@MB launch sold within the first weekend. Two weeks prior, Piccadilly Grand sold 77% of its units on launch weekend.

Buyers wanting freehold – or hoping to move into the new place within the next year or so – will have to look at the resale market instead. Those who can afford ECs or private condominiums will consider these in comparison to resale HDBs, especially when taking into account higher COVs.

With demand growth outpacing supply, our property advisors believe prices won’t pare off until there’s a marked increase in supply. This will more likely happen in 2023 at the earliest, especially taking into account HDB’s commitment to increase BTO launches.

4. Rental Market Rates Will Remain High

With all these market forces at play, rental market prices are likely to remain high.

That said, we think rental prices will also stabilise and grow at a slower rate. Border controls are easing and leases that were signed during the 2020-2021 lockdowns are starting to expire. We’re now seeing a greater supply of for-rent units, though demand also remains high with all the construction delays.

The government has also highlighted that there continues to be a labour shortage across industries, with unfilled jobs in Q1 2022 almost double from the same period in 2021. A corresponding increase in foreign workers and expats will bolster rental prices.

5. More New Record Prices for Older Flats (Premium for Space)

2022 has been a year of record-setting sales.

In May, we saw a 4-room HDB at Pinnacle@Duxton sell for S$1.228 million: the highest transacted price on record for a 4-room flat. This is just a month after a 5-room unit in the same development sold for S$1.228 million as well.

In the same month, a 4-room flat at Henderson Road transacted at S$1.4 million. Just last month, flats in Pasir Ris and Woodlands also saw transactions above the S$1 million mark.

With many employees preferring to WFH, buyers will favour older flats over newer but smaller ones. (The average 4-room flat these days is around 86 square metres – compared to the 142 square metres of an Executive Apartment.)

Our analyst believes that the recent records for older 5-room HDB flats will set a new benchmark. The scarcity of jumbo HDBs and Executive Apartments (both no longer in production) will keep the premium for space high.

6. More Foreign Buyers in the Luxury Property Segment

Chances are that we’ll continue to see high demand from foreign buyers, especially in the luxury property segment. Singapore’s positioning as a tax haven and regional business hub with first-world infrastructure continues to make Singapore a popular outpost for wealthy family offices.

Geo-political tensions, both in the region and internationally, will continue to drive capital in a ‘flight to safety’ towards Singapore’s investment-friendly environment. In Q1 this year alone, Singapore’s Capital and Financial Account saw a balance inflow of S$76B – the highest ever on record.

The 2022 Guide for Foreigners Buying Property in Singapore

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As the world opens up again, more investors are looking towards the Asia-Pacific for diversification, yield, and growth.

It’s not surprising that Singapore, in particular, stands as an attractive hub for foreign investment. With its first-rate infrastructure, political stability, and favourable tax policies for both businesses and foreigners, the city-state is a safe haven for investors.

After all, Singapore has seen an unprecedented rise in property prices since 2006. Even with the 2008 Financial Crisis, COVID-19 epidemic, and several rounds of property cooling measures from the government, prices have continued their upward trend:

So it’s no wonder that both locals and foreigners alike see Singapore’s property market as a good hedge against inflation.

In this guide, we’ll cover:

Can foreigners buy property in Singapore?
1. What kind of real estate can foreigners buy?
2. What about land or landed property?
Rules for foreigners buying property in Singapore
1. Home loans and LTV limits
2. Taxes
Potential pitfalls
What to know about the Singapore property market in 2022

Can Foreigners Buy Property in Singapore?

In short: yes. Although the local government policies favour citizens, you don’t need to be a Singapore citizen or permanent resident to buy property in Singapore.

There are restrictions as to what you can buy as a foreigner, though. Eligibility also depends on whether you’re married to a Singaporean citizen or PR, and whether you’re seeking to buy private or public housing.

Public housing, which includes HDB flats and Executive Condominiums (ECs), have the most restrictions for foreigners.

What Kind of Real Estate Can Foreigners Buy?

Currently, the private residential property foreigners can buy include:

Private condominiums
Strata landed houses in an approved condo development
Leasehold estates in a landed residential property for a term of <7 years

Private condos tend to be the property of choice for foreigners because they have the fewest restrictions and are widely available.

Strata landed houses in condo developments are also rare and typically only seen in older estates.

Foreigners who become permanent residents in Singapore can also purchase public housing such as resale flats and Executive Condominiums (ECs). However, you’re subject to an income cap as well as stipulations on marital status and overseas property ownership. You can find detailed eligibility requirements on HDB’s website.

Can Foreigners Buy Land or Landed Property in Singapore?

Generally no – you’ll have to get approval from the Singapore Land Authority (SLA) if you wish to do so.

The SLA will assess your request on a case-by-case basis. Approval depends on factors like:

The depth of your ties to Singapore (e.g. whether you’re a PR and how long you’ve been there)
Whether you’ve made an exceptional economic contribution to the country

Sentosa Cove is the one exception. If you want to buy landed property there, you’re much more likely to get fast-tracked approval. Just note that the properties there are leaseholds and have a reputation of being hard to resell.

Rules for Foreigners Buying Property in Singapore

For the most part, Singapore property laws are favourable for foreigners with a longer-term view. For instance, it’s legal to give your property away (say, to your children) without any monetary compensation. You do have to pay stamp duty on the market valuation of the property though.

Also, any profit you make from selling property isn’t taxed under Singapore laws, unless your main business is trading real estate.

But there are a few other questions you may have, such as:

1. Can Foreigners Apply for Home Loans?

Yes, but you’re subject to the Loan-to-Value (LTV) limit just like the locals. This dictates how much you can borrow based on your current leverage. If you don’t have an existing bank loan, you can borrow up to 75% of the purchase price. If you have one or more loans, you can borrow up to 45% or 35% respectively.

2. What Taxes Do Foreigners Have to Pay?

There are 3 main stamp duties of note to foreigners buying property:

Buyer Stamp Duty (BSD). This is based on the purchase price or market value of the property, whichever is higher. You can calculate the taxes payable on your purchase with the IRAS Stamp Duty Calculator.
Additional Buyer Stamp Duty (ABSD). Like the BSD, this is calculated based on the purchase price or market value of the property. Foreigners must pay a 30% ABSD rate unless their home country happens to be one of the few with a Free Trade Agreement with Singapore.
Seller Stamp Duty (SSD). This only applies if you sell the property within three years of acquiring it, and only if you’re not forced to sell it under the Residential Properties Act. The latter happens if you buy land or landed property without getting SLA approval. As long as you hold the real estate for at least three years, you won’t have to pay SSD.

Potential Pitfalls

As with any investment, property purchases in Singapore have their own risks. This is especially true considering Singapore is one of the most expensive places in the world for private property.

Risk #1: Little to No Capital Appreciation

Pick the wrong development and you could be stuck with an asset with low capital appreciation and low liquidity.

One such development was Wing Tai’s The Crest, which had only 18% of units sold years after its launch. From 2017 to 2022 the price per square foot has fluctuated between S$1,628 – S$2,323, with the high of S$2,323 transacted in Feb 2018.

Risk #2: Limited Leases

Then there’s also the fact that most properties in Singapore have a leasehold tenure. That means you’re technically not buying the property – you’re renting it for the duration of the remaining lease (or until you sell it). When that lease is up, the land returns to the government.

While it’s true that older properties have the potential to go en bloc (meaning developers buy up the land in hopes of redeveloping and selling it for higher), it’s also possible for those 99-year leases to go to zero.

Risk #3: Poor Rentability

If you’re banking on the property as a source of rental income, be mindful of this risk. The rental market in Singapore has been thriving as of late, but the data shows that there are always peaks and troughs in the cycle:

When supply outstrips demand, prices tend to drop and there may be more vacant units on the market.

What to Know About the Singapore Property Market in 2022

If you’re still weighing whether to purchase real estate in Singapore, here’s our take on where the market currently stands:

Property Prices Continue to Rise

At the end of 2021, the Singapore government introduced a new round of property cooling measures in a bid to stem the steep sales and rental price growth. Foreign buyers must now pay an ABSD rate of 30% (up from 20%).

