1) Not Understanding Singapore’s Residential Property Market

2) Not Engaging a Qualified Property Agent

3) Not Checking the Property’s Title

4) Not Factoring in Additional Costs

5) Not Understanding the Financing Options

6) Not Having an Exit Plan

8) Not Considering Resale Value

Closing Thoughts

The post Top 7 Mistakes Foreign Buyers Should Avoid When Buying Residential Property in Singapore appeared first on Insights by PropertyLimBrothers.

Singapore is one of the most sought-after locations for property investments in Southeast Asia, thanks to its stable economy, high living standards, and cosmopolitan culture. However, foreign buyers who are interested in purchasing a property in Singapore must take note of the various taxes and fees that they are required to pay. These taxes are imposed by the government to regulate the property market and ensure that it remains affordable for Singaporean citizens. Understanding these taxes is essential for foreign buyers to make informed decisions and avoid any unexpected costs.

In this article, we will delve deeper into the taxes that foreign buyers have to take note of when purchasing a property in Singapore. We will be breaking these taxes down in terms of the type of properties in question.

Residential Property Taxes

Residential property in Singapore refers to any type of property that is designed and intended for individuals or families to live in. This includes apartments, condominiums, landed properties such as bungalows and terraced houses, as well as HDB (Housing and Development Board) flats.

In Singapore, residential properties are highly sought after due to the city-state’s limited land area and high population density. As such, the residential property market in Singapore is highly competitive, with prices that can vary greatly depending on factors such as location, size, and amenities.

Buyer’s Stamp Duty (BSD)

The first tax that foreign buyers should take note of is the Buyer’s Stamp Duty (BSD). The BSD is a tax levied on all property purchases in Singapore. As the name suggests, only the buying party has to pay this tax. The BSD amount is calculated based on the purchase price mentioned in the document or the market value of the property, whichever is higher. In the recent Budget 2023, it was announced that BSD rates for higher-value residential and non-residential properties would be raised with effect from 15 Feb 2023. Below are the current BSD rates for residential properties, as at the time of writing.

It is important to understand that the Buyer’s Stamp Duty (BSD) is not a flat tax but a progressive one. This means that the percentage rates of BSD will be applied to different market value brackets of the property being acquired, tabulated up to the full purchase or valuation price. To make this clearer, let’s take an example:

Additional Buyer’s Stamp Duty (ABSD)

For foreign buyers who are not permanent residents, an additional tax called the Additional Buyer’s Stamp Duty (ABSD) will be levied on any residential property purchase.

In response to the surging demand for residential properties in Singapore’s real estate market, the government implemented the ABSD in 2011. This measure is intended to cool down the property market and manage the demand.

It is crucial to note that ABSD is exclusively applicable to residential properties, and the rates vary depending on the residency status of the buyer. In December 2021, the latest ABSD rates were announced, and the current rates are as follows:

• For SPRs, a 5% ABSD is mandatory for their first property, 30% for their second property, and 35% for their third and subsequent properties.
• Foreign buyers who are not SPRs, are required to pay a flat rate of 60% ABSD on all properties they acquire.

Below is a comprehensive table comparing the ABSD rates for different residency statuses. Foreign buyers need to take note of these rates as they can significantly impact the overall cost of buying a property in Singapore.

Annual Property Tax

Property tax is a wealth tax levied on the ownership of properties, regardless of whether the property is occupied or vacant. However, to encourage home ownership, the rates for owner-occupier residential properties are set lower than that of non-owner-occupier residential properties and non-residential properties. Owner-occupier residential properties are residential properties where the owner lives in the property.

Property tax is calculated by a progressive tax model, and the amount payable is calculated by multiplying the tax rate with the annual value (AV) of the unit. The AV of a property is derived from an estimate of the potential rental income it could generate if leased out, taking into account the current market value of comparable properties.

Because of the rise in market rents, the AVs of properties have increased. To reflect this trend, the authorities have revised the property tax rates for 2023 and 2024. Below is a concise table showing the owner-occupier tax rates.

As mentioned, the annual property tax is a progressive tax model. Below is an example of the property tax payable for a residential property with an AV of $84,000.

Seller’s Stamp Duty (SSD)

In order to prevent the flipping of properties in Singapore, the Seller’s Stamp Duty (SSD) is levied on residential properties that are sold within 3 years of acquisition. Similar to the BSD, SSD rates are based on the selling price or current market value of the property, whichever is higher.

The current SSD rates are as follows:

However, foreigners are exempted from SSD when they have to sell their residential properties in Singapore as required under the Residential Property Act. For example, under the Residential Property Act, a foreigner is required to obtain approval from the Singapore Land Authority (SLA) before acquiring certain types of residential property, such as landed property. If a foreigner acquires landed property but fails to obtain the requisite approval, they would then have to sell the property. When doing so, SSD will not apply.

Non-Residential Property Taxes

Non-residential property in Singapore refers to any property that is not intended for residential use. This can include commercial buildings, industrial facilities, retail spaces, and office spaces. Non-residential properties are generally used for business purposes, such as manufacturing, trading, or providing services.

Commercial properties, for instance, are often used for retail or office purposes, while industrial properties are used for manufacturing or production. Retail spaces are typically used for businesses that require a physical storefront, such as shops or restaurants, while office spaces are used for businesses that require administrative or professional workspaces.

Non-residential properties in Singapore are subject to different regulations and taxes than residential properties.

Not Applicable: Additional Buyer’s Stamp Duty (ABSD)

One of the biggest advantages of investing in non-residential properties in Singapore as a foreigner is that the ABSD does not extend to commercial and industrial properties. Unlike residential properties, foreign buyers of commercial and industrial properties are not obligated to pay an upfront ABSD fee, which is set at 60% of the purchase price for residential properties.

This exemption is particularly advantageous as it allows foreign investors to invest in these types of properties without the burden of a substantial tax liability, which is often a significant barrier to entry for residential property buyers.

Furthermore, it provides foreign investors with greater flexibility to diversify their investment portfolios and allocate their capital to various asset classes. By offering this exemption, Singapore is providing foreign investors with an attractive opportunity to invest in the country’s commercial and industrial property sectors and enhance their investment strategies.

Buyer’s Stamp Duty (BSD)

Similar to residential properties, the Buyer’s Stamp Duty (BSD) is applicable for non-residential properties as well. However, the rates are slightly different. Below is a table showing the latest BSD rates for non-residential properties:

The BSD for non-resident properties is also a progressive tax, which means that the percentage rates will be applied to different market value brackets of the property being acquired, tabulated up to the full purchase or valuation price (whichever is higher).

Goods & Services Tax (GST)

When purchasing a commercial property from a company that is registered for Goods and Services Tax (GST), buyers must pay GST, which is currently set at 8%, on the purchase price. However, if the buyer themselves is also registered for GST, they can claim back the amount paid. Conversely, if the buyer is not registered for GST, they must pay the full amount without the possibility of a rebate. This factor should be carefully weighed in the overall investment decision, as it can impact the total cost of the property.

It is important to keep in mind that if the property is subject to GST, the same tax will also be applicable to the rent collected from that property. Thus, investors need to be aware of this additional expense and incorporate it into their financial projections.

Looking towards the future, it is vital to note that the GST rate is set to increase by 1% in 2024, bringing the total up to 9% GST. This upcoming change should also be taken into consideration when assessing the overall costs associated with the investment.

It is crucial to follow the law regarding GST, as collecting GST on the rent of a commercial or industrial property when not registered for it is illegal and considered a criminal offence. Therefore, it is essential to be aware of the applicable regulations and ensure compliance to avoid any legal repercussions.

Seller’s Stamp Duty (SSD) for Industrial Properties

Short-term sale of industrial properties will be subjected to the Seller’s Stamp Duty (SSD). This applies to industrial properties (warehouses, factories, etc.) but not commercial properties (offices, shops, medical suites, shophouses) and is a key factor that distinguishes these two types of non-residential property. Below is a breakdown of the current SSD rates for industrial properties.

Annual Property Tax

Like residential properties, non-residential properties are also subjected to property tax. Non-residential properties are subjected to a flat tax of 10% of the AV. Owner-occupier tax rates will not apply to non-residential properties even if bought for own use or occupation.

Below is an example of the property tax payable for a non-residential property with an AV of $54,000.

Closing Thoughts

In summary, the property tax applicable for foreign buyers in Singapore is an important consideration for those looking to invest in the Singapore’s real estate market. With tax policies such as ABSD and other restrictions for foreign buyers, it has become more challenging for foreigners to purchase properties in Singapore. However, these measures have been put in place to ensure that the housing market remains stable and accessible for Singaporeans. 

Despite the tax policies, Singapore remains an attractive destination for property investments due to its strong economy, political stability, and strategic location. Overall, the property tax policies may act as a deterrent for some foreign buyers, but for those who are willing to navigate the tax landscape, the rewards of investing in Singapore’s property market can be significant.

If you need help navigating the property landscape in Singapore, do not hesitate to reach out to us here for guidance or a second opinion.

Disclaimer: The information provided in this article is accurate as of the date of publication and is based on the rules and regulations concerning stamp duty rates and taxes in effect at the time. While we strive to update our past articles diligently, please be aware that tax laws and regulations can change frequently, and it is essential to verify the most current rules and guidelines from the relevant government authorities or consult with a qualified professional for the latest updates and accurate advice.

The post From ABSD to SSD: A Deep Dive into Singapore’s Property Tax Landscape for Foreign Buyers appeared first on Insights by PropertyLimBrothers.

Singapore is one of the most popular destinations for expats and foreign investors due to its stable political climate, strong economy, and strategic location in Southeast Asia. As a result, our city-state has attracted a large number of foreigners who are interested in investing in its real estate market. However, buying property in Singapore as a foreigner can be a complex process, as there are various rules and regulations that govern foreign ownership. If you are a foreign buyer or investor looking to purchase a property in Singapore, we invite you to read our step-by-step guide of the whole process. 

In this article, we will explore the types of properties that foreigners can buy in Singapore and the regulations surrounding foreign ownership of property. 

Residential Properties: Residency Status Matters

When it comes to buying a residential property in Singapore, residency status matters. According to the Residential Property Act, foreigners are permitted to own residential properties here, albeit with some limitations. Notably, there is a significant disparity between a Singapore Permanent Resident (SPR) and a foreign buyer (non-SPR), where SPRs are afforded the opportunity to purchase housing from both the public and private housing market, contingent upon certain eligibility criteria. Conversely, non-SPRs are only able to purchase properties from the private housing market. 

This distinction underscores the importance of understanding the specific regulations surrounding foreign ownership of residential properties in Singapore.

In the next sections, we will break down the residential property market into public housing and private housing, highlighting which types of properties are available to foreigners and the various restrictions and eligibility criteria.

