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Young and clueless about buying property? It’s ok we’ve all been there. We asked 10 millennials to submit their burning questions so we can answer them here.

Read Part 1, which answers questions regarding BTO vs Resale and the returning of CPF money.


Where is the best place to buy property?

To stay in? It’s subjective.

As for property investments, some areas do better than others. It helps to look at property trends, such as the percentage of capital appreciation and possible issues that affect its rise and dip, when deciding. Here’s a list of HDB towns that have seen the biggest rise in flat value over 15 years.

If you want a nice balance between the two, we suggest picking an area you like and expanding from there. For example, if you’ve lived in Eunos or Aljunied your whole life, you can stick to that area or look for property with equally good investment potential in the East such as Paya Lebar, Bedok, Tampines and Changi – especially since the Changi Business Hub is coming up!

How do people under 30 afford to buy a home and renovate it?

Don’t worry, my young padawan. BTOs, and HDBs in general, are priced so that the average person can afford it. There are also plenty of government subsidies to help you! You can afford a flat even with a modest, honest income of $2,000 to $3,000.

As for renovations, well, some people can probably consult the Bank of Parents, which usually offers zero percent interest instalments. For those who are not so lucky, there are bank renovation loans with a typical interest rate of five per cent per annum. Or three per cent, if you snagged a promo deal. Renovation loans start from $5,000 to a maximum amount of $30,000 (or six times your monthly income, whichever is higher) per person. Saw some banks offering zero percent instalment plans? Do it if you can pay off within the interest-free period (typically six months).

Alternatively, you can:

lower the total reno cost by opting in for HDB floors and bathroom fittings during the BTO process; they are more affordable and will be deducted from your CPF along with the rest of your HDB flat’s price.

do your renovation in parts, focusing on essential areas like kitchen and toilets first and complete the rest when you’re financially ready.

spend a little more on a resale flat with brand new or good condition fittings that suit your taste. BTOs that have just hit their MOP (Minimum Occupation Period) are good candidates.

A renovation (this includes lighting, cabinetry, white goods and furnishings) costs $40,000 to $60,000 on average depending on size of home.

What happens to a flat in the case of divorce?



It depends on whether:

– the HDB flat is a matrimonial asset

This typically means the flat was bought under HDB’s fiancé-fiancee scheme. Find out how else a flat can be considered a matrimonial asset.

For matrimonial assets, unless the two individuals have a written agreement on how to split it, the court will decide who gets to keep it and how it should be divided.

– and if the individuals have children

Having a family nucleus meets one of HDB’s criteria for retention of the HDB flat.

No children? You can retain the flat under the Single Singapore Citizen.

If other eligibilities are met, the individual may even retain it with a parent or sibling’s help. If you are not eligible to retain the property, you will have to sell the flat. The sale proceeds from this flat will first be used to pay off mortgage loans and CPF reimbursements. Its remainder will be then be distributed accordingly.

We wrote a lengthier article on this matter.

Should I keep my property, or sell it? 

First, you need to understand why you want to sell your property.

Start with having a quantifiable reason. Simply wanting to “make more money” won’t cut it. On the other hand, knowing you need to make $100,000 profit will help you decide if a) selling your current property can make you a profit and b) if the profit if substantial enough. If selling your flat will — after deducting cost of next home, its renovation, and stuff like accrued CPF interest  — only earn you a profit of $40,000, perhaps selling your property is not the best idea.

If you want to sell your HDB to upgrade to a condominium, whether you sell it before or after purchasing the condominium matters. Buying it before means having to pay an ABSD fee of 12 per cent. If you don’t dispose the HDB in six months, you will not get back the ABSD fee. An unfinished loan from your HDB may cause a low LTV, too. You’ll have to pay for more cash upfront.

Buying it after? You need to consider where you will be staying before moving in to your condominium.

When is the best time to sell my property?


The answer is — in my colleague Ryan’s words — both simple and useless. The simple answer: Sell when property prices are at a peak, and buy your next property when property prices are low.

Here’s why it’s useless: To time your decisions according to these two factors, and get it right, is hard. The last property peak happened in 2013, and the prices came tumbling down soon after. Market timing is not a great strategy for most home buyers because you only hear about it in the news, and by that time, it’s probably too late. Plus, the average person doesn’t have data tools to track the market.

Sell your property when doing so would make a profit. The timing should mostly be based on your financial situation, not the market.

What is a property valuation and Cash Over Valuation (COV)?

A property valuation is an estimate of a specific property’s value, as provided by a licensed appraiser. Each appraiser can come up with a different value. A bank loan is based on the lower of the property price or valuation, and stamp duties are based on the higher of the property price or valuation.

Cash Over Valuation happens when you agree to buy a resale property above its actual valuation. If a resale unit is valued by a licensed appraiser at $500,000, but you have already agreed on a purchase price of $550,000, then the COV will be $50,000. COV is not covered by the bank loan.

Here’s all you need to know about the COV.

What should I should look out for when buying a property for investment?

The six main things to take note of when buying an investment property are rental yield, capital appreciation, maintenance cost, rentability, and the URA masterplan.

Rental yield: How much can you earn through rent?