In spite of these cooling measures, prices have continued to rise. Analysts have identified several potential drivers:

1. Lower-than-average new launches of private condos are expected throughout 2022. There will be a projected 7000 to 8000 new launches this year, which is a 25.5% drop from the average of 10,750. Reduced supply with increasing demand may lead to higher prices. (Source: The Business Times)

2. An increase in foreign buyers. 59 private condos were sold to foreigners in April 2022 – up from the average of 40 per month in 2021. (Source: The Straits Times) Even with the rise in ABSD, Singapore property remains an attractive investment.

3. Global geopolitical tensions may be driving a capital flight to safety. In Q1 of 2022, Singapore saw a record-high capital and financial surplus of S$76 billion. This is the highest account balance on record:

4. Property is still a popular hedge against inflation, based on the widespread belief that land scarcity leads to property values keeping pace with consumer price increases. (We should add that this isn’t always true – it still depends on the price and quality of the real estate you’re buying.)

Headwinds May Be Coming; Price Increases Could Reverse Suddenly

If inflation remains high amid record commodity prices (especially oil), household spending will decrease along with demand for property. Some may even be forced to sell to rein in their spending.

“We’re already seeing a drop in viewing enquiries since interest rates went up,” notes Bluenest CEO Jeff Lim. “Buyers seem to be on hold right now.”

And interest rates continue to climb. The US, UK, Australia, and South Korea are among the many countries that have raised their rates, with the US expecting four more rate hikes in 2022.

This will increase the cost of financing for new purchasers as well as funding costs for those with floating mortgages. In the 3rd quarter of last year, household debt in Singapore rose to a high of 70% of GDP – up from 67.1% a year prior.

Analysts also predict a global recession in the next two years. Historically, GDP contractions have led to depressed housing prices.

Want to Sell Your Condo Fast? Here’s How Top Agents Do It.

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Few transactions are as weighty as selling your property.

The financial implications are large, there are many factors outside your control, and it takes a lot of work.

So it’s natural to feel anxious when weeks (perhaps months!) pass without a single offer coming through. You don’t know how to get your condo in front of the right buyers, or why the ones who have seen it didn’t make an offer.

Good news! Most of the time, the obstacles preventing you from selling your condo fast can be eliminated — if you know how.

Today, we’ll interview one of our top agents, Zen Lim. Zen is known in the space for selling multiple properties without a single physical viewing, making him a great person to ask about how to develop a marketing plan.

Zen will share the usual timeline for selling private property, the hindrances to selling, and what you can do to sell your condo fast.

The Usual Timeline for Selling Private Property

Anyone who has sold a property would probably agree that the first 10 to 12 weeks are the most hectic.

From the initial prep work to list your property, viewings, and finally issuing an Option to Purchase, the whole process can feel overwhelming.

Once you’ve found a buyer willing to exercise the Option to Purchase, you can both agree on a completion period. This is anywhere from 12 to 16 weeks, usually depending on whether the buyer requires funds from the sale of another property.

From the time of listing to the sale’s completion, the whole process might take 6-8 months.

Of course, the hardest part is finding those prospective buyers. Done poorly, your unit could remain on the market for several months — becoming more and more difficult to sell as time passes. But when done right, you could get an offer in as fast as two days.

So how do you prevent your property listing from growing stale? At what point should you reassess your sale strategy, and how long does it take to find a buyer in a good market?

We’ll get to that next.

What Are the Hindrances to Selling a Condo Fast?

Sizable square footage, a location near an MRT station, or great amenities are all factors that help to sell a condo fast. But these are often factors that we can’t change, and we need to work with what we’ve got.

Instead, we’ll focus on factors within our control – and that we should avoid – to expedite the sale:

1. Setting the Listing Price Too Far Above the Market Value

Real talk: As the seller, you can be the main obstacle to selling your property quickly.

To clarify: we aren’t saying you should settle for less. We all want good value out of our assets. The trouble comes when you expect a higher price than what the market is willing to accept.

Your pricing should be based on a Comparative Market Analysis (CMA) of your unit. You can do a rough estimate yourself by looking at similar units to yours within the same development. If that’s not available, compare with similar developments in your neighbourhood.

This also equips you with the data to negotiate with buyers, should they try to haggle the price down to unreasonable levels.

Most units transact close to the CMA pricing, which is largely determined by the broader market conditions and the supply and demand over time.

Unless your unit has a unique selling point that’s highly coveted, the only time it’s acceptable to go above the average prices is when you’re not in a hurry to sell. If you can afford to wait until market conditions improve and valuations increase, holding out for that extra sum might be worthwhile.

2. Not Preparing an Adequate Marketing Plan

With so many listings on the market, how do you ensure that your listing stands out?

The marketing plan is usually formulated right at the start, after the Comparative Market Analysis report. A good marketing plan should include the unique selling points of your unit along with how to position it relative to the competition.

This is where the skill of property agents becomes evident.

An agent worth their commission would know how to draw out specific points to pique the buyer’s interest, whether from speaking to the buyer’s agent or the buyer(s) themselves. They would have done extensive area research and be able to highlight specific amenities and proximity to key locations like schools or public transport.

They would also know the nearby units for sale, understanding how your unit differs from the others and what advantages it holds.

3. Not Measuring and Adjusting to Market Response

Once your unit is on the market, it isn’t just a passive waiting game. This is the best opportunity to get real feedback on your unit and listing price.

For us, the first two weeks are critical to gauge the market’s response to a unit. This gives us just enough time to get a sense of the demand for the area through checking the number of views a listing gets and the quality of enquiries coming in.

After each viewing, we also collate feedback from the potential buyers. We’ll highlight any action points for the seller to improve the presentation of the unit for viewings. That way, sellers aren’t left in the dark as to what buyers feel about their unit and what they could work on for the next viewing.

In some cases, the lack of quality enquiries may indicate that there isn’t much demand for the area at the time – or that the market as a whole may be putting a hold on purchasing plans.

The former was the case for a unit Zen helped to sell. Because the demand for that development wasn’t strong at the time, Zen recommended that the seller rent out the unit first and re-list the property a year later. In the end, the seller pocketed good rental income and got a higher price than initially expected when he sold the property a year later.

5 Best Practices to Sell a Condo Fast

Beyond what not to do, there are also best practices you could employ if you want a quick sale:

1. Know the Development — Not Just the Unit on Sale

A good real estate agent would conduct a CMA to identify the unique selling points of the development as well as your unit.

As attractive as your unit may be, buyers are also thinking about the development as a whole: whether they see themselves integrating well into that neighbourhood, whether the facilities meet their needs, and perhaps whether a property in that area is a good store of liquidity.

That’s why the highest priority is to have buyers fall in love with the development first, and then the unit itself.

If you manage this task, price usually isn’t too big a concern with the current market – unless there’s nothing noteworthy about the development (then the price will be the selling point).

2. Get to Know the Competition

As with any product priced for sale, your property also needs a competitive analysis. Resources like EdgeProp can help with this: you can check out how much the other developments in the area are priced at, the base $psf, max $psf, and where your unit stands within that range.

After that, sites like PropertyGuru can tell you about other listings in the area and how much competition your unit has.

A good agent would have done his homework on this. He’d know the details of all the other units for sale in the development and be able to cite numbers like floor level, square footage, listing prices, last transacted prices, and what allows your unit to command a higher price (if at all).

This is important because clients would also have done their research before viewing your unit. They know the units in the area – and would likely have arranged viewings for them – so you need to be able to articulate how your unit stands out.

3. Qualify Prospective Buyers

Every serious buyer already has specific traits they’re looking for. If they choose to view your property, they want to see whether your property embodies those characteristics more than the others they shortlisted.

While communicating with the buyer and/or buyer’s agent, ask qualifying questions. These will give you a sense of whether the potential buyers are ready to make a purchase, what expectations they might have, and whether your unit is the right fit for them.