Public Housing

In Singapore, public housing refers to HDB (Housing & Development Board) flats – these are primarily flats that the government has set aside for Singapore Citizens. New HDB flats can be purchased via public housing schemes such as the Build-to-Order (BTO) or Sale of Balance Flats (SBF) exercises. Older HDB flats bought from the open market are known as resale HDB flats. New launch Executive Condominiums (ECs) also fall under this category, until they pass their 5-year Minimum Occupation Period (MOP). ECs become available to PRs after 5 years, and will be fully privatised and available to foreigners after 10 years. 

Foreigners who are not PRs will not be eligible to buy HDB flats – that is, if they are buying alone. When it comes to foreigners buying a property jointly with others, their residency statuses can have a significant impact on the types of properties they are eligible to purchase. Different groups of individuals are subject to varying levels of restrictions, depending on their residency status. Below is a table showing the various combinations.

If both parties of the couple are SPRs, they may be eligible to purchase a resale HDB flat under the Family or Fiancé Scheme, provided that they have held their PR status for at least three years. Additionally, they can opt to buy resale ECs that have already fulfilled their 5-year MOP, or ECs that are more than 10 years old.

If one of the purchasers is an SPR and the other a foreigner, they can buy resale ECs that have already fulfilled their 5-year MOP as well as fully privatised ECs that are over 10 years old.

A couple consisting of two foreigners who are not SPRs are only allowed to purchase ECs that are more than a decade old. Unfortunately, there are no additional privileges granted to them.

Lastly, in cases where at least one of the couple is a Singapore Citizen (SC), more options become available. A SC and SPR couple can ballot for a Build-to-Order (BTO)/Sale of Balance Flats (SBF) flat or buy an HDB flat or EC from the resale market. Meanwhile, a SC and foreigner couple can also ballot for a BTO/SBF flat, but will only be limited to purchasing 2-room Flexi flats in non-mature estates. For more information, you may refer to the HDB website for the guidelines. 

Private Housing

Private housing in Singapore refers to residential properties that are owned and developed by private developers or individuals, as opposed to public housing that is built and managed by the Housing and Development Board (HDB) or the Urban Redevelopment Authority (URA). Private housing can take the form of apartments, condominiums, landed houses, and ECs, and is generally considered to be more upscale and luxurious than public housing.

Singapore has a welcoming policy towards foreign homebuyers, particularly in the private housing market, where fewer restrictions apply to their residency status. Unlike public housing, foreigners looking to purchase a private residential property are not limited by location, and their residency status will only affect the Additional Buyers’ Stamp Duty (ABSD) rates that they have to pay. They are also not subjected to the MOP before renting out or selling the properties they own in Singapore.

Below is a table that summarises the types of private residential properties that foreigners are eligible to purchase. 

Foreign investors who are interested in purchasing landed properties in Singapore are required to first seek approval from the Land Dealings Approval Unit (LDAU) of the Singapore Land Authority (SLA). 

The application process for approval is assessed on a case-by-case basis and takes into consideration several factors such as the applicant’s permanent residency status in Singapore for a minimum of five years and their economic contributions to the country, such as their employment income that is taxable in Singapore. The only way to bypass the approval process is by buying a leasehold landed property with seven years or less remaining lease. Such properties can be bought without SLA approval.  

Coming to the restrictions, foreign buyers purchasing a landed residential property are restricted to those that do not exceed 15,000 sqft and are not located within a good class bungalow area. Those who wish to purchase such properties will be subject to much more stringent qualifying criteria.

On the other hand, the criteria for purchasing properties in Sentosa Cove are less stringent, albeit still requiring the LDAU’s approval. Foreign buyers only need to use the property solely for their own occupation and that of their family members as a dwelling house, and not for rental or any other purpose. The only limitation is that the property must not exceed 1,800 sqm in size.

Non-Residential Properties: Diversification of Portfolio

In recent years, Singapore has seen a growing interest in non-residential properties as a key investment opportunity for foreign investors. With a highly developed economy, stable political climate, and business-friendly environment, Singapore offers a wealth of opportunities for investors seeking to diversify their portfolios through non-residential property investments.

Non-residential properties in Singapore include a diverse range of asset classes such as commercial offices, retail spaces, commercial shophouses, industrial facilities, and hospitality properties. These properties offer investors a chance to tap into Singapore’s economy, which has seen consistent growth in recent years. Additionally, the government has implemented various policies and initiatives to support the growth of these sectors, such as the development of new business parks, improved infrastructure, and tax incentives. 

One major advantage of investing in commercial and industrial properties is that the ABSD does not apply. Unlike residential properties, foreign investors purchasing commercial or industrial properties are not required to pay an initial ABSD, which is currently set at 30% of the purchase price for residential properties. In essence, this provision makes commercial and industrial properties in Singapore more accessible and appealing to foreign investors, as they are not required to factor in the significant ABSD costs in their investment decisions.

For more on the pros and cons of investing in commercial and industrial properties, do check out this article.

Closing Thoughts

In summary, Singapore offers a diverse range of properties that foreigners can purchase, including condominiums, landed homes, and commercial properties. While the process of buying a property as a foreigner in Singapore can be daunting with various restrictions and regulations in place, there are many resources available for you to do your research before making your property decisions. 

If you have any questions about the process or would like guidance in navigating the market, we invite you to reach out to our PropertyLimBrothers team. Our experienced and knowledgeable team can provide you with the latest market trends and analyses, as well as advise you on whether your investment would be prudent and where the best opportunities lie.

We understand that investing in real estate can be a significant decision, and our team is committed to providing you with the support you need to make informed choices. Contact us today to learn more about how we can help you achieve your real estate goals in Singapore.

The post What Types of Properties Can You Buy as a Foreigner in Singapore? appeared first on Insights by PropertyLimBrothers.

Singapore is a thriving hub of business and commerce in Southeast Asia, with a highly developed economy and a robust real estate market. For foreigners looking to invest in property in Singapore, there are a range of options available, including commercial and industrial properties. Commercial properties include offices, retail spaces, and other business premises, while industrial properties are typically used for manufacturing, storage, and other industrial purposes.

However, the decision to invest in commercial or industrial properties can be a complex one, with a range of factors to consider, including market trends, investment goals, and local regulations. In this article, we will explore the pros and cons of investing in commercial or industrial properties in Singapore as a foreigner, and provide practical advice on how to make the most of your investment. We will examine the current state of the Singapore property market, including key trends and developments, and provide insights into the unique challenges and opportunities facing foreign investors in this dynamic and competitive market.

Whether you are a seasoned property investor or a first-time buyer, this article will provide valuable insights and practical tips to help you make an informed decision about investing in commercial or industrial properties in Singapore. By understanding the key factors that influence property investment in Singapore, you can maximise your investment potential and achieve your financial goals in this vibrant and dynamic city-state.

Why Look at Commercial or Industrial Properties in the First Place?

An important factor to consider when investing in commercial or industrial real estate in Singapore is the Additional Buyer’s Stamp Duty (ABSD). ABSD is a tax imposed by the Singapore government on buyers purchasing residential properties, including apartments, condos, and landed homes. The purpose of ABSD is to regulate the residential property market by curbing demand and controlling property prices, particularly for foreign demand which might inflate property prices in Singapore.

However, it is worth noting that ABSD does not apply to commercial and industrial property investments for foreigners. This means that foreign investors who purchase commercial or industrial properties in Singapore are not subject to ABSD, which can significantly reduce the overall cost of investment. In contrast to residential properties, foreign buyers of commercial and industrial properties are not required to pay an upfront ABSD, which is 60% of the purchase price for residential properties as of April 2023.

The exemption of ABSD for commercial and industrial property investments is seen as an attractive incentive for foreign investors who are seeking to invest in Singapore’s property market. This is because the exemption allows foreign investors to invest in commercial and industrial properties without incurring a significant tax burden, which can be a barrier to entry for many residential property buyers. In addition, it provides more flexibility for foreign investors to diversify their investment portfolios and allocate their capital to different asset classes.

However, it is important to keep in mind that there are still other taxes and fees associated with investing in commercial and industrial properties. For instance, property tax is imposed on all property owners in Singapore and is calculated based on the annual value of the property. Additionally, Seller’s Stamp Duty is payable on the short-term sale of industrial properties. This Seller’s Stamp Duty applies to industrial properties (warehouses, factories, etc.) but not commercial properties (offices, shops, medical suites, shophouses) and is a key distinguishing factor between these two types of non-residential property. 

This greatly affects the investment flexibility. Most investors would favour commercial properties unless they are planning to use the industrial property for the purposes of their own business. Therefore, foreign investors should carefully consider the overall costs and benefits of investing in commercial or industrial properties in Singapore, taking into account the various taxes and fees associated with such investments.

In summary, the ABSD exemption for commercial and industrial property investments is the key distinguishing factor when it comes to making these investments more attractive than residential properties to foreign investors. Even for local investors, commercial and industrial properties would be another avenue to owning multiple properties without incurring ABSD.

The Benefits of Investing in Commercial or Industrial Properties in Singapore

Investing in commercial or industrial properties is an attractive option for many investors due to a variety of reasons. Firstly, commercial and industrial properties generally offer higher rental yields (~5%) when compared to residential properties (~2-3%). Businesses and industrial tenants usually sign longer leases and are willing to pay higher rents for properties that can support their operations, making them a more compelling option for investors looking for a steady stream of rental income. 

Moreover, investing in commercial and industrial properties can provide an additional layer of diversification to an investor’s portfolio. These types of properties have a different risk profile compared to residential properties, and can offer a hedge against market volatility. As a result, they are popular options for investors who are looking to diversify their investment portfolio. Do note that diversification for diversification’s sake may also have a chance of hurting performance without meaningfully reducing your portfolio risk.

In addition, commercial and industrial properties also have the potential for capital appreciation over the long term. Singapore is a thriving hub of business and commerce in Southeast Asia, and as the city-state continues to grow and develop, demand for commercial and industrial space is likely to increase. This is expected to drive up prices and lead to potential capital appreciation for investors. On this aspect, investors would need to be keenly aware of the sectors that Singapore is known for. The preferences of these businesses on their operating locale will determine not only the capital appreciation but also the rental yield. Thus, the choice of location and type of commercial or industrial property seriously matters

Furthermore, commercial and industrial tenants often have greater stability compared to residential tenants. Businesses and industrial tenants typically have more resources and are more likely to have the financial stability to support their operations. This can provide a more stable and predictable income stream for investors. Singapore is also in 2nd place on the World Bank rankings for ease of doing business among 190 other economies. This would greatly help bring in more global businesses and help the formation of new businesses in Singapore, both of which are good news for commercial and industrial property investors.

Finally, investing in commercial and industrial properties can also offer potential tax benefits, such as deductions for mortgage interest payments, property taxes, and depreciation. This can provide significant savings for investors running their own businesses in the commercial or industrial property and are looking to maximise their return on investment.

