Overview of the Singapore Property Market – Top 10 Questions

1. Who can buy a property in Singapore?

There are three categories of properties you can buy in Singapore: 1) HDB flats; 2) Executive Condominiums (ECs); and 3) private properties. As a Singaporean you may purchase any category of property. Foreigners (Singapore permanent residents (PRs) and non-PRs who are approved purchasers under the Singapore Land Authority) face more restrictions. 

What Foreigners Can and Cannot Buy?1


2. Freehold vs leasehold?

Generally speaking for most Singaporeans, especially the older generation, they are willing to pay a premium to buy freehold properties. There is a belief that there is a shortage of freehold homes in Singapore, therefore they see their homes as a legacy that can be passed down to future generations.

According to an article by EdgeProp, while the difference in average prices between new and older condominiums does not vary too much in the first 20 years, there is a more significant variance for leasehold condominiums thereafter2. Indeed, this is because leasehold properties have an “expiry” date hence their value decreases as time goes by. 

For buyers looking for their own stay, they are likely to be more interested in which project offers the best  in terms of location, facilities and amenities given a certain budget rather than the land tenure per se. and for investors, leasehold projects typically offers a high yield, given their lower pricing. So ultimately, it really depends on the buyers’ intentions and motivations in buying a house. The land tenure is an important consideration, but it is just one of the many factors to take note of.


3. New launch vs resale?

Both new launches and resale properties have their pros and cons. For new launches, owners get a brand new unit, and everything is new – from the aircon to the toilet bowl, you will be the first user and you do get a warranty from the developer in case of any defects. This will appeal to people who believe that new is always better.

The flip side to this is that a potential buyer will have to wait. From the launch date to Temporary Occupation Permit (TOP) it is likely to take about 4 years. Hence one may need to rent a place in the interim, which will be an additional cost. Another so-called disadvantage is that new launches are typically priced at a premium to neighboring older projects, so it may not be within the buyer’s budget.

Indeed, the converse is true. The waiting time to move into a resale condo is shorter and should be priced at a discount to neighbouring new launches. However, the buyer may have to spend some money to renovate the place and that adds to the overall cost of purchasing the house.


4. Can I use my CPF?

You can use your CPF Ordinary Account (OA) savings to buy a property in Singapore. However, there is a limit on how much CPF savings you can use to finance your home purchase3.

5. Do the recent property cooling measures announced in December 2021 have any impact on the market?

Investors should not be too surprised by December’s cooling measures, given that the government has been highlighting its concerns on rising home prices in Singapore. That said, December measures are largely seen as “upsized” versions of existing cooling measures that have already been in place for many years hence we believe that any negative impact will be limited and short-term in nature.

6. HDB vs Condo?

Sometimes it makes sense to stretch a bit and jump into condo. If you buy Build-to-Order (BTO)  you have to wait for 4 years for construction and 5 years Minimum occupation period (MOP) before you can sell. By then you may be too old to buy your own condo because you are older and can take less loans.

7. If you buy a HDB, should you take a HDB loan or bank loan?

Bank loan as at end of December stands at approximately 1.5% (expected to increase as interest rates rise) versus HDB loan at 2.6%4.  However, for HDB loans, should the borrower choose to pay off the mortgage loan earlier than expected, it can be done without penalty. However, for a bank loan, there is usually an early repayment penalty.


8. What do we think of property prices in Singapore?

We expect prices to remain stable this year, growing in tandem with Gross Domestic Product (GDP).  Sure, there are headwinds in the market now, such as December 2021’s cooling measures and also rising interest rates. These are likely to weigh on investors’ mind. However, we believe the fundamentals of the property market remain strong. 

Singapore is slowly but surely getting out of the pandemic, with many prior COVID-19 restrictions being lifted now. Our economy expanded by 7.6% in 2021, a rebound from 4.1% contraction in 20205, while the unemployment rate remains very low. This means that homeowners still have very strong holding power to withstand an increase in mortgage rates this year.

Perhaps more importantly, the demand for resale HDB flats remains very strong. We believe that the HDB upgrading phenomenon that we experienced over the past 18 months will continue, thereby providing a strong platform for the mass market private residential market to remain firm this year.


9. Should I buy or rent a home?

There are many factors to consider when one is deciding whether to purchase or rent a property, such as affordability, level of commitment, intention, term of stay etc. Below are some of the key considerations summarized from PropertyGuru6:

10. Where to research?

Websites such as Stacked Homes write very useful and educational articles on the Singapore  property sector as a good starting point. One can also search for videos produced by realtors such as Propertylim Brothers on Youtube. It is important to work out the numbers; know what you can afford and buy within your means, otherwise, there will be long term problems in the future.


1Source: Property Guru, “What You Need to Know if You’re Buying Property in Singapore as a Foreigner (2022)”, 17 December 2021

2Source: EdgeProp, “Analysis: Does age matter? Impact of ageing on freehold and leaseholder condos”, 28 January 2022

3Source, DBS, “CPF for home purchase – factors to consider”, 10 May 2022

4MoneySmart, HDB Loan vs Bank Loan – Which is Better? 5 Things to Know Before You Commit (Dec 21), 16 December 2021

5Ministry of Trade and Industry Singapore, MTI Maintains 2022 GDP Growth Forecast at “3.0% to 5.0%”, 17 February 2022

6Source: PropertyGuru, “Renting vs Buying A Home in Singapore: Which Makes More Sense?”, 21 October 2020


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Comparing the TER cost for 20 years

Here’s the difference a low cost advantage makes to cost savings

Here's how much you pay

Selected TER 1.00% p.a.

LionGlobal All Seasons Fund 0.5% p.a.

By investing a fund with low TER

You may save $90,359.56 over 20 years based on an initial investment of $1,000,000 compared with a TER of 0.5% p.a.

It is enough to provide for a monthly expenditure of $3,000 over the next 2 years and 6 months.

Here's how much you pay

Selected TER 1.50% p.a.

LionGlobal All Seasons Fund 0.5% p.a.

By investing a fund with low TER

You may save $172,038.04 over 20 years based on an initial investment of $1,000,000 compared with a TER of 0.5% p.a.

It is enough to provide for a monthly expenditure of $3,000 over the next 4 years and 9 months.

Here's how much you pay

Selected TER 2.00% p.a.

LionGlobal All Seasons Fund 0.5% p.a.

By investing a fund with low TER

You may save $ 245,831.62 over 20 years based on an initial investment of $1,000,000 compared with a TER of 0.5% p.a.

It is enough to provide for a monthly expenditure of $3,000 over the next 6 years and 9 months.

TER (Total Expense Ratio) is the sum of various identified operating expenses charged on an ongoing basis to the fund’s assets as a percentage of the fund’s average net asset value calculated over a 12-month period at the close of the annual and semi-annual financial statements of the fund for all the p.a. tabs (1.0%, 1.5%, 2.0%).

The above scenarios are for illustration purpose only. Past performance, as well as any prediction, projection or forecast on the economy, securities market or the economic trends of the markets are not necessarily indicative of the future or likely performance of the funds. Calculations based purely on costs with no market movement or investment returns.