Agents who don’t filter unqualified buyers waste both the buyer’s and seller’s time and give you an inaccurate view of buyer demand.

In most cases, buyers are under time pressure to purchase a unit, so those who are further along in their viewing process would be clearer about their preferences. They’d also know that there’s no such thing as a perfect unit and that they may need to make some compromises.

4. Tailor Your Presentation of the Property for the Buyers

We asked Zen for any examples of how he made a seemingly difficult sale happen faster than expected.

There was a 2nd floor unit that had been converted from a 3-bedder to a 2-bedder. The owner had previously attempted to sell the unit, with no success.

A year later, the owner decided to approach Bluenest. We connected him with Zen, whose strategy was to focus on qualifying buyers and find out what they were looking for in a property.

Armed with that knowledge, he angled the presentation of the unit to fit the buyer’s needs.

In this case, the buyer’s main interest was the ability to sell the property at a later date and for a profit. So Zen focused on the development’s prime location, the enbloc potential due to its age, the recent renovations, and the excellent condition of the unit.

With Zen speaking to their specific concerns, the buyer felt they stood to gain a decent profit from the condo.

5. Reach Out to the Network

Good agents make it a point to maintain a healthy network of potential buyers, sellers, and agents. While managing their listings, they would have connected with potential buyers for each property sold and be keenly aware of their purchase criteria.

This allows them to have a pool of ready buyers for specific neighbourhoods or property types.

When you work with a well-connected agent, you greatly increase your chances of a faster sale.

How to Determine Market Rental Rates for Private Property (2022 Guide)

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March and April saw record-setting rental prices in Singapore.

We had headlines like “Condo, HDB rental prices hit record highs in April; fewer units leased” (Straits Times) and “Pricey Singapore rents go through the roof even as population dips” (Reuters).

So it’s natural that people are asking, “are these sky-high rental prices here to stay?” and “How do I determine what’s the best market rate for rental units?”

We’ll cover that today with insights from Kenneth, one of our best agents for marketing rental properties:

The Broader Context: Yes, the Data Points to Record Highs…
…but the Rental Price Surge May Be Temporary
What Makes it Hard to Accurately Price Rentals?
5 Factors to Consider when Determining Market Rental Rates for Private Property

Yes, the Data Points to Record Highs…

First, we should acknowledge that all the data points to the same conclusion: rental prices are at unseen levels, even while both Singapore and Malaysia’s economies are recovering to pre-covid levels of activity.

Whether you look at the market by district or break it up into the three URA-defined regions (Core Central Region, Rest of Central Region, Outside Central Region), rentals are above the previous 2013 high.

…but the Rental Price Surge May Be Temporary

Most are predicting that rental prices will continue to surge, citing continued BTO delays, construction industry cost pressures, and more young adults leaving the nest for their own space.

But contrary to popular belief, these factors may not contribute as much as we think.

One counterargument that these high rental prices are a result of a couple things:

A spike in demand during the lockdowns. Before COVID, over 300,000 Malaysians crossed the Johor-Singapore Causeway every day. When the borders were closed, many of them were forced to choose between giving up their livelihoods or urgently arranging for accommodation in Singapore.
Ripple effects across the whole rental market. As more affordable units were snapped up, renters began looking toward the pricier, more centrally-located units. This led to price increases across the board.

However, the workers who were suddenly in need of accommodation would have likely signed shorter tenancies, from 6-18 months.

The Shorter-Term Pressures are Lifting

Rental price indices like the SRX SPI don’t differentiate between the different lengths of leases, so high-priced rentals may only be short-term rentals. We’re now seeing the gradual expiry of the leases signed during the lockdowns, leading to more supply in the market.

With the borders opening up again, many of these tenancies may end without renewal. And when demand starts dropping while supply increases, prices drop as well.

What Makes It Hard to Accurately Price Rentals?

No matter which direction the broader market goes, the question that’s always relevant is how to determine what’s market rate for rentals.

After all, the data shows that even within the same month, units of the same size and in the same development can show a rent variation as high as 67.5%:

That makes it hard to determine what landlords should be charging – or whether you’re paying a fair rate as a tenant.

A few of the factors that influence the variance include:

Facing, floor, and view. As with properties for sale, units that have a favourable facing, higher floor, or better view tend to go for higher rental prices.
Renovations and furnishing. If the unit is newly renovated or better furnished than the other listings in the vicinity, landlords often demand higher rentals.
Renewal of existing tenancies. New tenancies tend to be priced higher than renewals, as landlords tend to buffer potential costs and inconveniences into rental prices in case there are issues with new tenants.

But even when accounting for these factors, the high variance in rental pricing has been noticeable for every district in the last two decades.

That’s because there are also subjective considerations to take into account: for example, how safe the landlord feels about the tenant, whether the landlord believes the tenant will take good care of their property, and how much the tenant likes the unit.

That means there’s a lot of value for both landlords and tenants to be able to accurately assess rental rates prior to negotiations.

How to Determine Market Rental Rates for Private Property

Even with the intangible elements at play, there are still ways to get a good gauge on a fair market rental rate. Here are the factors to consider when calculating rental prices for your property:

1. Tenancy terms are just as important as rental rates.

Understandably, there’s a lot of anxiety for both the landlord and tenant around paying too much or charging too little. You can offset this anxiety by including terms in the tenancy agreement that clarify maintenance, repair, and replacement costs.

Many agreements include a clause where the tenant bears maintenance costs from S$150 to S$200, after which the landlord foots the rest of the bill. Of course, this is based on a mutual agreement of what’s reasonable wear and tear for the age of the property.

2. Don’t Peg Your Rental Prices to Past Transactions.

Because most whole-unit tenancies last for multiple years, past transactions aren’t the best indication of current supply and demand. To add to the complication, tenancy renewals also hinge on the specific relationship between the landlord and tenant. That means the prices documented in URA aren’t necessarily what the market is willing to pay in the present.

This is especially relevant given that we’ve noticed some agents use past transactions to lower their landlords’ expectations (in hopes of a faster transaction).

As we mentioned above, the current high rental prices may not last. You should negotiate based on the current demand for units, especially now that borders are re-opening.

3. Do a Comparison with Neighbouring Units and Developments.

While past transactions may not be a great indication, current listings on property portals are. Location factors heavily into rental rates. Look around to see what similarly-sized units and developments in the area are charging for rentals.

4. Get a Baseline for Your District.

This may seem somewhat contradictory to point #2, but you can still fall back on past transacted data if there are no current listings for your area. URA provides a good resource that you can use to pull median rentals. You can search by district, calendar quarter, or specific developments. Here’s a snapshot of median rentals from the first quarter of this year:

Median Rental Rates (By District)

5. Fair Market Rate Isn’t Just About Pricing.

Don’t make your decision based on price alone: the relational elements are just as important given the length of a tenancy agreement.

For example, landlords might prefer a tenant who’s easy to communicate with and willing to make compromises over one who pays a bit more but is difficult to deal with.

For tenants, the locality, layout, and condition of the unit may warrant paying a bit more so they can have a home that suits their needs.

Final Thoughts

Good tenants want a good landlord, and vice versa.

While both parties are bound to search out pricing that’s in their best interest, it’s important to keep in mind that the relationship may last for years. Going for a win-win scenario would set up an amicable relationship between the landlord and tenant, since neither side feels like they’re being taken advantage of.

A landlord who feels underpaid will be less likely to renew a tenancy or assist with maintenance issues. On the other hand, tenants who feel they’re overpaying will put less effort into upkeep – and may be constantly asking the landlord for repairs or replacements.

How to Buy Resale Private Property in Singapore [2022 Guide]

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Editor’s Note, May 2022: We’ve updated the article to ensure links are still relevant.

With an average property price of US$874,372, Singapore was ranked the second-most expensive city in which to buy private property in 2019. (Source: TODAYonline)

Yet even with the sky-high prices of property here, private property remains highly coveted by would-be homeowners, who believe that “property prices always rise in Singapore.”

