Buying property in Singapore is the ultimate aspiration of many Singaporeans. May it be an HDB flat, executive condominium, private units or landed homes, there’s nothing more rewarding than acquiring a piece of land you can call your own. However, buying a property most especially in Singapore is never easy. Known for exuberantly priced housing projects, strict requirements and government-imposed regulations, finding the perfect home for you and your family can be downright stressful.
With its unique, highly volatile and ever-changing real estate market, there are few important things you need to keep in mind before buying a property in Singapore. To avoid making wrong decisions that can later wreck your finances as well as bring disappointments to your family, check out these Singapore property buying tips below.
3 Things to Consider When Buying Property in Singapore
1. Review and Asses your Financial Capability
The first and probably the most important thing you need to consider is your finances. If you don’t own a huge amount of sum in your bank, it is wise to review and assess your financial capability before making any property purchase. Your financial status clearly dictates what property you can afford and up to what extent you can advance further when making selections. Though, always remember that you should not go beyond your means.
a) Loan Approval-in-Principle
When a lender pre-approves a borrower the loan they are applying for, this is called Approval-in-Principle. Although this is not a final decision yet, the lender assumes that the borrower has met the requirements needed for the said loan application. Approval-in-Principle is also called pre-approval or conditional home loan approval. To avoid forfeiting option monies, make sure to get a secured housing loan first via approval-in-principle.
b) Central Provident Fund Usage
On both private and public property purchase, you can use your CPF to pay off down payments or extra levies. However, keep in mind that there is a limit on how much CPF you can use to fund your property. For more details about the use of CPF when buying a property in Singapore, check out this Ultimate Guide to Using CPF for Buying Properties.
c) Income Stability
Your present and future income are both important with regards to Singapore property buying. With your present income, it will dictate the most appropriate type of property you are able to purchase based on your current earnings. Conversely, your future income is a good indicator to anticipate the monthly home loan payments you need to settle in the coming years. If your income is unstable, it is best to have a backup fund in case the unexpected thing happens.
2. Check the Details of the Property
Next on these tips buying a property in Singapore, the details of the property clearly matter. You need to make sure that the location is good, there are developments in the area, the place is near major establishments, the structure of the property is resilient, the amenities being offered are top-notch, and all others.
a) Location is Essential
It is always told that location is the most vital thing you need to consider when buying a property in Singapore. While it might sound cliché, this indeed is very true. If the property you are eyeing is located within a major district, expect it to be more expensive and highly sought after. Those who don’t have a budget, on the other hand, can settle to city-fringe developments that are more affordable yet situated still close to the city.
b) Convenience and Accessibility
Choose a property that is well-connected to public transport such as expressways and MRT. Being accessible to train stations is a big plus especially if you plan to rent out your property in the near future. Additionally, make sure that the property is close to major establishments such as malls, hospitals, banks, schools, parks, and all others. If you’re unfamiliar with the community, it is advised to check the URA master plan for future developments in the area.
c) Property Features
Depending on the type of property you ought to purchase, the features it includes may vary. Most condominiums are equipped with swimming pools, function rooms, gym, car parks, concierge services, etc. Gated homes, on the other hand, focuses more on spacious parks, clubhouse, playground, and security of unit owners. Always check the features of the property before making a down payment, ask for the facilities and amenities you can enjoy as the property owner.
3. Learn the Art of Negotiation
Finally, on these tips buying a property in Singapore, learning the art of negotiation is without a doubt indispensable. This will definitely help you save a good amount of cash. In Singapore, there is a common misconception that property negotiation is only applicable to resale homes or condominiums. While this, in fact, is very true when purchasing resale units, because you can easily negotiate the price with the current owner, price negotiation is also applicable to new property launches.
a) Check the Current Property Market
Matching the seller’s asking price will make the whole process easy but it will not help you save a good amount of cash. Besides, you can’t make an offer that is way too low beyond the current property price. To make sure that your offer is within the acceptable limits, always check the current pricing in the property market. Rates will surely be volatile but at least you have an idea of what’s the acceptable price and what’s not.
b) Bargaining on New Property Launches
There is a huge misconception that new property launches are always priced “fixed”. For well-selling projects, this is absolutely true. Though, it is still possible to bargain on new property launches depending on its current market status and unit availability. If the development has been on the market for quite some time and there are still tons of units left unsold, you can negotiate for a better price. You can equally ask for exclusive services and features in exchange for lowering the unit price. An example would be including appliances, shelving, and home accessories rather than lowering the price 5% cheaper than the original.
Before buying a property in Singapore, may it be for rental investment or sole residential purposes, always keep in mind these 3 essential factors. Along with other tips you know at heart, don’t forget to scrutinize things before you commit to any purchase.
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