However, it is important to carefully consider the unique risks and challenges associated with investing in these types of properties. Market volatility, regulatory compliance, and property management requirements are just a few of the potential risks that investors should be aware of before investing in commercial or industrial properties. In the next section, we will explore the key disadvantages of commercial and industrial properties that you need to be aware of if you are considering investing in these assets.

The Disadvantages of Commercial & Industrial Properties that You Need to be Aware of

Investing in commercial or industrial properties can be a lucrative opportunity for many investors, but it also comes with certain disadvantages that investors should be aware of before making any investment decisions. One major disadvantage is the higher upfront costs associated with these types of properties. Commercial and industrial properties tend to be larger than residential properties and require more specialised features to support business operations, such as loading bays, specialised machinery, and office spaces. These features can increase the overall cost of the property and require a higher level of capital investment.

The cash outlay required for commercial and industrial properties will feel a lot higher for local investors as you cannot use your CPF for the down payment. The loan-to-value ratio typically stands at around 80% but could be much less depending on the financial health of the individual or company that intends to purchase the commercial property. TDSR will apply to individuals purchasing non-residential properties as well. While not a necessary condition, investors with a business entity (with a good financial history) to enter into commercial and industrial property investments. Individual investors might have to fork out larger amounts of cash depending on the LTV situation with the bank loan.

Although commercial or industrial properties are not subject to ABSD, there are other considerations that foreign investors should keep in mind. For instance, when purchasing a commercial property from a GST-registered company, buyers are required to pay GST on the purchase price. However, if the buyer is also registered for GST, they can claim back the amount paid. Conversely, if the buyer is not registered for GST, they must pay the full amount. This can have an impact on the overall cost of the investment and should be factored into the investment decision. Additionally, it’s important to note that if GST is applicable to the property, it will also be applicable to the rent collected from that property. Investors will need to remember that the GST rate is going to increase by another 1% in 2024, bringing the total up to 9% GST. It is also important to note that if you are not a GST-registered entity, you are not allowed to collect GST on the rent of the commercial or industrial property, that would be a crime.

Another disadvantage is the longer vacancy periods associated with commercial and industrial properties. These properties can take longer to find tenants than residential properties, as businesses and industrial tenants may require more specific features or modifications to the property in order to accommodate their needs. As a result, vacancy periods can be longer and result in a loss of income for the investor. Thus, the tenant-owner relationship for commercial and industrial properties is very important. Each should consider the other as a business partner in some sense, since the tenancy is likely a long-term affair.

Moreover, commercial and industrial properties tend to have higher management and maintenance costs than residential properties. This is due to the more complex features and specialised systems required to support business operations, such as elevators, heating, ventilation, and air conditioning (HVAC) systems, and parking lots. Furthermore, commercial and industrial properties often have multiple tenants, which can increase the management and administrative burden on the investor. This depends on the type of commercial and industrial property investors are going for. From retail, offices, medical suites, to shophouses and factories, there are many different options. These management and maintenance costs can vary dramatically depending on the type of commercial or industrial property.

Another potential disadvantage of investing in commercial or industrial properties is the higher risk of being impacted by economic downturns. During times of economic uncertainty, businesses and industrial tenants may be more likely to downsize or close, which can impact the investor’s rental income and overall return on investment. This can be a significant risk for investors, especially those who have invested a large amount of capital into a commercial or industrial property. This is a much larger risk for non-residential properties as they are more greatly affected by economic downtowns. Depending on the type of commercial or industrial property, it will face a varying level of impact based on the type of sector its tenants belong to (e.g. manufacturing, healthcare, etc.).

Lastly, commercial and industrial properties are subject to a variety of regulatory requirements, such as zoning laws, building codes, and environmental regulations. This can be a complex and time-consuming process for investors, as they must comply with these regulations in order to avoid penalties and ensure the property is safe and suitable for tenants. This is especially so for foreign investors who are new to Singapore’s property market. Which is also why it is important to find a competent, experienced, and well-informed realtor on this property segment.

While investing in commercial or industrial properties can offer attractive rental yields, diversification, and potential capital appreciation, it also comes with certain disadvantages that investors should carefully consider before making any investment decisions. These include higher upfront costs, longer vacancy periods, higher management and maintenance costs, higher risk of economic downturns, and regulatory compliance requirements. By carefully weighing the costs and benefits of investing in commercial or industrial real estate, investors can make informed investment decisions that align with their investment goals and risk tolerance.

Closing Thoughts

In conclusion, foreign investors interested in commercial or industrial properties in Singapore have much to consider before making investment decisions. While these properties can offer attractive rental yields and diversification, they also come with certain disadvantages that need to be weighed. To help with this decision-making process, we have provided a table outlining the pros and cons of investing in commercial or industrial properties.

If you are particularly interested in buying shophouses, we invite you to read our step-by-step guide to purchasing this type of commercial property in Singapore. In this article, we provide detailed information on the process of buying a shophouse.

We understand that investing in commercial or industrial properties can be a complex process, and it’s natural to have questions or concerns about your investment options. If you are seeking personalised advice on investing in Singapore’s real estate market, our experienced inside sales team is here to help. We have a wealth of knowledge and expertise in the industry, and we can provide you with insights and advice tailored to your specific needs and investment goals. So if you would like to discuss your options further, please don’t hesitate to reach out to us. We look forward to hearing from you and helping you make the most of your investment.

Disclaimer: The information provided in this article is accurate as of the date of publication and is based on the rules and regulations concerning stamp duty rates and taxes in effect at the time. While we strive to update our past articles diligently, please be aware that tax laws and regulations can change frequently, and it is essential to verify the most current rules and guidelines from the relevant government authorities or consult with a qualified professional for the latest updates and accurate advice.

The post An Investment Guide for Foreigners in Singapore: The Pros & Cons of Commercial and Industrial Properties appeared first on Insights by PropertyLimBrothers.

Singapore has a long history of being a welcoming destination for foreign property investors to park their wealth. In recent years, especially on the back of the COVID-19 pandemic, the city-state has emerged as one of the most desirable places in the world to buy property due to its stable political climate, excellent infrastructure, and strong economic fundamentals. This is in spite of the several rounds of cooling measures where the Additional Buyer’s Stamp Duty (ABSD) rates were increased for foreign buyers.

However, buying property in Singapore as a foreigner is subject to certain restrictions and regulations. In this article, we will be breaking down the type of properties foreigners can buy in Singapore and the steps involved in making the purchase. You may also want to check out our previous article about whether foreigners should rent or buy property in Singapore.

Step 1: Understanding the Restrictions and Eligibility Criteria

Who are considered foreigners?

In Singapore, a foreigner is generally defined as any individual or entity that is not a Singapore Citizen (SC), company, society, limited liability partnership (LLP), or association. Under this definition, Singapore Permanent Residents (SPRs) will also fall under the category of foreigners. 

Although SPRs are still considered foreigners, they are accorded a more relaxed set of restrictions and regulations. 

What type of properties can foreigners buy?

Under the Residential Property Act, foreigners are allowed to own residential properties in Singapore, but with certain restrictions. The biggest difference between a SPR and foreign investor (non-SPR) is that SPRs can buy from both the public and private housing market (subject to eligibility criteria) while the latter can only buy from the private housing market.

The above table summarises what properties SPRs and foreign investors are eligible for in general. However, there are other factors to consider, such as:

• Whether the individual is buying the property alone or jointly with others
• If buying jointly, what are the residency statuses of each buyer?

For foreigners buying a property alone, new HDB flats from BTO and SBF exercises will be out of the question as they are public housing set aside specifically for SCs. The only form of public housing SPRs will be eligible for is resale Executive Condominiums (ECs) that have passed their 5-year Minimum Occupation Period (MOP) while foreigners can only buy privatised ECs.

For foreigners buying a property jointly with others, their residency statuses matter. There are varying levels of restrictions that apply to different groups of individuals based on their residency status.

A couple who are both foreigners (non-SPRs) are only allowed to purchase ECs that are more than 10 years old. There are no additional privileges granted.

However, if there is one SPR and one foreigner purchasing the property together, they are permitted to buy resale ECs that have already fulfilled their 5-year MOP as well as fully privatised ECs (more than 10 years old). 

A couple who are both SPRs may purchase a resale HDB flat under the Family or Fiancé Scheme, as long as they have held their PR status for at least three years. They may also choose to buy resale ECs that have already fulfilled their 5-year MOP, or ECs that are more than 10 years old.

If a couple is made up of at least one SC, more options are available. A SC and SPR couple can ballot for a BTO/SBF flat, or buy an HDB flat or EC from the resale market. A SC and foreigner couple can also ballot for a BTO/SBF flat but will be limited to only 2-room Flexi flats. 

Foreigners looking to purchase private housing in Singapore are subject to less stringent restrictions regardless of their residency statuses. For private residential properties such as condominiums and apartments, there are no restrictions on the location and foreigners are not subjected to MOP before renting out or selling their properties. 

However, foreigners who wish to purchase landed properties must first obtain approval from the Land Dealings Approval Unit (LDAU) of the Singapore Land Authority (SLA). Alternatively, they may take up a leasehold estate in a landed residential property for up to seven years, including any further renewal terms.

Applicants are assessed on a case-by-case basis, taking into consideration factors such as their permanent residency status of at least five years and their exceptional economic contributions to Singapore, such as their employment income assessable for tax in Singapore.

Foreign buyers are also restricted to residential properties that do not exceed 15,000 sqft and are not situated within a good class bungalow area. Those who wish to apply for such properties will be subject to much more stringent qualifying criteria.

In contrast, the criteria for the purchase of properties in Sentosa Cove still require the LDAU approval but are less stringent. Foreign buyers are only required to use the property solely for their own occupation and that of their family members as a dwelling house, and not for rental or any other purpose. The only restriction is that the property must not exceed 1,800 sqm in size.

Aside from residential properties, foreigners can also invest in non-residential properties such as commercial and industrial properties. Look out for our upcoming article which will cover the pros and cons of investing in those types of properties for foreigners.

Step 2: Understanding the Costs Involved

When considering purchasing property in Singapore as a foreigner, it is important to be aware of the various costs involved. While these costs and regulations may seem burdensome, they are designed to protect the integrity of Singapore’s property market and ensure that it remains accessible to locals. By taking the time to understand these expenses and regulations, foreign buyers can make informed decisions and help contribute to a healthy property market.

Buyer’s Stamp Duty (BSD)

In Singapore, all property purchases are subject to a tax known as buyer’s stamp duty (BSD). As the name suggests, this tax is levied only on the buyers of the property.

Once the purchase agreement is signed, buyers have 14 days to pay the BSD. The amount of BSD payable is calculated based on either the purchase price stated in the agreement or the property’s market value as determined by a valuation report, whichever is higher.

This means that even if the purchase price negotiated is lower than the property’s valuation, the BSD rate will still be based on the higher of the two amounts. Therefore, foreign buyers should be prepared to factor in the cost of BSD when budgeting for their property purchase.