But given that a condo or landed property represents such a sizable investment in your portfolio, you’ll definitely want to do your homework beforehand.

That’s why from helping you calculate whether your salary is enough to buy a condo to going through the downpayment required, we’ll lay down the entire procedure (and costs) of buying private property in Singapore.

Buying a Condo / Landed Property in Singapore: The Full Procedure

Step 1: Check Your Eligibility
Step 2: Calculate Your Finances
Step 3: Obtain Your Approval in Principle (AIP)
Step 4: Check Out Your Preferred Areas
Step 5: Decide Whether to DIY or Hire an Agent
Step 6: Go for House Viewings
Step 7: Get Option to Purchase (OTP)
Step 8: Finalize Your Home Loan
Step 9: Exercise Option
Step 10: Pay Buyer’s Stamp Duty
Step 11: Conduct the Final Inspection
Step 12: Complete the Sale at the Lawyer’s Office

Step 1: Check Your Eligibility

There aren’t many eligibility requirements to buying private property in Singapore – if you’re looking at condos, that is. Even PRs and foreigners are eligible as long as they’re above the age of 21.

If you’re looking at landed property, things get a little trickier. PRs need to have been PRs for at least 5 years. It’s even worse if you’re an expat, since you’ll need to get special approval from the Singapore Land Authority.

The other catch is that if you’re a PR or foreigner, you may have to pay an extra tax (the Additional Buyer Stamp Duty) even if this is your first property purchase. Certain nationalities do get exemptions under the Free Trade Agreement though.

Step 2: Calculate Your Finances

Condominiums can easily be double the price of government-subsidised HDB flats – let alone landed property. You’ll definitely want to make sure you can afford the price tag.

First, dig up these numbers:

Your CPF OA savings (if any)
Your average monthly CPF contributions (if applicable)
The % of your take-home salary that you save
Your bank account balance
Any existing debt (car loans, outstanding credit card balances)

You’ll need at least 25% of the property’s purchase price saved in cash or CPF, since a bank loan will only give you 75% of the property’s valuation limit.

Plus, 5% of the purchase price must be in cash (not CPF). This will form part of the downpayment.

And that’s just for starters. You’ll also need a healthy cash buffer to cover costs like legal fees, stamp duty, mortgage insurance, and so on. You can find out all the costs you’ll encounter here.

You’ll need to calculate three figures:

How much in cash/CPF you’ll need upfront (until the closing of the sale)
What’s the maximum price you can afford to pay on the property
Given your current household income, how much you can afford to pay in recurring costs (property taxes, utilities, maintenance fees, etc.)

Bonus tip: Make sure your retirement plans won’t be derailed by the cost of the private property. Many people pump the entirety of their CPF into it, thinking they can downsize later on. But this is a dangerous assumption to make, particularly with leasehold and the strict property laws in Singapore – you don’t know what it’ll be worth later on.

Step 3: Obtain Your Approval in Principle (AIP)

The next step is to find out exactly how big of a loan you can get. This is where all the numbers from the previous step will come in handy.

You can skip this and opt instead to use a home loan calculator like this one. But that’s assuming your calculations are 100% correct. If not, you’re taking a huge risk.

One of the most common mistakes that buyers make is to pay the seller the non-refundable 1% Option Fee, and then forfeit it when they find out later on that they can’t get a big enough loan. If your budget is tight, losing that Option Fee means you may not be able to afford the downpayment on your next home!

The best way to go about doing this is to submit applications to various banks to see which one will give you the best rate. It’s free, non-binding, and takes maybe 15 minutes if you’ve got all your documents ready.

Heck, you can even get the AIP with no real intention to buy a property.

Just don’t randomly select a bank for the AIP, thinking that you’ll be able to borrow the same amount from any bank. Banks typically have a quota they need to meet and they’ll increase their rates as they near that quota. You’ll want to find one with favourable rates and good loan features for you.

Step 4: Check Out Your Preferred Areas

Now that you’ve got the numbers from Step 3 figured out, it’s time to go house hunting.

But before you actually go for any house viewings, you’ll want to be well-armed with pricing information about those developments.

We elaborate on how to find out a property’s valuation in this article, but to recap:

Head over to URA to check out the prices and details of recently sold units in your target area(s)
1. Note the approximate price range based on these past transactions. A number far away from the median price tells you that you’ll have to look deeper for any costly defects (or recent renovations that mark up the price)
Use property price estimate tools like MyHomeValue™ to get confirmation on the expected price range
Check out prices on current listings on marketplaces like SRX – but be aware that these prices are usually marked up to account for negotiation

Step 5: Decide Whether to DIY or Hire an Agent

As a buyer, there are zero agent commissions to buy private property in Singapore. All those costs are typically borne by the seller (yay)!

You might get a rare agent or two who’ll ask for commissions, but generally, buyer agents will co-broke with seller agents for their agent fees.

You can still choose to forgo the agent, of course. But an agent can help with things like:

Calculating your finances and helping you obtain a home loan
Settling the mountain of paperwork and making sure you don’t miss anything
Negotiating to get you the best possible price
Conducting background checks on the property/seller
Adding an inspection clause to the OTP before the handover, so you’re not stuck with leaky plumbing or termite-infested flooring

Regardless of whether you’re getting an agent, you’ll still need to hire a conveyancing lawyer. Expect to pay around $2,500 – $3,000 all in, though premium law firms can charge up to $5,000 for private property transactions.

That said, certain law firms will quote you a low figure just to get you to sign with them. They then slap you with other costs later on. To avoid being overcharged, make sure the figure you’re quoted includes:

Mortgage Stamp Duty (for bank loans) – paid to IRAS and capped at $500
CPF paperwork so you can access your CPF funds
Caveat lodgment charges

It’s best to find a lawyer before you get the Option to Purchase so you won’t be in a mad rush later on.

Step 6: Go for House Viewings

It’s finally time to look at potential homes!

Shortlist a few potentials and arrange for viewings – preferably in the daytime so you can also check how hot or noisy the place gets.

But bring along a fine-toothed comb for this (not literally), because this is when you’ll really have to look beyond the high-res photos and into the actual maintenance and structural integrity of the property.

With older condominiums, pipes can start to crack and leak after 12-15 years – so be sure to ask about when the last renovations were done. Landed property requires you to check even more thoroughly, since Singapore’s climate tends to be very unforgiving on houses.

You’ll also want to check for the following, as they’ll cost you a small fortune in renovation expenses:

Built-in furniture that may need to be torn out
Damaged/cracked tiles, flooring, or walls
Peeling paint (may indicate water seepage)
Wet patches of flooring (may indicate leaky pipes)
Rotten or termite-ridden wood (furniture, flooring, doorframes, etc.)
Poor toilet flushing power (may indicate clogged drains)
Rust-colored or “bloodstained” streaks on the walls (may indicate bedbugs)
Faulty electrical circuitry

We’ve heard horror stories of buyers taking over termite-infested properties and wrestling with the problem for months, so you definitely don’t want to skip this step.

Step 7: Get Option to Purchase (OTP)

Once you’ve found your dream home, it’s time to chope that property (by way of an OTP).

You’ll have to:

Review the terms of the OTP (or have your lawyer/agent do it)
Pay the seller 1% of the purchase price (cash) as the Option Fee

You now have 14 days to sort out your home loan and decide whether to proceed. During this time, the seller isn’t allowed to issue an OTP to anyone else.

But just a reminder: if you back out after the OTP, you won’t get your Option Fee back!

Step 8: Finalize Your Home Loan

Before exercising your OTP, you’ll need to obtain all the necessary documents and settle your home loan. (Read also: The Ultimate Home Loans Glossary)

The documents required vary from bank to bank, but they’ll typically ask for:

Completed loan application form
NRIC / Passport for all applicants
OTP or Sales & Purchase Agreement
Valuation Report*
Latest Notice of Assessment or 12 months’ CPF contribution history
Latest CPF Statement of Account
Payslips from last 3 months (or latest payslip + employment contract if you’ve been working for less than 3 months)**
Salary crediting account statements for last 3 months
Latest credit facilities statements (e.g., credit card statements, car loan, personal loan facilities, etc.)

