Why Renting is the New Home Ownership in Singapore

With skyrocketing property prices and evolving lifestyles, more Singaporeans are finding renting to be a practical and often better choice. Here’s why renting is becoming the new home ownership in the Lion City.

FLEXIBILITY AND MOBILITY

Renting offers the freedom to move easily, whether for job opportunities, lifestyle changes, or personal preferences.

For instance, my friend, a marketing executive, recently secured a job in a different part of the city. As a renter, she could effortlessly relocate closer to her new workplace in Raffles Place, avoiding the hassle and cost of selling a property. This move significantly reduced her commute, giving her more time for herself and the things she cares about.

FINANCIAL CONSIDERATIONS

Owning a home in Singapore requires substantial financial commitments, from hefty down payments to long-term mortgage repayments. According to the PropertyGuru Singapore Consumer Sentiment Study H2 2022, younger Singaporeans (aged 22 to 29) are increasingly turning to renting due to insufficient savings for property purchases. This is not surprising, given that young, unmarried Singaporeans face restrictions in the HDB market. These restrictions include the need to apply as a couple or family unit, or wait until they turn 35.

Property costs can be overwhelming, but renting allows for better cash flow management. Without the need for a large initial payout, individuals can invest in their businesses, save more, or enjoy experiences that enhance their lives.

DEPRECIATION AND MAINTENANCE COSTS AVOIDANCE

Owning property involves more than just the purchase price. Maintenance, repairs, and renovations can accumulate costs over time. Moreover, property values may depreciate.

On the other hand, renters are free from these additional expenses since landlords usually handle property upkeep. This leads to significant savings and less financial stress.

ACCESS TO PRIME LOCATIONS

Renting can provide access to prime locations that might be unaffordable or unavailable to buy. Living close to the city center, with its vibrant lifestyle and convenient amenities, often comes with a high price tag for buyers. Renters, however, can enjoy these benefits without the long-term financial burden of a mortgage.

LIFESTYLE CHOICES

For many young professionals and expatriates, renting suits their lifestyle better. The flexibility to move closer to work, live in trendy neighborhoods, or enjoy various amenities often outweighs the traditional desire for home ownership. Renting supports a lifestyle that values convenience over long-term financial commitments.

For instance, my cousins, who are avid travelers, leave home once or twice a month. They can easily spend a month exploring Europe since they aren’t tied down by home ownership and its maintenance.

MARKET VOLATILITY

The property market in Singapore can be unpredictable, influenced by economic conditions, government policies, and global events. Renting provides a cushion against market volatility, as renters are not directly affected by property value fluctuations. This stability is particularly appealing in uncertain economic times.

IN A NUTSHELL

While home ownership has long been seen as a cornerstone of financial security, the trend in Singapore is shifting. Renting is increasingly recognized as a practical, flexible, and financially sound alternative.

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As the saying goes, home is where the heart is – and for many, that heart is happier and freer in a rented space.

Sources: 1,2, & 3

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Expanded Occupancy Cap for Larger HDB & Private Residences: Allowing Up to 8 Unrelated Individuals

Between January 22, 2024 and December 31, 2026, the Housing & Development Board (HDB) and the Urban Redevelopment Authority (URA) announced a temporary relaxation of the occupancy cap for larger HDB flats and private residential properties. During this period, these accommodations will be permitted to accommodate up to eight unrelated persons, an increase from the current limit of six. This measure aims to address rental demand and support households seeking rental accommodations.

This relaxation applies to four-room and larger HDB flats, living quarters of HDB commercial properties equivalent to at least a four-room flat, and private residential properties of at least 90 square meters. However, any extension of this relaxed occupancy cap beyond 2026 will be subject to review based on market conditions at that time.

Minister for National Development Desmond Lee highlighted the surge in residential rents, largely attributed to heightened demand amidst construction delays caused by the Covid-19 pandemic. To alleviate this situation, the government accelerated housing supply, with nearly 100,000 homes slated for completion by 2025. Mr. Lee emphasized that this increased supply would enable Singaporeans to vacate rental units sooner, thereby freeing up rental stock.
He stated that the government “(anticipates) the need to maintain a healthy rental supply to support those seeking to rent.”

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To ensure a harmonious living environment, the temporary measure applies only to larger properties capable of accommodating more occupants with minimal impact on their surroundings. Residential property owners currently housing up to six unrelated persons must apply to HDB or URA, depending on the property type, to include additional occupants. Private property owners can register their properties through URA’s e-services for a S$20 administrative fee.

HDB and URA reiterated that the existing rule requiring HDB flat owners and commercial property owners to obtain approval before commencing tenancy remains unchanged.

Applications for renting out HDB flats or bedrooms can be submitted online through HDB’s e-services, with an administrative fee of S$10 per bedroom or S$20 per whole flat rented out. Similarly, HDB commercial property owners and tenants seeking to rent out living quarters can apply via the GoBusiness Licensing Portal, with an applicable administrative fee of S$100 per application.

