For buyers with a limited budget, how to purchase a cost-effective property is a major concern. While buyers know that a perfect and cheap house doesn’t exist, it’s perfectly reasonable to want to choose a property that offers good value for money.
In the past, property buying was all about the price; buying meant profiting. In today’s environment, there are more and more factors to consider when purchasing property. How can one rationally choose a high-value home? We need to consider this from both positive and negative aspects: What should you buy? And what should you not buy?
Before we begin, it’s important to state: considering that Singapore’s HDB flats and Executive Condominiums (ECs) are a form of government welfare housing, purchasing one is almost a guaranteed profit. Therefore, this article will primarily focus on private condominiums.
Table of Contents
Key Point One: Location, Location, Location
This point is a well-worn cliché. The impact of location on property and its price is specifically reflected in how properties in good locations have greater potential for appreciation when the overall market is rising. Conversely, during a market downturn, properties in good locations hold their value better. This is easy to understand: a good location means lower risk and higher investment returns.
How do you judge if a property’s location is good? You need to look at whether the development has convenient transport, comprehensive amenities, proximity to commercial hubs, schools, and hospitals, nearby job opportunities, and whether there are any major red-flag issues in the vicinity.
Here are a few essential needs for buying a home in Singapore that I’ve compiled for you: MRT stations, commercial hubs and amenities, lease tenure, and schools.
1. MRT Stations. There’s even a hierarchy among MRT stations. MRT interchanges > stations in the central areas of the East-West and North-South lines > stations in the central areas of the Circle Line > stations in the central areas of the North-East Line > the remaining stations. Of course, you can view this ranking with a critical eye. Choosing a cost-effective property is about finding a “hexagon warrior” that is well-rounded in all aspects.
2. Commercial Hubs and Amenities. Food is a top priority. In Singapore, commercial hubs represent supermarkets, wet markets, food courts, and convenience stores. You wouldn’t want to wait forever for food delivery after a long day of overtime, would you?
3. Property Lease Tenure. This is equivalent to the property ownership duration. In Singapore, properties are generally divided into 99-year leasehold, 999-year leasehold, and freehold. This doesn’t mean freehold properties are always better, nor that 99-year leasehold ones are necessarily bad. The choice mainly depends on your purpose for buying, budget, and how long you plan to hold the property.
Related Articles:
4. School District Properties. In Singapore, primary school admission is allocated based on proximity, with priority for those living within 1 km, and then 1-2 km, of the school. Therefore, whether you’re considering property prices, rental yields, or future potential, properties within the vicinity of good schools have a distinct advantage.
Related Articles:
The principle is: “Good things aren’t cheap, and cheap things aren’t good.” — So, is it impossible for me to find a bargain and buy a good property for cheap?
Key Point Two: Regional Potential
Yes, it is possible, by investing in properties with high potential. The development of a region often depends on government planning. Therefore, what’s being tested is not just how much money a buyer has for a property, but also their investment vision, access to information, and ability to grasp trends.
Generally, a region with potential will have clear government plans. The counterexamples are the various ghost towns where countless people have had their properties become dead assets, leaving them in despair. Although Singapore is very transparent in this regard and doesn’t make empty promises with indefinitely delayed plans, buyers must do their homework and not rush in blindly.
Singapore’s property market is a free market guided by the government, so it’s crucial to follow government policies. Therefore, buyers need to constantly pay attention to the government’s planning blueprints. The specific channels for obtaining this information are the Concept Plan, Master Plan, and Land Use Plan formulated by the Urban Redevelopment Authority (URA).
Based on government planning in recent years, we can focus on the following areas:
Several key areas with government-planned potential, such as the Greater Southern Waterfront, Paya Lebar Airbase, Punggol Digital District, Rail Corridor, Woodlands Regional Centre, and Changi East Urban District.
Additionally, there are already maturing hotspots like the Central Area, HealthCity Novena, Buona Vista, Jurong Lake District, and more.