If you don’t already have a valuation report, no worries. The bank will typically give you an indicative valuation first. Once you’ve got the OTP, they’ll send a professional valuer down to the property to formally assess it.

If you’re a freelancer or paid in commissions, you can give the bank your tax returns or commission statements from the past few years.

How long it takes to process your application all depends on how efficient you are in obtaining all the necessary financial documents. It typically only takes 2-3 days for the bank to approve the loan.

Then again, we’ve also encountered the rare scenario in which applications are rejected or the loan amounts are far lower than expected. In these cases, it’s usually because the buyer has bad credit – or they put themselves up as a guarantor for another loan.

The bank will also engage a lawyer for the mortgage process. You don’t HAVE to go with theirs though, so shop around for the best rates as you’ll need to pay for those legal fees.

Step 9: Exercise Option

Once you’ve got the Letter of Offer from the bank, it’s time to exercise the option!

This time, you’ll need to pay another 4% of the sale price in cash as the Option Exercise Fee.

Once you do, your lawyer will help you lodge a caveat on the property. This is basically an official declaration to the world that says you’re purchasing it – it protects your interest in the property until the transaction is complete.

Step 10: Pay Buyer’s Stamp Duty

With the exercised Option in hand, you now have 14 days to pay the Buyer Stamp Duty (and Additional Buyer Stamp Duty if applicable).

You can check out the most updated rates at the IRAS website, or use their calculator to figure out the exact amount due.

Head over to the IRAS e-Stamping Portal to make your payment.

Step 11: Conduct the Final Inspection

Now it’s up to the seller to move out of the property entirely. They’ll have to do this in the 8-10 weeks after the option is exercised.

If you’ve got a smart agent who included an inspection clause in the OTP, make full use of it! You may even want to consider hiring a professional inspector for this portion.

Defects can be extremely expensive to fix – particularly with landed property – so you want the seller to take care of all the necessary repairs before the official handover.

After the seller moves out, you’ll need to inspect the property to confirm that it’s vacant. This is also when you’ll check that everything cited in the valuation report is intact and in good working order.

Step 12: Complete the Sale at the Lawyer’s Office

Confirmed vacant possession? Secured all the funds needed for the purchase?

It’s time to head on down to the lawyer’s office to settle things. Bring your chequebook along with you, as you’ll have multiple to write for:

Legal fees to your lawyer
Fees payable to Singapore Land Authority
Mortgage Stamp Duty to IRAS (if you took out a loan)

If you engaged an agent, the seller’s agent will split his commission with your agent.

After that, you’ll collect the keys to your new private property!

Extension of Stay HDB: Traps to Avoid to Protect Both Sides

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An extension of stay can help sellers transition to their new homes more smoothly, but many opt for a private agreement without going through HDB.

This leaves both buyers and sellers in a precarious situation – and it can get ugly.

We’ll lay out the 5 scenarios we commonly encounter, what traps to avoid, and what your options are moving forward:

You’re buying an HDB flat and the seller requests an extension of stay up front.
You’re buying a flat and the seller asks for an extension after the OTP has been issued.
You’re the seller requesting an extension of stay, which you’ve communicated to the buyer at the start.
You’re requesting an extension of stay but the buyer does not want to grant one.
You requested an extension that the buyer agreed to initially. He/she later changes his mind and wants to cancel it.

Scenario 1: You’re buying an HDB flat and the seller requests an extension of stay upfront.

This is the most straightforward scenario. Ideally, the seller communicates his request during the negotiations so you know what you’re getting into in advance.

The Temporary Extension of Stay can be a max of 3 months after the date of completion. To quote HDB, “there shall be no further extension beyond the 3-month period.”

You can then agree on a purchase price with the extension in mind. You’ll have to account for factors like:

Rental for a place to stay in the interim
Town council fees
Utilities
Any potential damage to the property during the extension period (since you are now the owner)
Delays in renovations (if needed)
Higher non-owner-occupier property tax rates for the duration of the extension

The seller should compensate you for these added costs in a private agreement separate from the flat’s resale price. Just bear in mind that even though it’s a “private agreement,” you’ll still need HDB approval to proceed with the extension!

The Sellers and Buyers of the Flat may sign a private agreement between themselves on the terms of the Temporary Extension of Stay, including but not limited to terms dealing with monetary compensation and any other mutually agreed considerations. In this regard, both Sellers and Buyers understand that the resale price of the Flat cannot incorporate any intended or prospective monetary compensation for the Temporary Extension of Stay. (HDB Terms and Conditions)

If you’re all right with the timeline and the level of compensation, it’s time to ask for an OTP. (More info on the timeline in the Step-by-Step Guide to Buying a Resale Flat.)

When you fill out the Resale Application later, both you and the seller will have to note the request for the extension in your respective copies.

As the buyer, you’ll have to pay a S$20 admin fee to process the extension. The seller will also need to show proof of purchase for the new property before HDB will grant the Temporary Extension of Stay. You can check on the approval by emailing the officer in charge of your case (you’ll find his or her name when you log in to the resale portal).

The Temporary Extension of Stay, once approved, starts from the date of resale completion and automatically terminates 3 months after.

If there are any disputes over the extension, you’ll need to resolve these privately with the seller. HDB will only provide relevant documentation.

Scenario 2: You’re buying an HDB flat and the seller requests an extension of stay after the OTP is issued.

As the buyer, it’s in your best interest to avoid granting an extension after the OTP has been issued. This should’ve been negotiated upfront as agreeing to the extension of stay means extra costs to you.

In the event that you encounter a seller who wants an extension of stay but doesn’t want to apply via HDB, be very careful. This is a huge risk: if HDB finds out, they could take legal action against both you and the seller as you’re in breach of the Minimum Occupancy Period.

There’s also an issue with taxes: filing an extension of stay means the unit is non-owner-occupied and therefore subject to the higher property tax rates. Without HDB’s approval of the extension, they assume that the flat is owner-occupied. If it turns out it isn’t, it could be considered tax evasion.

In many cases, this scenario occurs because the seller has not yet acquired their next place of residence. HDB requires sellers to provide proof of purchase for their next home before granting the extension of stay. Otherwise, resale completion processes could drag on for months and leave buyers in a very difficult position.

You have two main courses of action:

If your situation allows you to grant an extension, ask the sellers to approach HDB via the proper channels. If HDB gives the go-ahead, you can then negotiate the terms of the private agreement with the seller.
If you’re unable to grant an extension, you’re well within your legal rights to refuse. This is especially so if you and the seller have already submitted the Resale Application.

More often than not the seller is able to arrange alternate accommodation, so don’t feel obligated to grant the extension of stay.

There have been cases in which the seller offers to lease the property back from the buyer. However, you’re not allowed to rent out the entire flat within the Minimum Occupancy Period, not to mention that short-term HDB rentals have a minimum duration of 6 months.

What if the seller threatens to back out of the sale?

It’s not a valid threat. After the seller has issued the OTP, they’re in a legally binding agreement to sell the property to you during the 21-day option period. If they back out, you’re entitled to pursue damages on the grounds of contractual non-performance.

Your conveyancing lawyer can also place a lien on the property so that the seller can’t sell the property to another buyer until the matter is resolved.

Scenario 3: You’re the seller requesting an extension of stay, which you’ve communicated to the buyer at the start.

This is the best scenario as it puts you and the buyers on an even footing for the negotiations. It helps to provide the buyer with proof that you’ve already acquired your next place of residence – you’ll need to send the documentation to HDB when you file for the Temporary Extension of Stay anyway. This can be:

an exercised Option to Purchase,
a duly executed Sales & Purchase Agreement, or
other evidence of purchase (e.g. confirmation of taking possession or date of taking possession of Property (in purchase documents or letter by solicitors)

If the buyer accepts your request, make sure you put the terms of the agreement in black and white. This includes (but is not limited to) monetary compensation, duration, and any other mutually agreed-upon considerations.

