Your Ultimate Guide to Buying a Condo in Singapore

 

It’s a general sentiment that property is a good investment because it always goes up and when you think of a property to invest in Singapore, condominiums are probably the first things that come to mind.

 

However, a condo costs a lot of money—or any property in Singapore, for this matter. But, what makes them worth the investment?

 

How Do You Make Money in Real Estate Properties in Singapore?

 

About five decades ago, one could buy a landed property for about $25,000 to $30,000 in the Siglap area; today, you would pay as much as $3 million for one. Other types of housing that cost in the ballpark of $35,000-$40,000 back then would cost about $4-$4.5 million today. In both cases, prices today are approximately 100 times more than their value in the past.

 

It goes to show that when you buy a property in Singapore, you expect it to increase in value over time. This rise in value is called capital appreciation, which is the primary way to make money out of your property. For example, if you buy a condo at Treasure at Tampines today for $1 million and sell it for $1.5 million in the future, that’s an increase of $500,000 from its original value. It means when you sell it, you would enjoy capital gains, which are the result of capital appreciation.

 

Aside from selling, you can also make money out of your property through rentals. You can calculate your rental yield by adding up the annual rental income you would earn and convert it into a percentage of your property value.

 

 

 

Condominiums in Singapore are no doubt an attractive real estate investment. However, it wasn’t that long when its concept became mainstream in the local property scene.

 

The Rise and Fall of Property Investments in Singapore

 

The 1960s was a time when all people knew about were HDBs and landed properties. But, the construction of the first condo in Singapore—Beverly Mai, in 1974—heralded the era of this new housing type that took the property market by storm. It has significantly increased into a total of 118,00 condo units in 2009 and to a massive 210,000 units in 2018.

 

In the years that followed, the Singapore property market saw a few rise and fall, from the hundred per cent increase in 1990-1996 and a 20.9% increase in 2007. The 2008 Global Financial Crisis, along with the many cooling measures like ABSD, has contributed to this fluctuation in property prices in Singapore.

 

This begs the question: is a condo in Singapore a right investment for you?

 

 

 

Part I: Is a Condo in Singapore For You?

 

It is in the collective consciousness of Singaporeans that owning a property is an indication of wealth. Over the years, it has been regarded to be a good way to preserve, if not increase their riches and build up a nest egg.

 

But, exactly what are your options in housing in Singapore?

 

The Different Types of Housing in Singapore

 

The Singapore real estate market is divided, labelled, and categorised into the following forms and types of dwellings.

 

  • Public Housing – HDB Flats
    Public housing in Singapore is generally called HDB flats as they are built by the Housing and Development Board (HDB). These properties are subsidised by the government and are significantly cheaper than private housing. There are different kinds of HDB flats with different specifications—from two-room to five-room flats—to cater to different household sizes with varying income levels.

 

 

  • Private Residential Properties
    On the opposite spectrum of HDB are private houses, which while significantly more expensive, come with fewer restrictions.

 

 

These private residential properties are generally divided into two types: landed and non-landed dwellings.

 

Non-Landed Homes

 

These are strata properties where homeowners don’t own the land under the development.

 

Condominiums: The key selling point of condominiums like Treasure at Tampines is that they usually come with luxury amenities like gated security, gyms, function halls, swimming pools and sports facilities, among others. Tenures are either freehold or 99-year leasehold.

 

Apartments: These are like condominiums, but they are usually part of smaller residential projects. As such, they often come with fewer amenities and facilities, hence are usually cheaper than condos and landed housing.

 

Landed Housing

 

Landed property is a residential property where the owner has the title to the land. Given the scarcity in space, land areas sell at a premium in Singapore, hence owning one is no easy feat as such homes are some of the most expensive that only the ultra-rich can afford. These dwellings usually boast layouts, in addition to their exclusivity and privacy.

 

 

Are You Eligible to Own a Condo in Singapore?

 

A condominium is a unit within a building or a complex of buildings. Each unit is individually owned but unit owners share communal areas within the complex like recreational facilities—gym, functional hall, swimming pool—and laundry area. It’s much like an apartment building except the units are owned instead of rented.

 

While the subsidised HDB housing is exclusive to SCs and PRs, foreigners can buy private properties including apartments and condos. They can own as much as they can afford and there’s no limit in the number of properties they can buy.

 

Meanwhile, government approval is necessary for foreigners to own landed residential properties like terraced houses and bungalows.

 

Is Condo Living For You?

 

If you’re thinking about buying a real estate property—whether as an investor or a resident—condos are something that should be on your radar. This is particularly true if you’re looking at an area where real estate is downright expensive. While they are not inherently the best or worse option, there are situations where a condo is a right choice for you as a homebuyer.

 

Lower Rates: While more expensive than HDB flats, condos usually cost less than landed properties because you’re purchasing just a single unit. This is particularly true for condo units at Treasure at Tampines where prices are considerably lower than average.

 

Flexibility in Design: Depending on the arrangement with the developer, you may have the freedom to change or renovate your condo, like you would in a traditional house.

 

Less Maintenance: Most condos in Singapore have association fees that cover maintenance costs like lawn care, trash removal, and sanitation. You’ll also never have to worry about exterior home maintenance like roof replacement or cleaning the gutters.

 

Insurance Rates are Usually Lower: Because only the interior repairs and maintenance costs have to be covered, home insurance rates are often lower for condos.

 

Luxury Amenities: Condo living gives you access to luxury amenities that you may not get with a house like a swimming pool, playground, gym, gated security, clubhouse, or even a golf course.

 

Accessibility: Condos are an excellent choice if you are looking to live directly in or around the city. It cuts down your commute time and allows you to live near key establishments such as business places, restaurants, shopping centres, public transit, etc.