Related Articles:
Key Point Three: Choosing a Developer
Avoid developers with weak financial strength, poor reputation, or no successful track record. In Singapore, the top ten developers generally have a good reputation and a guarantee of quality. As for concerns about abandoned projects, Singapore has very sound policies in this area. Furthermore, for new launches, payments are made by the bank to the developer in stages according to construction progress. Therefore, it is highly unlikely for a new launch project in Singapore to be abandoned, so there is no need to worry.
Many people prioritize the environment when buying a home. A property with low density, good landscaping, a reasonable layout, comprehensive facilities, and attentive property management will be more comfortable to live in. This is a significant test of the developer’s and architectural design firm’s capabilities.
First Don’t: Don’t Only Consider the Price
Don’t get carried away by words like “discount,” “cheap,” or “bargain.” In Singapore, you get what you pay for. When buying a house, you must have a checklist of essential requirements and make trade-offs based on your actual needs. If you only consider the price, a cheaper house of the same size doesn’t necessarily mean it’s more cost-effective; it will likely tick off far fewer boxes on your checklist.
By comparing various factors based on your situation, you can quickly identify your needs. For example, if you are a single person buying a home, you might choose a smaller unit with comprehensive facilities that is suitable for both living in and renting out. If you are upgrading due to marriage or having children, a property near good schools with low density and good landscaping would be the top choice. If you are buying for investment, you should avoid old or poorly located properties and instead consider the potential for appreciation and the source of future tenants.
Second Don’t: Knowingly Avoid the Pitfalls
Due to Singapore’s unique national conditions, policies, geographical location, and property market, some of our experiences from buying property abroad may not be applicable. Below, we list some obvious pitfalls to help novice buyers avoid them.
1. Properties with 180-degree afternoon sun exposure. Singapore is located on the equator, and the afternoon sun can turn your home into a natural “sauna.” This can be a problem whether you’re living there yourself or trying to sell the property in the future. Some “vampire” types particularly dislike both morning and afternoon sun; sunlight may not always be welcome in a place that’s summer all year round.
2. Properties with poor layouts. New properties in Singapore are generally fully furnished and ready for move-in, with minimal alterations needed. Therefore, it’s crucial to choose a layout that suits your lifestyle. Singapore has a vibrant food court culture, and people often eat out. Some properties have kitchens connected to the living room that are only suitable for light cooking, not heavy cooking. Fans of Chinese-style stir-frying must pay close attention to the floor plan when buying a property.
3. Unlicensed agents from unofficial channels. In other countries, the barrier to entry for real estate agents might be very low, leading to numerous disputes. In Singapore, agents are required to have a license, and you can verify their registration number with the Council for Estate Agencies (CEA). Always choose a registered agent who can provide their credentials.
Related Articles:
4. Prices that are significantly higher or lower than surrounding properties. This is a universal rule. The price of a property should not deviate by more than 5%-10% from comparable developments in the area. Always ask for the reason behind an unusually high or low price. Generally, your agent will provide you with sufficient information and a reasonable explanation based on local price trends and their experience.
5. Properties with noise, smoke, light, or air pollution. Consider whether you can accept units on lower floors facing BBQ pits, common rest areas, or outdoor activity centers. Also, be mindful of units near the condominium’s entrance/exit, parking lots, waste disposal areas, or adjacent to main roads.
6. Properties in very small developments. Condominiums with fewer than 50 units not only have mediocre facilities but also tend to have higher prices. The most unbearable part is the exorbitant maintenance fees that are subsequently divided among the few homeowners!
Look, Listen, and Compare More
Alright, let’s summarize. High value for money ≠ cheap. View more properties and don’t make a decision on impulse. List your criteria based on your needs and eliminate properties that don’t meet your essential requirements. For the flexible criteria, list them out for a side-by-side comparison to get a clear picture. This approach can basically ensure you choose a good property without falling into any traps.
For further enquiries, please get in touch:
WeChat: sgleokwek
Telegram: sgleokwek
WhatsApp: Message us