Either party may cancel the Temporary Extension of Stay at any time before the date of resale completion, so your private agreement should also state what happens if they do – including whether there needs to be compensation.

You should also put in a termination clause allowing either party to cancel the agreement upon the other party’s receipt of a written notice of termination.

Scenario 4: You’re requesting an extension of stay, but the buyer does not or cannot grant one.

Assuming you’ve asked for the extension at the beginning of the negotiations, it just might not be the right match. The buyer’s circumstances may not allow them to grant an extension.

This is also why you should make the request before issuing the OTP: that way, you aren’t legally bound to sell the property to that buyer.

It might also help to extend a discount on the property price along with the appropriate compensation. Buyers would negotiate with their financial and living situation in mind.

Scenario 5: You requested an extension of stay that the buyer agreed to initially. He later changes his mind and wants to cancel it.

While unsettling, this is allowable under HDB’s terms and conditions:

3.8 Either the Sellers or the Buyers may cancel the private arrangement for the Temporary Extension of Stay at any time before the completion date of the resale of Flat. Sellers and Buyers are advised to provide in their private agreement what will happen in this instance, including issues of compensation etc.

And if HDB approved the Temporary Extension of Stay, then the terms of the ‘private arrangement’ are in effect. HDB will not arbitrate or enforce the agreement on your behalf.

This is where it helps to have a good agent doing up the terms of the agreement beforehand, but you should also check that compensation for early termination is explicit in the arrangement.

From HDB to Condo: Can You Get a Dual Key Condo at a Discount?

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16 Dec 2021 marked a fresh round of property cooling measures, including an ABSD hike. And with the higher taxes deterring homebuyers, it’s understandable that condos with dual key units started getting more attention.

Who wouldn’t be enticed by ad copy like “two for the price of one!” or the prospect of renting out part of your home while retaining your privacy as a live-in landlord?

Still, dual key condos tend to be expensive. After all, there aren’t many on the market and demand tends to outstrip supply.

But what if we told you there’s a way to get a dual key condo at the same monthly instalments as an HDB flat?

No scams – read on to find out.

What Are Dual Key Condos?

Condos with a dual key concept share the same main door but branch off into separate entrances for their individual units. They usually come in 3- or 4-bedroom configurations, with one segment turned into a studio apartment on its own.

This allows multigenerational families to stay close to each other in separate units – or the owner to rent out one unit while staying in the other. Because of the premium Singaporeans place on privacy, dual key units purportedly fetch a higher rental yield than their regular counterparts.

They’re also considered the same property in the eyes of tax authorities, so buyers don’t have to pay ABSD.

Here’s an example of a 4-bedroom dual key unit at Parc Olympia:

Still, dual key condos tend to be a niche investment. Part of the reason developers don’t make many of them is that they appeal to a smaller subset of the market.

And because most dual key units are in newer developments, they come with a higher $psf and possibly fewer amenities.

But what if you could have the larger square footage and amenities of an older condo and the perks of a dual key condo?

The Idea: Create Your Own Dual Key Condo

Since the idea is to have a segment of the unit split off into a standalone apartment, it’s possible to convert a regular 3- or 4-bedroom condo into your own dual key.

At Bluenest, we’ve done this for our clients over the past year to great effect.

Here’s how.

Converted Dual Key Condo: Sample Floor Plan

The floor plan above depicts a 3-bedroom condo that would work for the conversion. Only certain types of layouts make this a feasible renovation, like:

At least 1,200 sqft. Older condos are more suitable, as their units tend to be larger.
At least 3 baths. This allows you to create a studio with its own bathroom while the main unit retains a 3 bed / 2 bath configuration.
A large living & dining area. Since you’ll be converting the original kitchen into the studio apartment, you’ll need to make sure there’s enough space for a new open-concept kitchen in the main unit.
A common bath that’s adjacent to the new kitchen. This will resolve issues with plumbing (drainage and water supply for the sink, for example).
A helper’s room (or storeroom) or bathroom that’s accessible from the kitchen. These will form part of the studio layout.

After converting your new place into a dual key unit, you’ll have about 800-900 sqft for the main unit and 400 sqft for the studio apartment. This makes the main unit about the same size as a 3-bedroom in a new development.

If you’re unsure about units that would work for the conversion, it’s best to work with an agent who has experience in dual key conversions. This will help ensure the desired outcome and keep your renovation costs in check.

Drop us a note about how to get your own dual key conversion.

How Much Would It Cost Relative to an HDB?

As a helpful comparison, here are the costs of:

A 3-bedroom HDB flat (5-room flat)
A ready-made dual key with a 3-bedroom unit attached to a 1-bedroom studio
Our converted unit of a 3-bedroom condo with attached studio.

All the units in this comparison are from listings in the same district (D25).

	3-bed Converted Dual Key EC (1,200sqft)	3-bed HDB 5-Room Flat (1,300sqft)	Ready-Made Dual Key (1,399sqft)
Size (sqft) of 3-bedder	800 sqft	1,300 sqft	900 sqft
Size (Attached Studio)	400 sqft	–	499 sqft
Total Cost of Property	999,000	580,000	1,700,000
5% Cash Down Payment	49,950	29,000	85,000
20% CPF Down Payment	199,800	116,000	340,000
Loan (75% LTV)	749,250	435,000	1,275,000
Est. Monthly Repayment	~$3,150	~$1,684	~$4,710
Est. Monthly Rental from Studio	~$1,600	–	~$1,800
Est. Nett Monthly Repayment	~$1,550	~$1,684	~$2,910

In terms of upfront costs, a 1,300 sqft 5-room HDB flat with 3 bedrooms and 2 baths would cost S$580,000. This is just over half the cost of a 1,200 sqft Executive Condominium at S$999,000.

That’s where the dual key rental income comes in.

One of the main benefits of a dual key unit is that you can rent out some of your square footage while at the same time still enjoying the privacy of a 3-bedroom property. The rental income is like an offset to your monthly mortgage payments, so you’ll find yourself paying a similar amount – if not lower – than someone who bought a 5-rm HDB.

You’ll eventually own a property with a much higher market value and a higher likelihood of capital appreciation.

The renovation costs of converting the unit into a dual key can be minimal provided you select the right unit layout. In our experience, clients kept their renovation costs within the same budget they’d set aside to do up a 5-room HDB.

Talk to us to find out if a converted dual key would work with your finances.

What Are the Benefits to This?

Convertible. If and when you decide to sell the unit, you can either sell it as a dual key – which may fetch a higher price in certain markets – or convert it back to a regular condo.
Better resale value. Most of the time, dual key units are a niche investment: people still prefer a traditional 3-bedroom condo with more space. Buying a regular 3-bedroom condo and converting it is less risky than buying a ready-made dual key unit.
Flexibility. Digital nomad? You can stay in the studio and rent out the main unit for more income. Elderly parents? They can stay in the studio. That way, they’re close enough that you’re around if they need help, but separate enough that you and your family still have your own space.
Lower taxes. Since you’ll likely be staying in one of the units while renting out the other, you’ll pay the much lower owner-occupied tax rate.
Higher income. Stand-alone studio apartments attract higher rents than renting out one of the rooms in your unit.

Are There Any Risks With This Approach?

We’d be remiss if we didn’t lay out some of the possible pitfalls:

1. Not Being Able to Offset Your Monthly Repayments With Rental Income

This is especially relevant if you’re counting on rentals to be able to afford the place. It will take time to renovate, and you likely won’t get a tenant immediately after putting your place up on the market. Be prepared to have a financial buffer of at least 3-6 months.