This refers to how much profit you can make when renting out your property. The gross rental yield is the amount of rental income vs the purchase price of the property, while the net rental yield takes into account your profit after deducting things like cost of maintenance, property tax and renovation. A typical rental yield for residential property is between two to three per cent, and commercial property is between three to five per cent. Here, we explain how to calculate rental yield.

Rentability: Can I find tenants for my property?

First, decide on the demographic you want to rent to, and then decide if the property — from its location to amenities — fits that demographic. For instance, a working single expat, a family of expats, and a student tenant all have different needs in terms of accessibility. Do they drive or take public transport? Do they need to be near pre-schools or colleges?

Consider these:

– a unit with high rentability (near town, walking distance to MRT, etc) can have low rental yield but low vacancy.

– a unit you bought at a low price can get you high rental yield, but if it’s in an ulu place then it has low rentability.

– leasehold and older condos tend to provide better rental yield as their purchase price is lower than freehold and newer units.

Capital appreciation: How much can a property’s value rise?


Capital appreciation refers to the rising value of your property, as compared to the purchase price. How much you earn can eventually go to a property upgrade or your retirement fund. Capital appreciation is fairly speculative, but past transactions of your unit or – if your property is new – those surrounding your property can be a guide. Compare it against at least five transactions for a better gauge. Some 99.co listings come with a history of transactions.

Price Per Square Foot (psf): Is this property worth purchasing?

Consider if the psf is worth a purchase by comparing it against the PSFs of surrounding property. While new private property is usually more expensive than a resale one, there should not be a huge discrepancy between the two — unless justifiable due to unique factors that only the new property has. Smaller units tend to have higher psf. We explained how to use psf as a barometer in Part 1.

Maintenance cost: Can I afford it?

Two properties can be of the same price, but one may have a higher maintenance cost than the other. How much are you willing to pay?

Maintenance bills for condos also come quarterly (not every month, as is the case for HDBs), and is typically $1,200 to $1,400 each time. High end condominiums with concierge services can cost even more. There might be an interest rate of 15 per cent per annum for late payment of maintenance fees.

District changes: How will future developments or MRT stations affect my property?

Check the URA masterplan to see upcoming changes in that area. Do you see potential in the changes, and will they directly benefit your development? One thing to note is that upcoming changes have already been factored into the cost of the property.

What should I know about my tenant before renting out my flat?

Basically, you need to suss out whether your tenant is a reliable person who will pay on time. First, ask for a work pass or student pass. Check if they are valid or call the organisations, as these passes can be faked.

Next, find out how they will be paying the rent. Some arrangements are riskier than others. For instance, a student who is working part-time to pay the rent has a higher risk of being late with payments as compared to a student whose rent is paid for by their parents. Most parents will not risk their children’s accommodation with late payments.

If they are expats or foreign workers, ask if they are self-employed. A self-employed tenant might break the lease if his business is not doing well, whereas an employee with a stable income should have no problem paying rent. Even better are employees with housing allowances.

Remember, it’s not so much about how much they are earning but how stable their income is. Knowing the above allows you to assess your risk tolerance.

New to the scene? We suggest hiring agents. You can DIY when you’ve learnt the ropes.

What should I know about financing a home?


Familiarise yourself with these acronyms: AIP, LTV, TDSR and MSR.

Approval in Principle (AIP) refers to how much a bank is willing to loan you based on your credit score and income. This will help narrow down the type and cost of properties you can look at.

Loan-to-Value (LTV) refers to the ratio of bank loan you may receive to the value of the property. Currently, the maximum LTV one can get is 90 per cent for HDB loans and 75 per cent for bank loans. This means 10 or 25 per cent of the property value will be paid in cash or CPF. The LTV is affected by the nature of the property, your credit score, and more.

Total Debt Servicing Ratio (TDSR) is a cap on the total amount you can borrow when applying for a home loan. This was put in place to stop people from taking big loans they cannot afford to pay back. Under the TDSR framework, your monthly loan repayment (which includes other outstanding debt you have such as on credit cards) cannot exceed 60 per cent of your monthly income. If you earn $6,000, your monthly loan repayment cannot exceed $3,600. More on that here.

Mortgage Servicing Ratio (MSR) is the HDB equivalent of TDSR. Here, your maximum home loan repayment is capped at 30 per cent of your monthly income. The MSR also does not take into consideration other outstanding debts; it is a calculation solely on your home loan. Here’s what to do if you don’t meet your MSR or if you earn a variable income that is hard to calculate.

When should I consider refinancing?

Refinancing is to switch to a home loan package with a lower interest rate. Usually, people start to refinance after four years as bank rates tend to jump from the fourth or fifth year onwards.

You should refinance only when the savings from the lower interest rate can cover the conveyancing fees (or “lawyer fees”) within the first year. Conveyancing fees are about $2,500 to $3,000.

If the odds don’t seem good to you, don’t refinance. If you have a lock-in with an exorbitant penalty fee, don’t refinance. Read this to avoid common mistakes Singaporeans make when refinancing.

Got questions about property? Voice your thoughts in our comments section or on our Facebook community page.

Looking for a property? Find the home of your dreams today on Singapore’s largest property portal 99.co! You can also access a wide range of tools to calculate your down payments and loan repayments, to make an informed purchase.

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