Below are the breakdown of the current BSD rates for residential and non-residential properties (regardless of residency status) after the recent housing policy changes announced in Budget 2023.

Do note that the BSD is a progressive tax rather than a flat tax. This means that the rates will apply to the market value bracket of the property acquired and tabulated up to the full purchase or valuation price. Below is an example to illustrate the tabulation of BSD:

Additional Buyer’s Stamp Duty (ABSD)

Foreigners who are considering buying real estate in Singapore should take note of the ABSD rates in addition to the BSD. The ABSD was introduced by the Singaporean government in 2011 as an additional cooling measure to manage the rising demand in Singapore’s property market.

ABSD only applies to residential properties, and the rates vary depending on the residency status of the buyer. The latest ABSD rates were released in December 2021, and as of April 2023, the rates are as follows:

• SPRs are required to pay 5% ABSD on their first property, 30% on their second property, and 35% on their third and subsequent properties.
• Foreigners (Non-SPRs) are required to pay 60% ABSD on all the properties they acquire.

A concise table comparing the ABSD rates for different residency statuses is available below. It is important for foreign buyers to be aware of these rates as they can significantly impact the cost of purchasing a property in Singapore.

Under the Free Trade Agreement (FTA), Nationals or PRs of these countries are exempted from foreigner ABSD rates and will be accorded the same Stamp Duty treatment as SCs:

• Nationals and PRs of Iceland, Liechtenstein, Norway, and Switzerland
• Nationals of the United States of America
  

Or for those that prefer abbreviating these Nationalities, just remember,  SNAIL. 

Loan-to-Value (LTV) & Total Debt Servicing Ratio (TDSR) for property loans

Foreign buyers have the option to approach any bank for a property loan, if necessary. However, the maximum amount that can be borrowed is subject to the number of existing housing loans the individual currently holds. To get a better idea of the amount that you can loan, apply for an In-Principle Approval (IPA) with your bank. The IPA is typically valid for two weeks.

One important policy to take note of is the Loan-to-Value (LTV) limit. It is a regulation that limits the amount of money that banks can lend to buyers when they purchase a property and sets a maximum loan amount that is based on the value of the property being purchased. The policy applies to both local and foreign buyers, but the restrictions are stricter for foreign buyers.

For example, at the time of writing, foreign buyers can borrow up to 75% of the residential property’s value if they are obtaining their first property loan in Singapore. For subsequent loans, the LTV limit is even lower.

Other factors that will influence the loan amount include age, employment status, residency status, and credit score.

The Total Debt Servicing Ratio (TDSR) is another crucial policy to consider when securing a property loan. It refers to the maximum percentage of a borrower’s gross monthly income that can go towards repaying their total monthly debt obligations. This applies to loans offered by financial institutions, for all types of properties and covers properties in and outside Singapore. 

At the time of writing, when a buyer applies for a loan, their TDSR is capped at a maximum of 55% of their monthly income. This implies that the sum of all their monthly debt obligations, including housing loans, credit card debts, student loans, car loans, renovation loans, and other secured or unsecured loans, should not exceed 55% of their total monthly income.

Other fees and costs

Some additional fees to take into consideration are the conveyancing fees and legal expenses involved in the property acquisition process.

Conveyancing fees in Singapore typically range from $250 to $6,000 per legal service, depending on the complexity of the transaction. It is highly recommended to engage the services of a qualified real estate lawyer to handle the legal aspects of the purchase.

Step 3: Engage a Property Agent and Lawyer

After understanding the various restrictions and costs involved, it is time to engage a property agent, though you could also engage a property agent to explain everything to you before embarking on your property journey here.

In Singapore, engaging a property agent when buying or selling a property is common practice. With a highly competitive and fast-moving property market, having a trusted and experienced agent can be especially beneficial. 

All property agents in Singapore are licensed by the Council for Estate Agencies (CEA), which ensures they adhere to professional standards and ethical conduct. Agents can provide valuable guidance on the latest property trends, pricing, and financing options. They can also help navigate complex legal and regulatory requirements. Furthermore, many property agents in Singapore have established relationships with developers and property owners, which can offer access to exclusive listings and information on any developer discounts. 

If you have not already shortlisted some properties that you like, an agent can help you source and shortlist some selections based on your needs and preferences. In the event that you are interested in a new launch property, an agent can also bring you around and serve you at project showflats. When you have made a decision to go through with a purchase, the agent can then assist you with the necessary paperwork and processes.

The commission fees for hiring a property agent are typically around 2% of your property’s valuation, but buyers usually do not have to pay commissions as the sale commission is typically shared between the buying agent and seller’s agent. In the event that you are paying a commission fee, ensure that an invoice from a licensed real estate agency is issued. When paying, do not pass any cash directly to the agent – instead, issue a cheque payable to the realtor’s agency according to the invoice. 

It is also important to hire a qualified local lawyer to assist with the contracts and conveyancing of the property during the transaction. They are also responsible for carrying out due diligence checks on the seller (for resale properties) and liaising with the developer’s solicitor (for new launch properties) to ensure that everything is in order. 

Step 4: Make an Offer (for Resale properties)

Once you have found a property that suits your needs and preferences, it is time to make an offer to the seller. You can convey your offer to your property agent who will then make the official offer to the seller or seller’s agent. In most cases, other than the offer price, details such as the Option and Completion periods are negotiated. Option periods are generally 14 days and Completion periods are between 10 to 12 weeks. Depending on the seller’s requirements, this is also when an extension of stay after the sale completion may be negotiated. 

If the seller finds the offer favourable and decides to close the deal, you may proceed to the next step.

Step 5: The Option to Purchase (OTP) or Sale and Purchase (S&P) Agreement 

After the seller accepts your offer, you will have to procure a contractual document called the Option to Purchase (OTP) if you are buying a resale property or enter into a Sale and Purchase (S&P) Agreement with the developer if you are buying a new launch property. 

At this stage, you should have already obtained your bank’s IPA if you are taking a property loan. An IPA is essentially the bank’s pledge that they will extend the loan to you for your property purchase, provided that there are no changes to employment status, income, etc. It is important to have an IPA before procuring the OTP. Without an IPA, you risk not being able to secure the full amount you need from the bank, leading to a failure to meet payment schedules for your property and potentially losing your option fee.

In Singapore’s real estate market, it’s common for buyers to provide an option fee to “reserve” the property for an agreed period of time while they consider their potential purchase. The option fee is an essential component of many real estate transactions in Singapore as it helps to ensure that both parties are committed to the sale and have a stake in the transaction’s outcome. This fee is typically held in an escrow account and can range from a few thousand dollars to a percentage of the purchase price, depending on the type of property and the agreement between you and the seller. For private properties, the option fee is typically 1% of the purchase price.

By providing the option fee, the buyer shows their serious interest in purchasing the property and secures it for a specified period, during which they can conduct due diligence and evaluate their ability and willingness to proceed with the purchase.

If you decide not to proceed with the purchase within the agreed time frame, for reasons such as being unable to secure financing or changing your mind, you risk forfeiting the option fee. However, if the sale goes through, the option fee is typically applied towards the purchase price.

In the event that you require more time to decide whether to exercise the option or not, you may request an extension from the seller through your agent. However, it is important to note that the seller is not obligated to grant an extension and may choose to decline the request.

It is crucial to exercise the option within the specified time frame. Failure to do so will result in the forfeiture of the option fee and the opportunity to purchase the property. Therefore, it is recommended to carefully consider all relevant factors before entering into the option agreement and seek legal advice if necessary.

To proceed with the transaction, exercise the option by signing the OTP. If you are overseas at this point, you could sign the OTP before a Notary Public or officer at the Singapore Consulate, and send the duly signed and witnessed OTP back to your lawyer in Singapore by courier. 

Step 6: Exercise Option and Complete the Sale

Once you have decided to proceed with the transaction, exercise the option by signing the agreement at your lawyer’s office. Following this, you will need to submit the agreement along with a payment of 4% of the purchase price, or the amount agreed upon between you and the seller, to the seller’s lawyer. 

Once the agreement between you and the seller is reached, it is time to hand over the reins to your lawyer for the completion of the sale. The process typically takes around 10 to 12 weeks, during which your lawyer will take care of all the necessary paperwork for the conveyancing of the property.

Your lawyer will also be responsible for lodging a caveat on the property, coordinating with the financial institution and CPF board (if applicable), and preparing the mortgagor/mortgagee documents. They will also ensure that you pay the stamp duty fees to the Inland Revenue Authority of Singapore (IRAS) within 14 days of exercising the OTP or signing the Sales and Purchase Agreement if you’re buying from a property developer.

After all the necessary paperworks and payments are settled, you can look forward to taking possession of the property and moving into your new abode!

Closing Thoughts

Buying a property in Singapore as a foreigner requires careful planning and preparation. There are several legal and financial requirements that you need to comply with, and navigating the complex Singapore property market can be a challenge. However, by following the step-by-step guide outlined in this article, you can make informed decisions and ensure a smooth transaction process.

One of the most important steps in buying a property in Singapore as a foreigner is conducting thorough research. This includes understanding the different types of properties available, such as condominiums, landed properties, and HDB flats, and their associated costs and restrictions. It also involves familiarising yourself with the various neighbourhoods and their amenities, as well as staying up-to-date on the latest property trends and market conditions.

Another crucial aspect of buying a property in Singapore as a foreigner is seeking professional advice. This includes engaging a trustworthy property agent, as well as consulting with a lawyer, tax advisor, and mortgage broker to ensure that you are fully aware of all legal and financial requirements.

When it comes to financing your property purchase, it is important to keep in mind that as a foreigner, you may be subject to stricter lending requirements and higher interest and ABSD rates. However, there are several financing options available, including bank loans and private financing, and it’s important to carefully consider your options and choose the one that best fits your needs and budget.

We hope that this article has given you a clearer understanding of the entire process of purchasing a property in Singapore as a foreign buyer. If you are looking to enter the Singapore real estate market, or have further questions about the process, do get in touch with our PropertyLimBrothers team. Our experienced and dedicated team can guide you through the whole process, provide you with the latest market analyses and trends, and advise you on whether your move will be prudent and where the opportunities lie. 

PropertyLimBrothers, always happy to show you the place.   

Disclaimer: The information provided in this article is accurate as of the date of publication and is based on the rules and regulations concerning stamp duty rates and taxes in effect at the time. While we strive to update our past articles diligently, please be aware that tax laws and regulations can change frequently, and it is essential to verify the most current rules and guidelines from the relevant government authorities or consult with a qualified professional for the latest updates and accurate advice.

The post Navigating the Singapore Property Market as a Foreign Buyer: A Step-by-Step Guide appeared first on Insights by PropertyLimBrothers.

The Singapore government’s Budget 2023 has brought good news for first-time home buyers who are looking to purchase a resale HDB flat. As part of the government’s efforts to support home ownership, an additional grant of $30,000 has been introduced for first-time buyers. This grant is expected to provide a significant boost to many Singaporeans who are struggling to afford their first home. 