That said, the rental market is healthy right now, owing to the lower supply of newly completed homes and the relaxed restrictions on travel. Rental prices have gone up every month for almost two years now:

2. Expecting Capital Appreciation that Never Materializes

Many Singaporeans aspire to own a condo partially because property is seen as an ever-profitable asset. But as with any investment, condos aren’t guaranteed to have capital appreciation: it still takes a discerning eye to pick a good development. That’s why we recommend engaging someone you trust to help with the purchase of a new property.

Would you be interested in a converted dual key condo? Let us know in the comments!

7 Spacious 3-Bedroom Condos Near MRT Under $1.5k PSF

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$1,725,000. That’s the median selling price for a 1,100-1,200 sqft leasehold condo in the city fringe (about 1,437-1,568 $psf) – and it seems to be inching upwards relentlessly.

Still, ample bedrooms and a safe walking distance from an MRT are essential for families with children, or perhaps the more eco-conscious. That’s why we went on a search for properties that offer good value while still prioritising convenience.

We’ve curated 7 spacious 3-bedroom condos near MRT (within about a 5-min walk), taking note of their average $psf compared with that of the surrounding neighbourhood:

High Oak Condominium (Beauty World)
Queens (Queenstown)
The Terrace (Punggol)
Changi Green (Upper Changi)
Changi Court (Upper Changi)
Glendale Park (Hillview)
The Clearwater (Bedok Reservoir)

1. High Oak Condo (Toh Tuck / Beauty World)

A District 21 property with a median transacted price of $1,151 psf (3 bedrooms) in the past year. New developments in District 21 have seen the greatest price increases. The median transacted $psf for the past 5-10 years is $1,527, while the median transacted $psf for upcoming developments is $1,983 (+29.9%).

High Oak Condo is a relatively small development with just 194 units. A 4-storey development, High Oak has 3-bedroom units ranging from 1,184 sqft to 1,689 sqft, with the ground-floor units including a patio that can be as large as 200 sqft and offering direct access to the gardens.

There’s a fairly high degree of variance in unit layouts, with some units having corridors or living/dining rooms that may feel narrow. We recommend visiting a variety of units within the size range you’re looking for as some layouts may be more suited for your needs than others.

At 580 metres from the nearest MRT, High Oak has the longest walking distance on our list. We did consider not including it, but we felt that the walk to Beauty World MRT (along the well-known Lor Kilat) had so many popular F&B establishments (Cowpresso Coffee and Udders Ice Cream, to name a couple) that many families wouldn’t mind.

Distance from MRT: 580m (DT5 Beauty World MRT)
Developer: High Oak Properties Pte Ltd
Total Units: 194
Total Floors: 4
Tenure: 99-year Leasehold
TOP: 1996
3-bedroom Floor Size(s): 1,184 – 1,689 sqft

2. Queens Condo (Queenstown)

A District 3 property with a median transacted price of $1,393 psf (3 bedrooms) in the past year. In comparison, the District 3 median for the past 5 years is $1,966 psf. In the last year alone, transacted $psf for non-landed properties in the area has increased from $2,011 to $2,393 (+19%).

Sandwiched between Stirling Residences and Commonwealth Towers, Queens stands in stark contrast to the newly-built condos. You’ll find that for the same (or lower) quantum, Queens offers larger living spaces with minimal wasted square footage.

3-bedroom units range from 1,184 to 1,410 sqft, with expansive living/dining room layouts that can be extended to include an open kitchen. There are no balconies here – instead, you get full use of the space for indoor purposes. All of the bedrooms are big enough to accommodate a Queen bed and study desk. Tucked behind the kitchen, the utility room comes with an attached WC and can become a room for the helper if needed.

Although a 20-year-old development, Queens is well-maintained and has one of the largest swimming pools in the area. Amenities include a driving range, putting green, a gym, basketball and tennis courts, and an air-conditioned badminton hall.

Distance from MRT: 220m (EW19 Queenstown MRT)
Developer: Allgreen Properties Limited
Total Units: 722
Total Floors: 38
Tenure: 99-year Leasehold
TOP: 1998
3-bedroom Floor Size(s): 1,184 – 1,410 sqft

3. The Terrace (Punggol)

A District 19 property with a median transacted price of $1,017 psf (3 bedrooms) in the past year. In comparison, the District 19 median for the past 5 years is $1,385 psf. In the past 10 years, transacted $psf for non-landed properties in the area has increased from $1,211 to $1,483 (+22.5%).

The Terrace is an Executive Condominium (EC), so HDB’s rules apply. TOP in 2017, only Singapore Citizens and PRs can buy it from the resale market this year. From 2027 onwards, it’ll be considered privatised and available to foreign buyers. That said since it’s an EC that’s barely 5 years old, the median $psf is far lower than what you’ll find with private condos.

The Terrace comes in 3, 4 and 5-bedroom units, with the 3-bedder coming in 3 sizes. We find the layout for the 1,173 sqft 3-bedder to be ideal, with rectangular room layouts and minimal dead space.

If you need additional space, the 4-bedders come in 1,313 and 1,442 sqft units with two en-suite bathrooms as well as one shared bathroom. Plenty of living space for a multi-generational household or for one with 3 or more children.

Both 3- and 4-bedroom units come with a generous balcony that extends from the living and dining room: a great opportunity to create a living room that straddles both indoor comforts and outdoor airiness. With unimpeded views of the Punggol Waterway, it’s a perfect setup for those who enjoy natural light and plenty of ventilation.

There are many parks and activity & amusement centres for children in the neighbourhood, with the Kadaloor MRT just 197 metres away. This is a development that offers convenience without the congestion and busy-ness of the city centre.

Distance from MRT: 197m from PE5 Kadaloor LRT
Developer: Peak Square Pte Ltd
Total Units: 747 (12 Towers)
Total Floors: 17
Tenure: 99-year Leasehold (EC)
TOP: 2017
3-bedroom Floor Size(s): 1,001 sqft, 1,076 sqft, 1,173 sqft
4-bedroom Floor Size(s): 1,313 sqft, 1442 sqft

4. Changi Green (Upper Changi)

A District 16 freehold with a median transacted price of $1,090 psf (3 bedrooms) in the past year. In comparison, the District 16 median for the past 5-10 years is $1,427 psf for freehold properties.

The 3-bedders at Changi Green have a practical layout that prioritises functional living areas. Rooms are rectangular and transition spaces are well thought out, minimising dead space. The living and dining rooms are generously proportioned and full of natural light through large windows.

At 1,334 square feet, Changi Green has some of the more spacious 3-bedders.

Because it’s a slightly older place (TOP 1998), the development comes with classic stylings, including tiled shared and common spaces and wooden flooring in the bedrooms. Other than that, Changi Green comes with a full suite of facilities that include a multi-purpose hall with wooden floors – perfect for a game of badminton with the family.

Distance from MRT: 500m (DT34 Upper Changi)
Developer: Allgreen Properties Limited
Total Units: 256
Total Floors: 10
Tenure: Freehold
TOP: 1998
3-bedroom Floor Size: 1,334 sqft

5. Changi Court (Upper Changi)

Like Changi Green, Changi Court is a District 16 freehold property. The 3-bedroom units have a median transacted price of $1,136 psf for the past year, compared to the district median of $1,427 psf.

Changi Court was also developed by Allgreen Properties Limited, and they share many of the same design principles and aesthetics.

The 3-bedroom units are a bit smaller than Changi Green in two layouts: 1,098 sqft and 1,184 sqft. However, at the time of writing, some of the 1,300+ sqft 4-bedroom units are priced at <$1,200 psf, making them even more affordable than some of the 3-bedders at Changi Green. This is advantageous for family units that require more separated living spaces at a competitive price.

Changi Court also comes with a full set of amenities, including tennis courts, swimming and wading pools, a gym, and a sauna.

Changi Court is located just 250 metres from DT34 Upper Changi MRT station and 4 kilometres from the airport.

