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  • Writer's pictureFinancial Fortress

Housing in Singapore: Should You Buy or Rent?

Updated: May 9, 2022

It is a common knowledge that Singapore homes do not come cheap. As a matter of fact, Singapore has the second most expensive housing market in the world, next to Hong Kong.

Moreover, if you are single or unmarried, you are only eligible to buy an HDB flat once you hit 35 years old.

Because of these circumstances, many Singaporeans find it hard to buy (or even rent) their own. Most decide to stay with parents until they get married or can afford to move out on their own.

And once you’re financially ready comes the most important question — to buy or to rent?

We compare the two options below and list the factors you need to consider before fully committing to a new home.

Keep in mind that the highlighted points below are options for you if you’re looking for your first house to live in, not as investments.


Check Upfront Costs

Typically, when intending to purchase or rent a home, upfront costs are required. So comes the question, how much are you willing to fork out?

The upfront cost of Singaporean homes depends on a few factors such as proximity to the city, facilities available (pools, gym), relative age of the building, and property type. Obviously, upfront costs of renting are cheaper.

To give you a better picture, let’s compare buying and renting two HDB flats.

When purchasing a flat, the upfront costs required are a 10% - 25% down payment of the flat’s price, depending on whether you get a HDB loan or a loan from a private bank.

Let’s assume the price of the 3-room BTO flat is $300,000 and a resale flat could go for up to $500,000 in the same area. That equates to an upfront cost of $30,000 for the BTO flat and $125,000 for the resale flat.

If you were to rent a flat in the same area, however, the monthly rental would be anywhere from $2,500 to $5,000.

Typically, landlords require at least two months of advanced payment as a deposit. That means your upfront cost of renting would be between $5,000 - $10,000, which is much lower than that of buying!

Examine Your Level of Commitment

You should consider your level of commitment, too, when looking at buying or renting a home.

If you’re more of the type who wants to keep moving around, and are even considering moving overseas in the future, perhaps renting would be a better option for you.

However, if you’re looking to settle down or already have kids on the way, it would make more sense to commit to something for the long run. Thus, you may prefer to look at buying a property instead.

Look Out for Potential Renovations

More often than not, people only realise the changes they want done in their place after they have lived in it for a while. Now that people have been required to work from home, you may notice home improvements as a trend lately.

However, modifications are usually not allowed when renting a place. You may find yourself going through many rounds of negotiation with your landlord before they permit you to make the changes you want.

On the contrary, having your own place gives you the complete freedom to do major refurbishment if you’d like.

Consider How Much Flexibility You’d Prefer to Have

This one depends on your lifestyle, or overall outlook on life.

If you’re the type who is open to all the experiences life has to offer, renting is a better option for you.

You see, when you’re renting, all you have to do is just wait for your lease to end. After that, you can pack your bags and easily leave the country to go on a 6-month backpacking trip across Europe, or even do a two-year work contract in South Korea.

On the other hand, if you own a property, dropping everything is not that simple. You’ll have to think about your mortgages, taxes, maintenance fees, and other expenses that come with owning a home. That is, if you’re not looking at selling it.

Research on Available Grants and Assistance

There are various grants available that provide financial assistance to those who are intending to purchase a home.

For example, married couples can choose to apply for BTO (Build-To-Order) flats. Or if you’re single and above 35, you are eligible to apply for these under the Single Singapore Citizens Scheme.

However, even with these grants, it is important to do your due diligence in ensuring you are able to manage mortgage payments.

Unfortunately, for rentals, there is no available government assistance.

Determine the ROI of Your Property

Both options require you to pay a substantial amount of money monthly. Rent and utility bills for your rented property, or paying off mortgage if you own a flat.

However, there’s a difference between the two when it comes to ROI.

You won’t receive any returns on your rented apartment. In buying a home, however, you may eventually be able to sell it for a higher price than you bought it at.

This is why some people choose to buy a property as a form of investment.

The Final Verdict

It’s not easy to make a huge financial commitment like buying a house. Your decision ultimately depends on which one you can comfortably afford, without sacrificing too much financially.

If you’re still not sure how to start, get in touch with us. We’ll put you in touch with financial advisors who can help you study the housing market, look into your finances, and plan your next steps in looking for your new home.

Written in collaboration with our financial advisory partners at Virtus Associates.


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