In this article, we will analyse how this additional grant can impact the first home buying journey of the average couple in Singapore. We will examine the affordability of resale HDB flats and explore the potential benefits of this grant for first-time buyers. Join us as we take a closer look at this crucial aspect of the Budget 2023 and its impact on the real estate market in Singapore.

If you have not read our article on the Budget 2023 changes, you can catch it here.

Why Increase the CPF Housing Grant?

The cost of purchasing a home in Singapore has always been a major concern for many Singaporeans, especially for first-time buyers who are looking to get a foot on the property ladder. The government has recognised this and has taken steps to address the issue by introducing various measures to support home ownership. 

One such measure is the introduction of an additional grant of $30,000 under the CPF housing grant for first-time buyers in the Budget 2023, bringing the total CPF housing grant to $80,000 for 2-4 room flats. This grant is expected to help many Singaporeans who are struggling to afford their first home, particularly resale HDB flats.

Resale HDB flats are a popular option for first-time buyers as they offer more flexibility in terms of location and floor area. The ability to move-in relatively fast upon purchase is also a crucial factor as couples need not wait for years as they do for a BTO flat. However, the rising cost of HDB flats has made it increasingly difficult for many Singaporeans to afford them. The average psf for 2-4 room resale HDB flats has increased by 7.6% from Q4 2021 to Q4 2022.

The additional grant of $30,000 for first-time buyers is expected to make a significant impact on the affordability of resale HDB flats. The grant will be disbursed on top of the existing grants for first-time buyers for resale HDB, which include the Enhanced CPF Housing Grant (EHG) and the Proximity Housing Grant (PHG). Together with the existing grants, first-time buyers can receive up to 190k in grants to help with the purchase of their first home.

With the additional grant, the average couple in Singapore may be able to afford a resale HDB flat that is priced slightly higher than what they would have been able to afford without it. And even for the same quantum resale HDB flat, the average couple would also have a much better financial position and cash flow thanks to the grant.

In addition to making it easier for first-time buyers to purchase their first home, the additional grant is also expected to have a positive impact on the real estate market in Singapore. The increased demand for resale HDB flats may have the potential to push up prices, which may benefit current HDB flat owners who are looking to sell. We will elaborate more on this point later in the article.

The additional grant of $30,000 for first-time buyers in the Budget 2023 is a much-needed boost for many Singaporeans who are struggling to afford their first home. With the grant, more first-time buyers may be able to enter the property market, which can have a positive impact on the economy and the real estate market in Singapore.

The Positive Impact on the Average Couple’s HDB Journey

The additional grant of $30,000 for first-time buyers in the Budget 2023 can positively impact the first-time home buyers’ journey in several ways. For many first-time buyers, purchasing a home is a significant financial commitment, and the grant can help ease some of the financial burdens. In this section, we will illustrate the benefits of the additional grant for a fresh university graduate couple. 

Our assumption is that the household income is $8,400, which is the dual-income family’s median wage according to the data from Straits Times. We assume that the couple buys a decent 4 room resale HDB at the price tag of $650,000, with no COV. We also assume that they are eligible for $20,000 in grants for living within 4km of their parents under the Proximity housing grant. The couple is taking the HDB loan which has a down payment of 20%, and an interest rate of 2.6% with a loan tenure of 30 years.

Firstly, the grant can help buyers increase their down payment, which in turn can lead to a lower monthly mortgage payment. A higher down payment reduces the amount of money that a buyer has to borrow, which can result in a lower monthly mortgage payment. This can help first-time buyers better manage their monthly expenses and free up some money for other essential expenses. This is illustrated in the table below. While this might seem like a small number for a university graduate couple, for families with lower incomes, it could be a huge difference in living expenses and lifestyle.

Secondly, the grant can help buyers afford a home that they may not have been able to afford otherwise. With the additional 30k grant, the affordability of resale HDB flats increases, and first-time buyers with lower incomes may now be able to purchase a home that would have been previously out of their reach. 

This can significantly impact their quality of life, as owning a home can provide a sense of stability and security. With the same amount of savings of $50,000 in CPF OA and Cash, the couple can now afford a property which has a quantum of $800,000. This is $150,000 higher than before. This could mean a huge lifestyle difference by choosing a more premium location or a newer resale option with a longer balance lease. The assumption here is that the couple is applicable for the higher loan quantum.

Thirdly, the grant can help first-time buyers save time in their home buying journey. For many lower-income individuals, saving enough money for a down payment can take several years, and in some cases, it may take up to a decade or more. With the additional grant, the amount of time required to save for a down payment is significantly reduced, and buyers can enter the property market much sooner. Looking at the table below, it takes the couple an additional year to save up the difference of $30,000. We all know how long one year can be for a young couple looking to settle down, and this might make a huge difference to some Singaporeans. 

Note that for lower income families, the amount of time it takes to save up the difference can take much longer. The $30,000 difference can be a game changer for these families, especially when it reduces the amount of time it takes to save up the difference.

Lastly, the grant can help first-time buyers avoid tapping into their savings for a down payment. Many buyers use their savings to pay for a down payment, which can significantly impact their personal finances. With the additional grant, buyers may be able to avoid dipping into their savings, which can help them maintain their financial security and stability. This additional $30,000 can be an important rainy-day saving for a potential recession, or even enough for a start-up fund for a business idea. This is equivalent to 12 months of savings, which is enough to tide the couple through unemployment for both of them for 6 months.

The additional grant of $30,000 for first-time buyers in the Budget 2023 can positively impact the first-time home buyers’ journey. It can help increase the down payment, reduce monthly mortgage payments, increase affordability, save time, and avoid tapping into personal savings. Overall, the grant is a significant step towards making homeownership more accessible and affordable for many Singaporeans.

Are the Grants adding Fuel to the Inflation Fire?

While the additional grant of $30,000 for first-time buyers in the Budget 2023 can have a positive impact on the personal finances of first-time buyers, there are also some concerns Singaporeans have with this new policy.

One of the main concerns with this policy is that it could contribute to inflation in the housing market. When the government provides additional funds for first-time buyers to purchase homes, it can increase the demand for housing, which can lead to higher prices. This can make housing less affordable in the long run, particularly for those who are not eligible for the grant or cannot afford to buy a home without it. 

Another concern with this policy is that it may not address the root causes of housing affordability in Singapore. While the grant can help first-time buyers afford a home, it does not address the underlying issues of limited land supply and high construction costs that contribute to high housing prices in Singapore. As a result, the grant may only provide temporary relief for first-time buyers, and the long-term affordability of housing in Singapore may remain an issue.

Additionally, the grant may have unintended consequences for the broader housing market. For example, if the demand for resale HDB flats increases due to the grant, it may lead to a decrease in the supply of flats available for sale, which can drive up prices for other buyers who are late to the party. This can make it more difficult for buyers who are not eligible for the grant to afford a home down the road.

In other words, while the additional grant of $30,000 for first-time buyers in the Budget 2023 can provide significant benefits for first-time buyers, it is not without its potential drawbacks. The policy could contribute to inflation in the housing market, fail to address some of the underlying issues of housing affordability, and have unintended consequences for the broader housing market. 

Ultimately, this is to help aid first time home buyers bridge the affordability gap. To prevent home sellers from further driving prices up and potentially causing another drastic price increase, HDB regulations on valuing the property may see more stringent measures. Which in turn, will curb any potential sudden price increase due to the additional grants. This is similar to that of the GST rise where there was a disclaimer to take action against unjustified increases in prices. However, this still may not stop home sellers from asking for higher prices in anticipation of higher affordability and may potentially create another COV situation where prices do not match valuations.

Housing Policy: A Difficult Balancing Act

When weighing the pros and cons of the additional grant of $30,000 for first-time buyers in the Budget 2023, it is important to consider the potential economic impacts of the policy in greater detail.

One of the key advantages of the grant is that it can help lower-income families enter the housing market. For many families, the upfront costs of purchasing a home, such as the down payment and other closing costs, can be a significant barrier to homeownership. By providing an additional $30,000 grant, the government can help offset some of these costs and make homeownership more accessible to families who may not have been able to afford it otherwise.

This can have significant long-term benefits for low-income families. Homeownership is often seen as a way to build wealth, as property values tend to appreciate over time. By enabling more people to enter the housing market, the grant can help reduce wealth inequality and provide a pathway to financial security for low-income families. Additionally, the grant can help stimulate demand in the housing market, which can have positive knock-on effects for the broader economy. When more people buy homes, it can lead to increased spending on furniture, home improvements, and other related goods and services. This can create jobs and support economic growth.

Overall, we believe that the benefits outweigh the potential drawbacks, but it is important to monitor the impact of the grant on the housing market and ensure that housing remains affordable for all Singaporeans.

Final Thoughts

As we move forward, it will be important to monitor the impact of this policy on the housing market and make adjustments as necessary to ensure that housing remains affordable for all Singaporeans. To help keep you informed about these and other important issues in Singapore’s economy, we invite you to attend our upcoming webinars and read our 2022Q4 report and other editorial pieces.

Our webinars will feature expert speakers and provide valuable insights on the latest real estate trends, policies, and investment strategies. Our 2022Q4 report will provide a detailed analysis of the economic landscape in Singapore and offer a broader perspective on where the real estate industry might be headed in the near future. Finally, our editorial pieces will cover a range of topics on real estate, investment, finance, and lifestyle.

We are committed to providing you with the most accurate and insightful analysis of Singapore’s economy, and we look forward to sharing our knowledge and expertise with you in the months ahead. So please join us for our webinars, read our reports and editorial pieces, and stay informed about the latest developments in Singapore’s economy. You can also reach out to our Inside Sales Team here if you have any questions or are in need of specific solutions to your own housing journey.

The post Budget 2023: How an Additional 30k Grant Can Impact the First Home Buying Journey of an Average Couple appeared first on Insights by PropertyLimBrothers.

As a single person in Singapore, finding a flat to call your own can be a daunting task. It’s understandable to feel overwhelmed by the process, especially given the rising interest rates, high housing prices, and competitive market. However, it’s important to know that you’re not alone in this journey, even as you take on the financial liabilities alone. The Housing & Development Board (HDB) has designed housing measures, such as the Singles Scheme, specifically to address the needs of individuals like you who are looking for a flat.

With this in mind, it’s important to approach the process with a positive and proactive attitude, knowing that there are options and resources available to help you achieve your goal of homeownership. 

This article is here to provide you with the information and guidance you need to navigate the housing market as a single person and find a flat that fits your needs and budget. Stay with us as we go through the various options available.

Option 1: Buying a new HDB flat under the Single Singapore Citizen Scheme

At present, the minimum age to buy a flat as a single in Singapore is 35 years old, unless you are orphaned or widowed. The below table shows the eligibility criteria for singles to qualify for the Single Singapore Citizen Scheme. 