Distance from MRT: 250m (DT34 Upper Changi MRT)
Developer: Allgreen Properties Limited
Total Units: 297
Total Floors: 10
Tenure: Freehold
TOP: 1997
3-bedroom Floor Size: 1,098 – 1,184 sqft

6. Glendale Park (Hillview)

A District 23 freehold with a median transacted price of $1,422 psf (3 bedrooms) in the past year. New developments here have seen the greatest price increases: the median transacted price for up-and-coming freehold properties is $1,628 psf.

The 3-bedroom units at Glendale Park are some of the more spacious units, ranging from 1,216 to 1,668 sqft. There is plenty of greenery and natural light, highlighted by floor to ceiling windows throughout the unit. Although only 20 years old, styling and aesthetics may feel a bit dated, and most of the listed units would benefit from some light renovation.

Glendale Park has full resort-style amenities and recreational facilities, with three tennis courts (2 hard and 1 soft). Adding to the resort-style ambience are several different water features, pavilions, and picnic / BBQ areas.

The development is just a couple hundred metres from Hillview MRT station and the Hillview Park Connector. Perfect for those who prefer to take public transport or go for runs/walks surrounded by greenery.

Distance from MRT: 210m (DT3 Hillview MRT)
Developer: Hill Grove Realty Limited
Total Units: 448
Total Floors: 10
Tenure: Freehold
TOP: 2000
3-bedroom Floor Size: 1,216 – 1,668 sqft

7. The Clearwater (Bedok Reservoir)

A District 16 property with a median transacted price of $1,084 psf (3 bedrooms) in the past year. In comparison, the District 16 median for the past 5 years is $1,476 psf for 99-year leaseholds.

The Clearwater has a wide range of 3-bedroom units from 1,195 sqft all the way to 1,916 sqft (some of the largest 3-bedroom units we’ve seen). Layouts are practical with rectangular rooms and living/dining configurations that maximise customisable space without impeding the flow of daily activities.

Although the development is 20 years old, a number of listed units have undergone extensive renovations with premium materials.

The Clearwater is just across the road from Bedok Reservoir and boasts unblocked views of the lush greenery while being just 220 metres from Bedok Reservoir MRT station.

Distance from MRT: 220m (DT30 Bedok Reservoir MRT)
Developer: Pidemco Land Ltd
Total Units: 420
Total Floors: 18
Tenure: 99-year Leasehold
TOP: 2001
3-bedroom Floor Size(s): 1,195 – 1,916 sqft

Property Cooling Measures 2021: What’s the Impact?

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Close to midnight on 15 December 2021, the Singapore government announced cooling measures to soften the heated property market. Below is an infographic summarizing all the changes!

Source: Ministry of National Development

Such cooling measures are not new. The last implementation was in July 2018. Private residential prices increased by 9.1% within one year after declining gradually for almost 4 years, prompting the implementation in 2018.

So what is the difference this time around?

Previously, the government announced the cooling measures earlier in the evening. This gave Singaporeans time to make last-minute purchases. Long queues and crowded show flats were reported, such as those at Park Colonial and Riverfront Residences.

Source: Channel News Asia

This time, the measures were announced close to midnight before the effective date of the cooling measures. Experts believe that the timing was a carefully considered move by the government. It prevented a reoccurrence of the long queues and crowds in 2018. With the current pandemic situation, this also reduces the chance of clusters that may lead to another wave of infections.

The latest implementation is the government’s reaction to a buoyant private residential and HDB resale market. Since the first quarter of 2020, prices for private housing saw an increase of 9%, while HDB resale value saw a 15% increase. Private home sales also rose 69.8% month-on-month in November.

What are the reasons for the hike in property prices?

1. High demand for housing

There has been an increase in demand for Built-To-Order (BTO) HDB flats. Some of the reasons cited by HDB include an increase in marriages and families formed, and changing social norms. Multigenerational families are now more interested in living on their own.

Demand for private properties has also been increasing. The improving economy and increasing demand for upgrading are some of the causes. Experts also say that the private property market may also enjoy a boost from an increase in foreign demand due to relaxations of pandemic measures.

2. Low supply

The construction sector in Singapore saw major disruptions during the pandemic. Construction companies faced difficulties sourcing affordable materials. Travel restrictions for foreign workers also caused labour shortages. This has affected the supply of housing in Singapore. With a low supply but high demand, property prices in Singapore have thus seen astounding increases.

Price hikes can be seen in the record number of HDB resale flats transacted at $1 million amid the pandemic. There were 261 million-dollar flats sold in 2021. In 2020, there were only 82 such flats. Do you know that Bluenest also sold a few resale HDB units at more than $1 million? It was even featured on Mothership! You can read more about it here!

So What’s the Impact of These Latest Cooling Measures on Homeowners in Singapore?

Increase in ABSD rates

What is ABSD? Introduced back in 2013, it is an additional tax that buyers would have to pay if they were to purchase another property.

The latest implementation would deter investors and foreigners from buying. Those who are unable to pay the additional tax for another property will contribute to the drop in demand. This will keep housing prices affordable.

Residential property developers will also feel a negative impact from this increase. The increased ABSD can only be remitted if the new development is completed and sold out in five years.

The impact is already showing in the en bloc market. Shun Tak Holdings, a Hong Kong-listed company, backed out of their en bloc purchase of High Point. They won the tender on December 9 for $556.7 million. Experts have attributed this move to the cooling measures. The revised ABSD rate would not have affected the developer. However, the increase of ABSD for property buyers will affect the demand for the development.

Source: Edgeprop

Prior to the announcement, the momentum for en bloc saw the highest number of successful cases since 2018.

Property developers will be more cautious now on where they purchase residential land. Demand for land will also be uneven as larger plots will have a lower demand as more units have to be sold.

Tighter TDSR threshold

Total Debt Servicing Ratio (TDSR) determines the maximum amount of loan one can take on. It is dependent on the borrower’s gross monthly income. With the new regulation, one can only have debt obligations of up to 55% of their gross monthly income.

Introduced back in 2013, the purpose was to encourage borrowers to be prudent when taking up property loans. It is only applicable to property loans granted by financial institutions.

The government hoped that the possibility of individuals going into debt will be lower. There have been reports that mortgage loans have caused a high percentage of households to be in debt.

Tightening TDSR will force households to make careful decisions when planning to upgrade or even purchase a property. This measure may also be helpful with an expected increase in interest rates.

Reduced LTV limits (for HDB-granted loans)

The loan-to-value (LTV) limit is a percentage of the property’s value that can be paid off by taking a loan. This is the maximum amount that an individual can borrow from a financial institution for a housing loan.

The recent change is only applicable to those taking up loans from the Housing Development Board (HDB). In 2017, the change affected loans granted by financial institutions only.

Experts believe that this change has a limited impact on property buyers. Financial institutions are usually the preferred option to secure a loan. They usually offer lower interest rates, although only 75% of the price or home value can be financed by these loans.

What Can We Expect in 2022?

In response to the low supply, the government has plans to increase the supply of private housing and ensure a stable private property market. 13 sites were released under the Government Land Sales Programme for the first half of 2022 after the cooling measures were announced. This comes after the government has been seeing strong demand for private housing which has caused rising transaction volumes and prices.

The government will also be increasing the supply of public housing. About 23,000 Built-to-Order (BTO) flats are expected to launch in 2022, 35% more than in 2021. Depending on the demand, the government has plans to launch 100,000 flats between 2021 to 2025.

Source: The Business Times

Our Final Take

The purpose of these cooling measures is to keep housing affordable for Singaporeans and Permanent Residents to stay. With these new measures coupled with low supply, 2022 would be a rather interesting year for the property market here in Singapore.

If you have any questions, please feel free to reach out and schedule a non-obligatory consultation with our Bluenest advisor.

At Bluenest, we sell our properties faster, better and more efficient than the other agents in the market. This is the result of our AI tools, personalized marketing strategy & top-notch agents. At only 1% commission fees, you get to enjoy best-in-class service and expertise!

Also read the 5 Lessons We Learned from Record-Breaking Flat Sales.

Speak to us at +65 3138 2553 or simply drop us a mail at hello@bluenest.sg