Do you want to be able to afford a home in the future? Or perhaps you are planning to be a property developer or builder and are wondering how to make sure that you can afford to buy a landed property in the future.
If you’re reading this article, you probably know that buying a property in Singapore can be an expensive and challenging venture. Before you spend your saving to buy a landed property in Singapore, it is best to know your way by knowing the do’s and dont’s when you buy a landed property in Singapore.
For some reason, a lot of people still don’t know about these do’s and dont’s. In this article, I’m going to take you through a few different ways to afford a landed property in Singapore and show you what you can do to make sure that your money is well-spent. Here are the things you need to look out for when buying landed property in Singapore:
Options of landed property in Singapore
- Semi-detached house, this is a row of houses, at least three units long, with each unit having shared walls with its neighbors on both sides.
- Terrace house, the house will be built two units apart and have a shared wall in the middle, in which the layout and facade are mirror images of one another.
- Bungalow, a standalone, a stands alone building
- Good Class Bungalow, the cream of the crop, GCBs are essentially bungalows with a land area of at least 1,400 square metres and is the most luxurious of all landed properties
How much does landed property cost?
- Terrace House: S$1,800,000 – S$6,800,000
- Semi-detached house: S$3,200,000 – S$13,300,000
- Bungalow: S$3,800,000 – S$22,500,000
- Good Class Bungalow (GCB): S$9,900,000 – S$110,000,000
Can you afford a landed property in Singapore?
That’s true! While it’s difficult to calculate exactly how much you need to save to buy a landed home in Singapore by age 37, it’s certainly possible for anyone who makes above-average income and starts saving early enough. In fact, here’s how David, our average Singaporean, could do it.
- He is 37 years old,
- earns $7,500 monthly ($15,000 combined with his wife)
- and owes $1,000 in monthly car loan repayments.
The total debt servicing ratio (TDSR) determines how much a borrower can borrow. David is only able to borrow $9,000 per month because of the TDSR. That’s $8,000 after the car loan is included. Because of a reduced interest rate, he can borrow up to $1,780,560 on his new home and his purchase price cannot exceed $2.375 million.
Don’t spend all your money to buy your home
A safe amount to put down on your dream home is no more than you can comfortably afford when you want to living in landed property Singapore. The government has done its part by introducing the MSR and TDSR, and several other property cooling measures. You should never, under any circumstances, take on more debt than you can afford.
Staying in a home that you can’t afford could hurt your financial future. If you stretch yourself to afford the most expensive house you can buy, you’re likely to live an extremely stressful life where losing your job or getting sick could spell financial disaster for your family. That’s how you could inadvertently end up asset rich, but cash poor.
There might be renovation or furnishing cost you need to consider
Whether you’re planning to do an extensive renovation, a smaller one, or just a few updates here and there, a renovation project is likely to take a lot of cash out of your bank account. But it’s something we’d all be willing to do because, in the end, it’s our home for the next few years.
Even if you’re scrupulous about buying quality, a renovation isn’t cheap. It requires extensive work, such as repainting, installing new flooring, plumbing, electrical work, renovating bathrooms and kitchens, and even furnishing the home. The furniture and appliances are also expensive, so you’ll have to budget accordingly.
If you have a good credit score, it might be worth considering a renovation loan. A typical loan is capped at S$30,000 and has a 3-5% per annum interest rate. This comes out to S$888/month assuming a S$30,000 loan.
Consider using home insurance
Home insurance should be mandatory if you own a home, but if you live in a relatively safe country with little risk of natural disasters, you may not realize the importance of having it until something unfortunate happens. That’s when you’ll regret not getting your home insured. Even if it’s not compulsory to have your home insured, most homeowners choose to purchase it because it helps to protect their homes and their belongings in the event of an accident or theft.
It’s no secret that property prices are skyrocketing in Singapore. But before you get carried away by the rising property prices, you need to have a clear vision on what you want to do with your investment property. It is important to take your time when buying an investment property. You have to look at how long will it take you to be able to afford a home loan repayments, so you can make sure that your monthly budget is not getting squeezed too tight. SHEinterior gives you the perfect service to help you get the right fit landed property in SIngapore. Give us a call or visit our office for more information!