As you can see, the only option available to you under the Single Singapore Citizen Scheme for the purchase of new flats are 2-room Flexi flats. Furthermore, you can only apply to estates that HDB classifies as non-matured and must not exceed the income ceiling of $7,000, among other requirements.

While this may seem straightforward, it will be a lengthy process since you’d have to first ballot for a queue number in the BTO sales exercise and wait for the flat to be built. To avoid the waiting time, you may want to apply for the Sale of Balance Flats (SBF) exercise instead, which allows you to ballot for a unit with a shorter waiting time or even immediate key collection.

When you apply as a single, you are eligible for the EHG (Singles) of up to $40,000 for your flat purchase if you meet the grant requirements. This includes working for 12 consecutive months prior to your application and being currently employed at the time of application. Below is the breakdown based on your monthly income:

As a single owner of the 2-room Flexi flat, you will also not be allowed to rent out the flat at all.

Lastly, it is possible for you to get a flat as a single first, and upgrade to a larger flat with your partner if you get married in the future. 

For this case, you would be applying for your next flat as a First-Timer/Second-Timer couple or as a Second-Timer couple (if your partner has also gotten housing subsidies before). However, do remember that when you sell your flat, you will have to refund the grant amount received and any CPF savings used plus accrued interest back to your CPF OA account. Do also take note that resale levy may apply to those receiving housing subsidies from HDB for the second time.

Option 2: Buying a new HDB flat under the Joint Singles Scheme

Under the Joint Singles Scheme, you are able to jointly purchase an HDB flat together with up to three other singles. The eligibility conditions are mostly the same as the Single Singapore Citizen Scheme.

The difference between the Single Singapore Citizen Scheme and the Joint Singles Scheme, other than the number of applicants, is the income ceiling as well as the eligibility to apply for an executive condominium (EC) unit. 

The income ceiling under the Joint Singles Scheme is $9,000 instead of $7,000 since there are more applicants under this scheme. It is also the only way, at the time of writing, for singles to jointly purchase a new EC unit and without any size restriction. This is the biggest advantage of the Joint Singles Scheme. We will touch on this option later on in this article.

Like the previous scheme, you will also be eligible for EHG (Singles) for your flat purchase if you meet the grant requirements. But since you are applying with two or more singles, the grant amount is up to $80,000 depending on your average combined monthly income. Below is the breakdown:

Regardless of the number of co-applicants, the EHG will be disbursed to only two applicants’ CPF OA with a 50-50 split under the Joint Singles Scheme. For example, if you apply with two of your siblings who are also SCs above 35 years old and are eligible to receive $40,000 of grants, $20,000 will be disbursed to either you and one of your siblings’ or both your siblings’ CPF OA account. 

Lastly, you will also not be allowed to rent out any part of the 2-room Flexi flat.

Option 3: Buying a resale HDB flat

The next option is buying a resale HDB flat from the open market under either the Single Singapore Citizen Scheme or the Joint Singles Scheme. The biggest difference between buying from the open market and buying a new flat from HDB is that there is no restriction on the flat type and location for the former. This means that you can buy a resale HDB flat of any size in any location, as long as you meet the other requirements under the scheme. 

You will also be able to rent out your whole flat after serving a 5-year Minimum Occupation Period (MOP), and only the bedroom(s) within the MOP if you are purchasing a 3-room or larger flat. If you are purchasing a 2-room Flexi flat, you will not be able to rent it out before MOP.

However, the trade-off is that resale flats are more expensive since you are buying from the open market and they will come with various degrees of lease decay. With effect from 10 May 2019, the property that you purchase must have at least 20 years of lease remaining, otherwise you would not be able to use your CPF at all to fund the purchase. The remaining lease must also be able to last until the applicant (or youngest applicant under the Joint Singles Scheme) is 95 years old. If this requirement is not met, the Loan-to-Value (LTV) limit for your HDB loan and use of CPF will be pro-rated.

Furthermore, resale flats are subjected to a Cash-over-Valuation (COV) if the purchase price is higher than the valuation price. This COV can only be paid in cash.

You will also be eligible to apply for CPF housing grants when you buy a resale HDB flat. 

Under the Single Singapore Citizen Scheme:

• Enhanced CPF Housing Grant (EHG) (Singles): The framework for the EHG (Singles) for HDB resale flats is the same as for new HDB flats. The income ceiling for this grant is $4,500, and the maximum amount disbursed based on your income is $40,000.
• Singles Grant: This grant is only applicable for first-timer singles purchasing HDB resale flats. If you are purchasing a 2- to 4-room resale flat, you will receive $25,000. If you are purchasing a 5-room resale flat, you will receive $20,000. To qualify for this grant, your monthly income must not exceed $7,000. 
• Proximity Housing Grant (PHG): If you are living with your parents or children (must be listed as occupants), you will get $15,000 regardless of flat type. If you are staying alone but within a 4km radius of your parents’ or children’s home (can be either HDB or private property), you will receive $10,000. Unlike the other two grants, there is no income ceiling for the PHG.

Under the Joint Singles Scheme:

• Enhanced CPF Housing Grant (EHG) (Singles): Similarly, the framework for the EHG (Singles) for HDB resale flats is the same as for new HDB flats. The income ceiling for this grant is $9,000, with the maximum amount being $80,000 based on the combined monthly income. This will be disbursed to two applicants (regardless of whether there are more applicants) with a 50-50 split. 
• Singles Grant: Like the EHG, the Singles Grant for the Joint Singles Scheme is also doubled in amount. If purchasing a 2- to 4-room resale HDB flat, you and your co-applicants will receive $50,000. If purchasing a 5-room resale HDB flat, you and your co-applicants will receive $40,000. To qualify for this grant, your combined monthly income must not exceed $14,000.
• Proximity Housing Grant (PHG): Individuals who apply under the Joint Singles Scheme may be eligible. The grant is $15,000 if they plan to reside with their parents or kids, or $10,000 if they will live within 4km of their family home.

A quick note for what happens if you get married after getting the Singles Grant to buy a resale HDB flat – you and your partner may be eligible for the Top-Up Grant when you upgrade to another resale HDB flat. This grant is essentially the amount of Family Grant you are eligible for, minus the Singles Grant amount you received previously. The income ceiling for this grant is $14,000.

Option 4: Buying a new EC unit from developer under the Joint Singles Scheme

As mentioned previously, this is currently the only way for singles to purchase an EC unit. Below are the eligibility criteria to meet in order to qualify:

Unfortunately, you will not be eligible for any CPF housing grants when purchasing an EC unit under the Joint Singles Scheme. The only CPF housing grants available are the Family Grant or Half-Housing Grant, both of which are for couples or family units. 

The 5-year MOP is also applicable to EC units, which means that you will not be allowed to rent out the entire unit during the period. However, you are able to rent out bedrooms following the usual rental procedures.

Option 5: Buying a private condo unit

The last option would be the private property market, which is the most costly option compared to the rest. However, this is also the only option where you can buy a property before 35 years old.

Some things to note if you are considering this option:

1. You can only take a bank loan

This means that you can only borrow a maximum of 75% of the purchase price. This might not seem that bad considering that the LTV limit for HDB loans has been reduced to 80% following the latest cooling measures. 

But do take note that for bank loans, there is a mandatory cash component of 5%, which means that 5% out of the 25% downpayment has to be paid in cash. The remaining 20% can be paid with either cash, CPF OA, or a combination of both. 

2. Eligibility for bank loan and Total Debt Servicing Ratio (TDSR)

To qualify for a bank loan, you will be required to submit documentation that you are currently employed and drawing an income. Depending on the type of income (fixed or variable), the loan amount that you will be eligible for will be different.

Under the TDSR framework, your monthly home loan instalment must not exceed 55% of your monthly income less any debt obligations (personal, car, renovation loans, etc). If you are earning a variable income (bonus, commission, allowance, rental income), your income will be subjected to a 30% haircut. The 55% TDSR will then apply to the remaining 70%, less any debt obligations.

Based on the maximum instalment you are able to pay per month, the bank will then calculate how much you can borrow.

3. In-Principle Approval (IPA)

You may want to engage your property agent or a mortgage specialist to help you get an IPA, which allows you to confirm the home loan amount you are eligible for. You would be required to submit personal documents including proof of income.

4. Cash Reserves

Besides the cash component of the bank loan, you will have to set aside cash for the stamp duties and additional fees. This includes any COV, buyer stamp duty, legal conveyancing fees, etc.

As you can see, it is not easy to buy a private property as a single. In fact, it is an extremely costly option. While you can rope in other people to jointly purchase the property, keep in mind that doing so would mean they have a share as well since it will most likely be a joint-tenancy.

In Summary

To sum up the article, here are the pros and cons that come with each option.

It takes a great deal of courage and determination for a single person to pursue homeownership. The road to securing a place to call home may not always be easy, but it is important to remember that the reward at the end is worth the effort. You should be proud of yourself for taking this important step towards a brighter future, and know that you are not alone in this journey. 

If you need any help or advice regarding your property options, do contact our PropertyLimBrothers team and we will be glad to help you with your portfolio planning.

The post How to Get a Flat as a Single Singaporean – Your Complete Guide to Property Options appeared first on Insights by PropertyLimBrothers.

Have you ever gone for a property viewing as a new buyer and was just led around the house, not knowing what to do or look out for? You might just be nodding your head to whatever you’re being told about the property from the realtor, with moments of awkward silence as you look around the place.

What should we look out for when we go for a property viewing? How should we best prepare ourselves to make the most of the viewing session? After all, you are probably using your precious weekends and time off from work to look through what might be your future home, so you can’t exactly take the process lightly.

In this article, we will cover a sensory approach to property viewing. Of course there are many ways to go about viewing a property. Each person has their own priorities and things to look out for. There are also many different approaches that can work in property viewings, each with its own benefits and tradeoffs.

What is a Sensory Approach?

A sensory approach to property viewing means using our 5 human senses in the viewing process. Our senses of sight, hearing, taste, smell, and touch naturally come into play whenever we want to better observe our surroundings.

Taking a sensory approach means that we have to be more conscious of the way that we observe. What are we searching for? What senses are we using? This focus helps us to spot things which we may not have observed in the past.

Millions of years of evolution have distilled into these senses we take for granted on the day-to-day. We unconsciously use them in our daily activities, and would probably not pay close attention to our senses until we lose them. 

We complain when we can’t taste when we’re ill but we don’t often rejoice at the fact that we have the ability to taste many wonderful different flavours. When it comes to the different senses, our sense of sight dominates and takes up most of our cognitive resources. 

Paying attention to what our other senses pick up might surprise you at how many things we miss out from our environment. The sensory approach to property viewing hopes to help you patch your blindspots. Sight, Hearing, Taste, Smell, and Touch. Use all your senses to find out if this is the right home for you.

