Owning a home in Singapore can be a simple affair. HDB has done a great job in planning and executing the mission of “providing affordable, quality housing and a great living environment where communities thrive”. As of 2021, 88.9% of households are owner-occupied of which, 78.3% of households are HDB flats.
Housing Development Board Flats
Since HDB flats are subsidised by the government, they are the most affordable kind of housing to own. You need to belong to one of the 8 eligibility schemes and fulfil a 5-years minimum occupancy period (MOP) after owning one. They apply to both Build-to-Order (BTO) flat (brand new) or resale flats (2nd hand).
Subsidise are given by a discounted BTO price or in the form of grants depending on your income. For a family, your combined income should not be more than $14,000/month.
Resale flats generally cost more as you do not have to wait between 4 and 4.5 years for it to be build. As they get older, the price growth slows, stagnates then decline due to the declining lease (look up Bala’s curve). This is usually the first type of home that most purchase.
Executive Condominium (EC)
Executive Condominiums are catered for the middle-income, Singaporeans who exceed BTOs household income ceiling of $14,000/month. They are build by private developers featuring private condominiums facilities and design but with eligibility conditions and restrictions. Restrictions are lifted at the 6th and 11th year, to become a fully private condominium.
A popular choice for BTO home owners fulfilling their MOP and wish to upgrade to a condominium without having to pay private prices. This maximises the benefit of being a Singapore Citizen as you can purchase subsidised housing only twice in your life.
Private housing
When your household income exceeds $16,000 you are not eligible to purchase any subsidised housing from HDB but congratulations, as you belong to the top 20% of the population. You can choose between private condominium or landed housing. There are no restrictions and anyone 21 years of age can purchase private property (except landed housing for foreigners) in Singapore.
Some of us who qualify for subsidised housing may also want to consider private housing for the following reasons:
- No 5 years Minimum Occupation Period (MOP)
- Prices generally grow faster than HDB flats
- The ability to cash out and unlock capital through equity term loans
- Change of ownership is allowed such as decoupling
Landed Housing
Owning land in Singapore is reserved for Singapore Citizens. Permanent Residents (PR) and foreigners can only purchase landed housing with special approval from Singapore Land Authority (SLA) – Land Dealings Approval Unit (LDAU). Landed properties in Sentosa Cove are an exception where LDAU approval is easily granted as an owner-occupied home. Land is scarce in Singapore, with the increasing need for space during Covid the demand for this type of housing has grown tremendously.
Contrary to popular belief that the government does not release land for landed housing, a large plot north of Ang Mo Kio Ave 5 called the Luxus Hill Estate is being build by Bukit Sembawang in multiple phases.
What is true though is that the government no longer releases Freehold/999 years land which means that they are limited only to what is currently available. They may in fact be reducing should the government enforce the Land Acquisition Act (LAA) that enables the compulsory acquisition of private land for public purposes.
Good class bungalow
Among landed housings are good class bungalow (GCB). They must have a land area of at least 1,400 sq m (approx 15,069 sq ft) and built in the 39 gazetted areas in Singapore to preserve their exclusivity, prestige and character. There are roughly only 2,800 GCBS in Singapore making them very sought after by the rich and famous.
shophouse
An architectural heritage that dates back to the 1800s, they exist as both commercial and residential properties. Many of these buildings have been designated as conserved buildings that follow strict conservation and restoration guidelines under the Urban Redevelopment Authority (URA) since 1970s.
In particular, commercial shophouses have been a popular asset by both locals and foreigners due to their landed nature (and often freehold status) and are not subject to Sellers Stamp Duty (SSD) and Additional Buyers Stamp Duty (ABSD).
Feel free to contact me to advice which housing type you should choose and are eligible for.