Furthermore, to meet growing housing demand, the government has bolstered the supply of both public and private housing units, collaborating closely with the construction industry to address supply-side challenges.

With a significant surge in housing supply anticipated in the coming years, rental demand is expected to be sufficiently addressed. This year, around 40,000 homes are projected to be completed across public and private residential sectors, marking the highest completion rate in five years. Furthermore, from 2023 to 2025, approximately 100,000 public and private residential units are scheduled for completion. HDB is also doubling the supply of flats under the Parenthood Provisional Housing Scheme (PPHS) to about 2,000 units, compared to 2021.

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For enquiries regarding the rental of HDB flats/living quarters, the public can write in using HDB’s e-Feedback form, or contact the HDB Branch Service Line at 1800-225-5432 (for HDB flats) or HDB Commercial Enquiry Line (for living quarters) at 1800-866-3073. For enquiries regarding the rental of private residential properties, the public can reach out via URA’s e-Feedback form or contact the URA Development Control Line at 6223-4811.

Sources: 1,2, & 3

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Is Romance a Casualty of BTO-Driven Marriage Proposals?

In Singapore, the equivalent of “Will you marry me?” often translates to “Want to apply for BTO together?”

The surging demand for housing has led many Singaporeans to embrace this approach. Additionally, with the average waiting time for the completion of a Build-To-Order (BTO) flat being three to five years, it has become customary for couples to ballot for one before formally proposing.

However, recent initiatives such as shorter waiting times for certain BTO flats and more booking options for Sale of Balance Flats (SBF) may have influenced how some Singaporeans perceive marriage proposals. Interestingly, a 2021 Valentine’s Day survey by Property Guru on Instagram Stories revealed that 55% of respondents considered a BTO proposal unromantic, while 45% disagreed.

ADVANTAGES

#1: BTO or Resale Flats

HDB BTO flats offer an affordable option for property ownership in Singapore, as they are subsidized by the government with CPF housing grants available. After fulfilling the five-year Minimum Occupation Period (MOP), owners can sell the flat on the open resale market, often at a higher price.

Purchasing a resale home appeals to many as they have the freedom to choose a preferred location and are not bound by waiting times. Resale flats near MRT stations are particularly sought after, given that many Singaporeans rely on public transportation.

One of the significant advantages of buying a BTO is the potential to receive HDB grants, which can result in substantial savings. Grant eligibility varies, so it’s essential to carefully review the available grants to maximize benefits.

#2: Upgrade to Private Property

Profits from selling a property can be reinvested in another property, potentially allowing for renovation and investment. Some couples view their BTO as a stepping stone to upgrading to a private property.

#3: Discussion of Property Prices

Pricing plays a crucial role in the decision-making process of buying a home. Discussion of pricing elements is made easier with a partner. Properties in mature estates tend to be more expensive than those in non-mature areas. For instance, a 3-room flat in Kallang/Whampoa can cost more than double the price of a similar-sized flat in Jurong West.

DISADVANTAGES

#1: Lengthy Completion Time

One drawback is the lengthy process involved in BTO flats, with an average completion time of three to five years. This duration, coupled with the need to fulfill the MOP, means it could take up to a decade before profiting from the property.

#2: Ballot Basis of Flats

Allocation of BTO flats is determined by ballot, leaving success to chance. Applying for less popular projects may increase the chances of securing a unit. As popular launches often see high demand, it results in fierce competition.

#3: Potential Breakup

There’s the possibility of a couple breaking up and needing to cancel their BTO flat application. While forfeiting the application fee and deposit is a minor concern, it’s crucial to prioritize ending an unsuitable relationship over forcing a union.

Should You Apply for an HDB BTO Flat After Proposing?

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It’s essential not to rush into committing to a partner solely for property purchase reasons. BTO isn’t the only option as alternatives like renting or living with family can be considered.

Whatever decision is made, it should be mutually beneficial. Marriage is a long-term partnership, and buying a home is a significant step, so careful consideration of wants and needs is paramount.

Sources: 1 & 2

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HDB Prices Continue Their Steady Rise in 2Q 2023

In the second quarter of 2023, HDB resale prices marked their 13th consecutive quarterly increase, rising by 1.5% quarter-on-quarter (q-o-q). This adds to the 1% q-o-q increase witnessed in the first quarter of the year, reflecting a sustained uptrend in the public housing market.

While the prices have been steadily climbing during the first half of the year, it’s worth noting that the pace of resale price growth has shown some moderation compared to the overall trend observed in 2022, where the average quarterly growth was 2.5%.