Sight — Visual Expectation and Inspection

As they say, seeing is believing. When it comes to property viewings, homebuyers typically have an image in mind. Most of the time, this visual expectation is created by the photos uploaded by the selling-side’s realtor on platforms such as PropertyGuru, 99.co, and more.

Occasionally, some of these photos are taken off other listings or use stock photos from the developer’s marketing package. The impression can go both ways. Visual expectations of how the property looks may be low if the property was not staged, or if the images are blurry.

On the contrary, the visual expectations of the property may be very high if marketing and staged photos were used. With these images primed and ready to go in the buyer’s mind, the property viewing session is a reality check against these expectations formed in the buyer’s mind. 

Apart from the reality check, sellers have to know that their property’s aesthetic look will affect how buyers value the property as well. Some serious buyers may be willing to pay more for a property which looks simple and neat, closer to a showroom look. 

Moreover, when buyers go for a property viewing, they need to be able to visualise their future home in the given space. By giving viewers the physical and personal space in what might be their new home, they can better understand whether the property is a good fit for them.

When it comes to the sense of sight, we can go on and on about how viewers might look for defects or whether the surrounding area of the property is what they previously expected. Regardless, the key to using our sense of sight is to visualise and inspect. Reality check our expectations, and visually imagine what the future home might look like if they had bought that property.

Hearing — Sounds, Noise, and Serenity

Other than the sense of sight, all the other senses may suddenly sound more and more foreign when we bring them into the context of a property viewing. Nonetheless, our sense of hearing is important to help us identify the noise pollution levels in the area. 

This is something that photos and videos on the property listing might not be able to convey fully. Keep your ears sharp and know what sounds you’re looking out for when you go for the property viewing. This will help you identify potential problems before making the decision to purchase the home.

The fact that you might be staying in the property for the next few years should be enough gravity for you to understand that the viewing cannot be understated. It will be well worth the time and effort to make sure you cover all the blindspots before borrowing millions and emptying your bank accounts for the property, the renovation and furnishings.

Home buyers should be aware of the noise level of the area from construction, road traffic, MRT stations, children in the pool or playground area, and finally the neighbours noise level from pets, children, music. To observe these noise levels, multiple viewing might be necessary to cover all the blind spots. 

Of course, not everyone might be bothered by the noise levels. But if you have lived in a relatively quiet neighbourhood prior to moving to a noisier one, you might find it difficult to adjust. This might affect your stress levels, quality of sleep, and your general enjoyment of the space you have purchased with your hard-earned money.

Taste — Food Options Nearby

When it comes to our sense of taste, we do not mean for you to take a literal bite out of their refrigerator. Using our sense of taste to guide us will come in handy before and after the viewing process. In the day-to-day, you might cook or order in.

When it comes to that, you will need to know what options are available to you before making the huge commitment to the home. It might be a good idea to have a meal in the area before or after the viewing to have a feel of what it might be like if you are a resident of that neighbourhood.

Alternatively, you can go on GrabFood, FoodPanda, Deliveroo, or other food delivery apps to see if you have your favourite bites available in that location. This might be outside of the viewing experience itself, but it is a good idea to spend some time in the area since you are already there to view the property.

Food is a super important part of our lives. In Singapore, where food is a huge part of our culture and way of life, you should pay close attention to what food options are available to you should you choose to stay in that particular part of the island. 

The convenience and an abundance of food options will increase your quality of life, giving you fewer annoyances and things to complain about. A hungry person is an angry person. So, keep yourself well-fed and go to the viewing sharp and in a good mood.

Smell — Quality of Air in the Neighbourhood

To home buyers who are new to this process and are looking for a new home for the first time, this might sound iffy to you (or that we are squeezing content out of a rock). But we aren’t kidding. The air quality in the neighbourhood is important. More so than you think. 

The key part of being an experienced property viewer is to make sure that you don’t let your biases affect your viewing and inspecting process. This is hard to do. But for the short 1 hour or so, you will have to be focused on your goals for the viewing.

When it comes to air quality of the unit and its surroundings, you are looking for a few things. Specifically, we are looking for air “pollution” from our surroundings. For instance, Pasir Gudang has pollution travelling to Punggol, or confectionaries in the north and north east region having a sweet smell in the mornings.

Similarly, we are looking if there are any religious institutions in the vicinity of the property. This area could have the smell of incense during festive or religious periods. Home buyers need to be aware of these aspects of their surroundings. On some occasions, you might or might not like the smell of the neighbours’ cooking. 

Having hawker centres or kopitiams near your future residence might be great for your taste buds, but you will have to be alright with the potentially intense smell of cooking all day round. However, depending on the location this might not be as severe an issue. If the property you are viewing is near industrial areas, you might want to be extra aware of potential issues as well.

Green and blue spaces in the surroundings of your future home will impact the air quality. Having more nature around you acts as a natural air filter. More space for nature means less space for commercial and other polluting activities. Perhaps this is also why some homeowners are willing to pay a premium for homes near large parks and nature reserves.

Touch — Temperature & Textures

Touch is another important human sense. Interestingly, our sense of touch can also contribute to the viewing process. The temperature of the area when viewing the property, and the textures of the material used in the development (especially if you are going to move in without renovating).

People living in Singapore often complain about the heat. Even born and raised Singaporeans do this more often than we realise. If the temperature is so important for our comfort (unless you A/C 24/7), you should probably check out if the property is located in a very dense urban area.

Large, built-up spaces with a lot of concrete trap the heat from the sun. Dense urban areas will have a higher chance of being more uncomfortable with this issue. As global warming cranks up, this might be an increasingly important issue in the long run and definitely deserves some attention in the viewing process.

Finally, textures. This tip is perhaps more for homebuyers looking to move in immediately. Are the renovated surfaces in the home to your liking? Do the washrooms have non-slip tiles that might save you a world of pain? Taking the mental note of this would help you better value that home. How much will you be willing to pay for that piece of real estate if you have to spend more money to renovate it to your liking?

Clearly, we would be willing to pay more for a home that doesn’t require additional work. But how will you know this unless you pay close attention to the details of the home and which areas are to your taste and preferences?

Closing Thoughts

Taking into consideration all these 5 senses when going for property viewings, we hope that this article can help you be better prepared when you visit what might be your future home. No more awkward conversations. No more being led around like a sheep.

Now you’re ready and you know what to look out for. We hope that this has been helpful and that you go into that property viewing with both eyes open and all 4 other senses ready to rumble. Make the most of the physical property viewings and take your time to enjoy the experience. 

If you wish to know more about the ins and outs of property viewings and how to find the right fit for your needs and goals, feel free to contact our experts here. We are always happy to help.

The post A Sensory Approach to Property Viewing appeared first on Insights by PropertyLimBrothers.

In the past, residents of Punggol have had to make do with limited amenities, even though the opening of Waterway Point in 2016 provided some relief. Since then, Punggol has developed into a bustling region with plenty of amenities and the title of Singapore’s first successful eco-town.

We recently covered the top 5 growth condos in District 19, which has the highest volume of transactions. As one of Singapore’s largest residential districts, D19 spans Hougang, Punggol, Sengkang, and parts of Serangoon along the North East MRT Line (NEL). In our previous article, we discovered that most of the top 5 growth condos were clustered around Hougang, which is no surprise since it is the oldest area in the district.

On the other hand, as the youngest area of the district, Punggol has also been performing relatively well over the years while undergoing developments. With the recent launch of One Punggol CC, a 45,100 sqm integrated community hub, as well as the upcoming Cross Island Line that will connect Punggol directly to the Eastern, Western, and Central regions, the properties in this area have much growth potential. 

In this article, we will review eleven 3-Bedroom Condos under $1.5M in Punggol. If you are looking into this area for your next home purchase, this article might help you narrow down some of your choices. Let’s get right into it.

1. Parc Centros

Parc Centros is one of the most accessible projects in Punggol, being a short 4 mins walk away from Punggol MRT station. This means convenient access to Punggol Bus Interchange, Waterway Point, and the Punggol LRT network, which connects you to other malls like Oasis Terraces and the new Northshore Plaza. Families who prefer to be within walking distance of amenities would appreciate this strategically located development.

Obtaining its TOP in 2016, it has a healthy balance lease of over 90 years – the advantage of getting a resale condo in a relatively young estate. The 3-Bedders (Type C1) in this project are currently averaging around $1.44M, with the transactions climbing from $1.2M since 2021. With the upcoming Cross Island Line, we think this project has a lot of room for potential growth.

2. River Isles

Sitting on a massive land size of 20,256 Sqm, River Isles has all the facilities you can think of – a clubhouse with a blue lagoon, hydro gym, BBQ/Teppanyaki/Gourmet/Pizza pavilions, tennis and fitness courts, and more. With four water-themed areas (Caribbean Island, Explorer Island, Paradise Island, and Wellness Island), residents can indulge in a wide array of facilities for relaxing activities.

The 3-Bedders currently listed, 3-Bedroom Compact (Type C2) and 3-Bedroom (Type CS3, CS3A & CS5), are averaging around $1.34M. The unit sizes range from 894 sqft to 1,184 sqft. We think that this is a good entry price quantum, especially for HDB upgraders in the area.

In terms of the floor plans, type C2 and CS5 units have more squarish layouts, while type CS3 and CS3A have unique angular corridors leading from the living and dining area to the bedrooms that some might not appreciate. However, all of them have efficient dumbbell layouts where bedrooms are tucked on opposite sides of the house. Depending on preference, the angular layout may suit buyers who would like to work with a more unique space and the regular layouts would cater to those looking for a more efficient floor plan. Units with the type CS3 layout also have an extra balcony space in the master bedroom, a bonus for those who appreciate the extension of personal space.

One other potential obstacle we foresee is the proximity of the fire station. On top of being surrounded by two schools on the western and southern sides, Punggol Fire Station is located on the northeastern side of the project. Families with young children who prefer quieter facings and want to avoid the road facing units, may opt for the inner stacks (Block 62, 64, 66).

3. FLO Residence

Completed in 2016, FLO Residences is strategically located at the southeastern edge of Punggol. Punggol Plaza and Punggol 21 Community Centre is conveniently located to the north of the project for families that prefer to be within walking distance of amenities. It is also one bus stop from the Punggol Container Restaurants, an excellent place for couples and families to enjoy the ambience and other recreational activities.

In terms of accessibility, FLO Residence is a short 5 mins walk from Coral Edge LRT Station, which connects it to Punggol MRT station. With a bus stop serving the project located on the southeast side, you can reach Riviera LRT Station in one stop. Riviera is also one of the upcoming Cross Island Line stations, which will provide direct access to the central, eastern, and western regions of Singapore.

Specific stacks facing the east and southeast may get unblocked views of Sungei Serangoon river and the greenery beyond, thanks to the empty plot of land to the project’s south. The URA Master Plan does not show any confirmed plans for this plot, but future developments might change that.

