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Types Of Housing In Singapore

October 16th, 2015

There are basically two housing types in Singapore, Public and Private.

High Rise Building Rental Singapore

Public Housing

Public housing is developed by the Housing Development Board (HDB) and is partially subsidised by the government. Up to 85 percent of Singapore residents live in public housing since it is more affordable than private housing.

Public Housing, more commonly known as HDB flats, do not come with private facilities available in some condominiums and private apartments for example, swimming pools, gymnasiums or private security.

As a foreigner,You are not able to rent a flat directly from HDB, since HDB only provides subsidies rental flats to low income Singaporeans, however, selected HDB owners are allowed to rent out their flats after their Minimum Occupation Period and you may rent these flats in a Private Agreement with them. You may look for available listings of rooms or entire flats for rent in advertisements appearing in the Classified Ads (CATS) in the Straits Times, in online portals such as PropertyGuru, 99.co, SRX as well as STProperty.

HDB flat owners do not need approval from HDB to rent out individual rooms in their flat but they need to register with HDB within 7 days and satisfy certain conditions, including submitting the tenants’ particulars .    Owners leasing out their entire flat require written approval from HDB. If you are renting an entire flat, you may request the flat owner show you a copy of the approval letter.

Please visit www.hdb.gov.sg for more information on renting HDB flats.

Private Housing 

Private housing In Singapore offers a wider, albeit more expensive choice of accommodation, from condominiums and private apartments to landed properties like detached bungalows, semi-detached and terrace (row) houses.

Condominiums come with a security guard and facilities, while detatched bungalows ( Semi-ds), etc, typically do not have additional security but give you the advantage of space. ( Landed homes are typically 3000sqft and above. )

(Note to MOM: Foreigners should also comply with existing URA regulations when renting a flat. For example, there should not be more than eight persons staying in each unit. Please check with URA for more info.)

Leasing a Property

Once you have selected a property, one of the things to do is to verify the landlord’s authenticity. It is also a good idea to include your ‘wish list’ of the various items you wish to be addressed in the lease in the Letter of Intent (LOI) which expresses your interest in the property. On signing the Letter of Intent/ Offer, you will be required to pay a holding deposit equivalent to 1 month’s rent to the landlord.This holding deposit will go into your first month’s rent on entering into the Tenancy Agreement. Rent in Singapore is paid in advance.

The LOI will ensure that the property will be taken off the market while you negotiate the clauses in main Tenancy Agreement. Read through and check with your lawyers if you are not satisfied with certain clauses.

You should read the terms and conditions in the Tenancy Agreement carefully before signing so as to reduce potential disputes. You may also negotiate the terms and conditions with your Salesperson.

There are prescribed Estate Agency Agreements that you can use for your property transaction. The form can be downloaded from the CEA website. The “Consumer Tips for engaging a real estate salesperson” also contain useful information for your reference when engaging a salesperson to rent a property.

On finalising the terms of the Tenancy Agreement and during the handover of the property, check that all your ‘wish list’ items have been addressed. During the handover, do make a point to document any defects you may find at the property.

Cost Considerations

As the tenant, you are required to pay a security deposit equivalent to the number of year(s) leased. The normal practice is 1 month for every year leased. This security deposit is refundable at the end of the lease subject to the condition in which the property is returned to the landlord. As the tenant, you are also required to pay the Stamp Fees to legalise the tenancy agreement.

After the handover of the property, you will need to pay your Estate Agent the agreed commission. Commissions should not be paid to your Salesperson directly.

Single Homeowners In Singapore

October 11th, 2015

Homeowner Rules for Singles. 

If you read in the news, the housing policies in Singapore isn’t exactly favourable to Singles. Considering that 80 % of Singaporeans live in public housing, this is not very good news.

Public housing has restrictions on them purchasing HDB Flats , i.e. you have to be 35 years old and older to purchase them alone (either that or you have to find another single who is in the same predicament as you), and even so, if you intend to buy a new Flat, it can only be 2 rooms and smaller. (Super tiny, trust me.)

Purchasing Properties for singles

Is private property a choice for you? 

So for most Single professionals, private homes are the only way to go. The property market in Singapore, has been undergoing cooling measures, which has brought the prices down slightly. About 8% so far. Even though this is not exactly cheap, it’s a start.

In addition, as part of the cooling measures, people who own multiple properties would have to pay an additional stamp duty to IRAS (the property tax collector in Singapore), which makes it a better situation for first time home owners who are single.

Unfortunately, the cooling measures also came with a host of other limitations, for example the TDSR, the total Debt Servicing Ratio. The TDSR is a method of calculation, which limits the loan that you can get from the banks. The new method of calculation takes into consideration your total loans, including credit card and car loans.

If the cooling measures didn’t affect you too much and you can still afford to purchase one, you’re in for a treat since the supply glut allows you to shop to your hearts content. There are more condos than buyers so you might get to own a Singapore property at bargain prices.

However, there are somethings that you might want to consider if you are a Single who wants to buy a piece of real estate now

Pros

  • Supply is in your favour.
  • A lot of Variety means that you have choice.
  • Prices are on the downtrend so you might get a good offer
  • If you opt for new condos, they are significantly cheaper now than when they are ready for occupation. If your CPF is just staying idle in your account, you might as well put it into an investment which can capital appreciation a few years down the road.

Cons

  • No one knows how low prices could go. While the demand is simulated and controlled by the government, developers might be forced to cut their losses and give more significant discounts. This might be more significant for smaller developers rather than public listed ones, since the public companies are accountable to their share holders.
  • If you are intending to rent it out, don’t purchase a ready property for occupation just yet. Rental demand is especially low and you will be forced to pay a full mortgage instead of a progressive payment. Unless you are willing to reduce your rental prices to cut YOUR losses, don’t do it.

If you are a single under 35 who’s in a good financial position to buy a private property in Singapore, you should look through your options soon. Study the market but don’t wait too long incase you miss your chance to own one. I think that the market is volatile and as soon as the government removes the cooling measures ( which might be soon if they want to increase growth post election) you might be priced out of the market sooner than you realize.