According to the latest public housing statistics, executive flats saw a significant 2.3% q-o-q increase, with prices rising from $800,000 in 1Q 2023 to $818,000 in 2Q 2023. Meanwhile, five-room flats also experienced a rise of 1.9%, with prices climbing from $638,000 to $650,000 during the same period.

Let’s take a closer look at the areas that experienced the biggest price increases for HDB estates in 2023, compared to the growth observed from 2020 to 2023:

3-Room Flats:
– Bukit Batok recorded a substantial price growth of 52.53%
– Toa Payoh followed closely with a growth of 50.35%
– Sembawang saw a rise of 43.26%
– Woodlands experienced an increase of 42.84%

4-Room Flats:
– Bukit Batok topped the list with a remarkable growth of 59.71%
– Sembawang followed with a growth of 48.82%
– Ang Mo Kio saw a rise of 43.86%
– Woodlands experienced an increase of 38.64%

5-Room Flats:
– Sembawang led the way with a substantial growth of 47.07%
– Bukit Batok closely followed with a growth of 46.03%
– Woodlands experienced an increase of 40.19%
– Choa Chu Kang saw a rise of 32.01%

The Housing Development Board (HDB) attributes the moderation in the rate of price increase to the government’s measures aimed at maintaining a stable and sustainable property market. These measures, implemented in December 2021, September 2022, and April 2023, include a 15-month wait-out period for private property owners before purchasing a non-subsidized HDB resale flat and a lowering of the loan-to-value limit for HDB housing loans.

Analysts have noted that the slower price increase observed in the second quarter is not an isolated event. Eugene Lim, key executive officer of ERA Realty Network, emphasized that 21 out of 26 HDB towns experienced price gains in the second quarter, compared to only 12 towns in the previous quarter.

Geylang stood out with the highest increase in resale flat prices at 18.7%, followed by the Central Area with 8.6% and Bedok with 4.3%, according to Mr. Lee.

It’s worth mentioning that the resale flat prices in Bukit Timah have seen a contraction for two consecutive quarters, and this could be attributed to factors such as a lack of new supply and an aging stock of resale flats.

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In conclusion, the HDB resale market continues to show strength, with prices maintaining an upward trend. While the rate of increase has slowed somewhat, the market remains dynamic, and various factors, including government measures, continue to influence price movements across different HDB towns.

Sources: 1 & 2

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Neighbor Disputes: 5 Ways To Peacefully Manage Them

As I moved to three places in three years, I have had my share of difficult neighbors. You may love your home but getting stuck with awful neighbors can have you thinking of moving out. Here are some tips on dealing with rude, nosy, or difficult neighbors without causing too much drama.

#1: KNOW THE DIFFERENT TYPES OF NEIGHBORS

From nosy neighbors to dangerous neighbors, there are diverse types of neighbors that you need to watch out for. Red flags exist for a reason. Do your best to weigh whether the situation needs to be managed or not. Let us illustrate through the “richer than you neighbor”.

The “richer than you” neighbor refers to the people whom you try to keep up with. These people parade their flat renovations, new car, and shiny gadgets. Despite doing nothing wrong, you may start to brew feelings of jealousy or inadequacy.

Remember that you do not know the whole story. Focus on the qualities of your home that make you happy. Revel in pride as you take care of your indoor garden. Focus on these positive things and stay contented with what you have.

#2: CREATE A LOG OF QUESTIONABLE BEHAVIORS

The truth is, we are not aware of all our actions. Your neighbor may not be aware that he or she often blasts the volume of their television or that you can hear them scream at each other. Make a documentation of the offending behaviors to help your case when you need to present it to the housing board or the property owner.

Store a log of the offending behaviors and take a note when it happens. Add any communication you and your neighbor have had regarding the problem. Do not forget to write what you have discussed.

#3: DO YOUR RESEARCH ON THE RULES AND REGULATIONS

Whether you live in an HDB Complex or a Condominium, there are a set of guidelines dictating tenant behavior. Check your housing contract or do your online research to know the rules and regulations of your place.

For instance, playing loud music after 10 pm is not allowed. If your neighbor is in clear violation of these rules and regulations, you will have a stronger case when you go speak to them.

#4: COMMUNICATE POLITELY AND DIRECTLY

Before going to the upper management to raise your disputes with the neighbors, try to speak with them first. Give your neighbor a chance to fix the problem and hear him or her out. If you are not comfortable with face-to-face confrontation, you may leave a note or send an email to highlight what is going on.

Be polite and direct to let your neighbor know what affects you. Try not to use accusatory language, which can put your neighbor on defensive mode.

#5: DO NOT REACT IN THE MOMENT

The best advice that I received was to put some space between the incident. Do not react in the heat of the moment, because you might do something wrong. Avoid saying anything that you would regret in the future.

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Take time to figure out what you want the resolution to be. Your goal is to express what happen and solve the problem together. Compromise if needed.

Sources: 1 & 2

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