The 3-Bedroom units currently listed are about $1.31M, and the average PSF prices have been trending upward since 2020. Furthermore, rental demand is high due to the nearby Global Indian International School.

Another thing that caught our eye is that ground floor 3-Bedder units are currently listed at around $1.38M. At 1,152 sqft, the floor plan includes a Private Enclosed Space (PES) that homeowners can creatively convert into extra usable space. The price quantum for this 3-Bedder with PES is close to smaller 3-Bedders from the same project, so we feel those who have no preference against staying on the ground floor, might want to consider capitalizing on this relatively low entry price.

4. Ecopolitan

Located to the southwest side of Punggol MRT, Ecopolitan occupies a sizable 18,689 sqm plot with 512 units. The Soo Teck (PW7) LRT Station is less than 450 metres from the project, while the Punggol (NE17) Station, which serves the North East Line (NEL) and houses the Punggol Bus Interchange, is around 700 metres from the project. The Tampines Expressway (TPE), which is just adjacent to the project, makes it simple to drive to anywhere on the island.

The first thing we noticed about the project is that it offers a wide range of floor plans. For 3-Bedders, it includes 3-Bedroom Standard, PES, Sky Unit, Dual Key, Dual Key PES, Dual Key Sky, Cospace, Cospace PES, Cospace Sky, Premium, Premium PES & Premium Sky. (That’s a lot of variation!)

If you’re wondering what the Sky Unit and Cospace layouts are like, you’re not alone! 

We took a look at the Sky Unit layout, and it is essentially a penthouse unit with a higher ceiling in the living room space, giving it a luxurious loft-living experience. It features a squarish layout with the bedrooms tucked on the one side of the unit. 

The Cospace layout is slightly more unique, in our opinion. Entering the unit, you will be greeted by a wide living and dining room space, with a wide balcony right beside. On the left of the entrance, you will find an allocated space for a dry kitchen that extends into the main kitchen, yard, and utility room. Further into the unit, what we find special about this layout is that the common bathroom is tucked right in the middle of the two common bedrooms, while the space where the common bathroom is typically found is replaced with a study room. This is rare for 3-Bedder units, as the layout is usually too compact to fit in a study. Furthermore, this layout features an allocated space for a walk-in closet in the master bedroom, which is quite popular amongst young homeowners nowadays.

The 3-Bedder units currently listed are mostly 1,055 sqft to 1,216 sqft, averaging around $1.4M to $1.5M. While this is slightly pricier than other developments in Punggol, even those that are nearer to the MRT station, we feel that the premium is worth it, given the unique floor plans available that can’t be found elsewhere. Those who may want to explore having a more unique layout in their home will appreciate this feature.

5. Prive

Located south of Parc Centros, Prive is another project within 5 mins walking distance from Punggol MRT. Its land size of 22,497 Sqm with 680 units makes it one of the biggest and most spacious projects in Punggol. 

The 3-Bedders currently listed are the 3-Bedroom Type C2-b2/C2-b2a (1098 Sqft) and the 3-Bedroom Suite Type C3-b1 (1,184 sqft) variations, which range from $1.38M to $1.5M. These variations feature extra balcony space, which gives the units a larger floor area. We think the Type C3-b1 (1,184 sqft) variation has great potential, even though it is unsurprisingly pricier due to its larger floor area. In terms of PSF, this variation has a lower PSF ($1,266) compared to its smaller counterparts which are going for $1,300 PSF. But of course, this may be partly due to the renovations done or other factors that may not be reflected on paper.

The 3-Bedroom Suite Type C3-b1 (1,184 sqft) also boasts a dumbbell layout, with one of the common bedrooms having an ensuite bathroom. We think that the suite feature of some of the units in this project is quite attractive, especially for buyers or investors considering rental potential and yield.

6. Waterbay

Waterbay is the smallest project in Punggol, sitting on a land size of just 13,232 Sqm with 383 units. Located right next to Edgefield Primary School, it has good accessibility via bus stops towards the north and south of the project and is a short 4 mins walk away from Cove LRT station, which connects to Punggol MRT station.

For families with school-going children, Waterbay is sandwiched between Edgefield Primary and Punggol Secondary School. Punggol View Primary, Oasis Primary, Horizon Primary, and Edgefield Secondary School are within 1km of the project. With the abundance of schools in the vicinity of the project, parents will have plenty of options.

The 3-Bedders currently listed are of the Type C2 and C2a floor plans, averaging $1.42M. Both variations have similar layouts, but the bigger Type C2a units feature an additional balcony space in the master bedroom and are currently listed with an asking price of $1.45M. Those who appreciate the extension of personal space in the master bedroom might want to consider the slightly pricier layout.

7. The Amore

The second smallest project in Punggol, The Amore, sits on a 13,573 sqm plot of land with just 378 units across six blocks. Each level houses four units, amply spaced out to optimize privacy. 

The first thing we noticed about the project was the open field across the street from the outer stacks of blocks 53 and 53A. Although this creates some distance from the Punggol Fire Station, it could still be a potential obstacle for those sensitive to high noise levels from the passing sirens. Furthermore, according to some Google Reviews, there are no public shower facilities for visitors at the condo. The drop-off point at the entrance is also not sheltered, although you can easily resolve this by dropping off at the basement carpark instead.

Like many other projects in Punggol, The Amore is surrounded by reputable schools like Horizon Primary and Greendale Secondary. In terms of amenities, it is around a 4 mins walk away from Kopitiam and Giant and roughly a 7 mins walk to Oasis LRT station and Oasis Terraces mall.  

The 3-Bedders currently listed are the 3-Bedroom Type B2 (990 sqft) and 3-Bedroom Premium Type BP (1,098 sqft) layouts, averaging at $1.27M and $1.37M, respectively. Both have very efficient layouts, with the 3-Bedroom Premium boasting an additional utility room and bathroom behind the kitchen space. The large balconies in this project could also be an attractive feature, with the possibility of turning it into an al fresco dining area or even a study.

8. The Terrace

The Terrace is one of the two condos in Punggol (the other being Watertown that sits atop Waterway Point) that offers waterfront living, overlooking Punggol Waterway. Piermont Grand, which TOPs in 2023, will join them as the third. It is served by Kadaloor LRT Station, which is a 2 mins walk away. One LRT station away is Oasis Terraces mall, with plenty of amenities available.

Since it is located right next to Punggol Waterway, residents get easy access to Punggol Waterway Park which leads to Sengkang Riverside Park on one end and Sungei Serangoon PCN on the other. Those who are more adventurous can also cycle across the Lorong Halus Red Bridge for access to Coney Island and Pasir Ris, which makes for an excellent weekend recreational activity for families!

Most of the 3-Bedders that are currently listed have the Regular (Type A, 1,001 sqft) and Premium (Type B2/B3/B4, 1,076 sqft) layouts. One thing we noticed about the Regular layout is the elongated entrance leading to the kitchen and dining area. While it might provide more privacy as it creates more distance from the living area, the space might become inefficient or wasted – something to consider prior to renovation. We think the space could potentially fit some storage cabinets, display wall for collectables, or even a feature wall. 

One of the common bedrooms in the Regular layout is also smaller in size, and would probably not have enough space for anything bigger than a single bed. On the other hand, the Premium layouts offer larger common bedrooms, with space to spare even after fitting in a queen size bed.

9. Twin Waterfalls

Located to the southwest of Punggol MRT and next to Punggol Green Primary School, Twin Waterfalls sits on a 25,164 Sqm plot of land with 728 units. 

In terms of connectivity, Twin Waterfalls is serviced by bus stops to the north and west of the project, both of which can connect residents to Punggol MRT and bus interchange. Alternatively, it is an 11 mins walk.

As for the number of units, it is second only to The Terrace, so it is no surprise that it also has one of the highest volumes of transactions.

What we like about this project is that it offers three types of 3-Bedders – Compact, Regular, and Dual Key. For the uninitiated, dual-key units are essentially two self-contained units within the same property. They are highly sought-after as it gives the homeowner a lot of flexibility in terms of rental and own-stay. Investors can choose to rent out ‘both’ units for a much higher rental yield. Multi-generational families can have more privacy by staying in two ‘separate’ units. And lastly, hybrid owners can stay in the studio or main flat and rent out the other while maintaining privacy.

10. RiverParc Residence

RiverParc Residence is the project furthest away from Punggol MRT, but it makes up for that with its proximity to Kadaloor LRT Station. It also offers unblocked views of Punggol Waterway to the northeast side and Sungei Serangoon River to the southeast side across the PAR Golf Range.

East of the project is the upcoming Waterway Sunrise II BTO, originally slated to be completed between Q1 and Q2 2021 but was since pushed back to between Q4 2022 and Q1 2023 after COVID-19 delays. This could offer a good exit strategy for investors as HDB upgraders from this BTO might look toward the nearby RiverParc Residence after its MOP.

Like Twin Waterfalls, Riverparc Residence offers 3-Bedroom Dual Key units with a decent size of 1,227 sqft. At the time of writing, only one such unit is listed, with an asking price of $1.49M. As we mentioned earlier, dual-key units are highly sought-after and getting rarer, so we feel that one available at this price is worth considering.

Other units available are the C1 and C1a types (990 sqft), averaging $1.29M. One potential obstacle we foresee for this layout is how the kitchen is right outside one of the common rooms. For families that do heavy cooking, grease and smoke might be an issue, and buyers should put more consideration into the renovation to enclose the kitchen properly.

11. Waterwoods

Right next to FLO Residence, Waterwoods is a relatively small development sitting on a 14,307 sqm plot with 373 units. It is a 4 mins walk to Coral Edge LRT Station, which connects to the Punggol LRT network and Punggol MRT. You will also find Punggol Plaza and Punggol 21 CC 8 mins north of the project. Towards the northeast side, an 8 mins walk will lead you to Riviera LRT Station and the future Cross Island Line MRT Station. From Riviera, a short walk will also take you to the Punggol Container restaurants and bars, with recreational activities like prawning and pool/billiards. 

Like FLO Residence, specific stacks facing the southeast might get unblocked views of the Sungei Serangoon Rriver, but future developments to the currently empty plot of land to the project’s south might change that.

At the time of writing, the only 3-Bedders here with an asking price of below $1.5M listed on the market are the Type B3 units. This efficient layout offers a wide balcony that expands the living and dining room space, making the unit feel bigger overall.

Final Words

Overall, Punggol is a good location that is perfect for families with many projects within 1km of a reputable school. As Singapore’s first eco-town, the greenery and scenic waterfront views of many of the projects in Punggol offer nature lovers an unparalleled living experience. 

With Punggol MRT Station and Riviera LRT Station being part of the upcoming Cross Island Line, the current entry prices for the condos here look very attractive. They will likely see an appreciation in the coming years. If you are interested in any of the developments we have mentioned, do feel free to contact us. 

Till next time, stay tuned for more PLB research and featured insights! Take care!

Disclaimer: Information provided on this website is general in nature and does not constitute financial advice.

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