 

Eventually down the road when you outgrow your condo unit, it can become an investment property by renting it out and earning additional income. All these reasons make condos a good real estate investment.

 

 

Part II: How Much Do Condos Cost in Singapore?

 

Is buying a condo a good investment? Yes, if its value will increase more than its purchase price, interest rates are low—if you’re financing—and you plan on living in the condo for a few years. If you meet these three high-level criteria, you should be able to purchase a condo unit with confidence.

 

But, exactly how much do condos cost in Singapore?

 

Like any other residential properties in Singapore, condo unit prices in Singapore significantly vary according to the area. But, while there’s no ballpark figure, the average condo price is just shy of $875,000. If you wish to buy a larger unit or in a prime location, you can expect to pay an estimated average of $1 million. This is particularly true in condos located in Tampines or Clementi. Meanwhile, a two-bed condo in Central costs an average of $1.6 million.

 

Below is an estimated rundown of the cost, assuming you want a modest $1 million condo:

 

  • A minimum of 5% of the purchase price to secure the Option to Purchase (OTP) at 1% and another 4% to complete the Sale & Purchase Agreement: $50,000.
  • Another 20% of the value which can be paid in cash or a combination of cash and CPF: $200,000.
  • Assuming that the condo is your first property and you’re an SC, there is no Additional Buyers Stamp Duty (ABSD). But, you are required to pay the Buyer’s Stamp Duty (BSD), which can come from your CPF: $24,600.
  • Other small fees including valuation fees or legal fees, which can be paid in cash or through CPF: estimated $3,000.

 

So far, you’ll have to shell out about $50,000 in hard cash and an average of $227,600 in cash or CPF OA funds. After you’ve covered this amount, you can apply for a bank loan to cover the remaining 75%, assuming your bank grants you full financing.

 

 

How and What to Prepare for Owning a Condo

 

In addition to the upfront costs, you’ll also have to prepare for the other costs involved in purchasing a condo in Singapore:

 

Loan Repayment: Assuming that you’re granted a 25-year loan with an interest rate of 2%, you can expect to pay about $3,000 every month.

 

Association Fees: Maintenance fees or association dues are paid every month and costs an average of $300 to as much as $1,000 monthly.

 

Furnishing/Renovation Costs: Don’t forget the costs involved in decorating your home, which will set you back at $30,000 at a minimum.

 

Property Tax: Property tax is based on the Annual Valuation (AV) of the property.

 

What Are Your Options in House Financing in Singapore

 

There’s no denying it—purchasing a condo in Singapore takes a lot of financial preparation. Therefore, you’ll want to explore all the possible options to finance your home and in terms of finding the right housing loans for you, one factor that will impact your choice the most is your property type.

 

What you’re probably most familiar with is the HDB Housing Loan which is the default option for many’s first homes. But, needless to say, that is only applicable if you are buying public housing. So, if you are buying a private property, you can only apply for a full range of bank loans, i.e. fixed-rates and floating rates.

 

Fixed-Rate: Offers a flat interest rate within a lock-in duration, which is usually from 1-3 years.

 

Floating Rate: Also called adjustable rates, these are any type of interest rates that change based on a reference rate. Two of the most common types of floating rates are pegged to the Singapore Interbank Offered Rate (SIBOR) and Singapore Swap Offer Rate (SOR).

 

When choosing the most appropriate condo housing loan, remember to weigh in your priorities: would you prefer a stable, fixed rate or a loan that can offer you lower rates in the near term but risk paying more in the long run?

 

Ask yourself these questions and remember to look at your refinancing options after your loan’s lock-in period. You can calculate your maximum loan eligibility here.

 

 

Part III: What Should You Look for When Buying a Condo?

 

Condo living is fast becoming the norm as more and more people are opting to live in strategic locations that are near public transportations and central businesses districts. But, what should you look for when looking for a condo?

 

First off, consider whether you’re buying a new launch or a resale. When it comes to this, a collective argument is that investing in resale units is less risky for new landlords, while new launches are better suited for seasoned investors to assess.

 

By and large, going down the new launch route offers a range of great advantages:

 

1. New facilities and features – The primary appeal of a new launch is that, obviously, it’s new. You know it’s not worn down by use, and everything will be clean and shiny. It will have an impact on rentability as many prefer to live in brand new or relatively new units where the pool is new and clean, the walls are still white, and the gym doesn’t smell like old socks and sweat. In many cases, newer condos also have features that older ones do not: smart homes, concierge services, etc.

 

2. Lower maintenance costs – The older a condo unit gets, the higher usually are the costs to maintain it. With a new launch condo unit, you’re not likely to encounter issues such as blocked drains, yellowing walls, or failing water heaters in the first few years of living in it. What’s more, most developers offer a one-year defect-free guarantee, which means they are obliged to fix any problems for free within a year of purchase. Meanwhile, older condos may see rising maintenance costs as a result of the ageing building.

 

3. Early bird discounts – Most developers offer discounts such as early bird promos or direct price discounts. While there’s a great discount in resale units, the flip side is that the competition is high in the search for underpriced condos. If you just can’t find a good resale deal, the next best thing is to look at new launches or pre-selling condo units.

 

4. Wider range of options – The options with resale condos are limited to the ones that are presently on sale. But, with new launches, you get to pick the unit that you want depending on how early you buy. It means you can pick units that you know are easier to rent out such as those with a better facing or have better access to the parking lot or other amenities.

 

Investing in new launch condos may sound like a gamble, but it’s guaranteed to gain better yields than resale units provided that you look into its probable rental yield, appreciation, and overall appeal.

 

Whatever your purpose with a condo maybe, your basic goal is the same as any other investor’s—to earn more money than you originally spent on the property. In that context, it pays to know what factors affect property prices in Singapore.

 

Location & Infrastructures: As a rule of thumb, improved transport infrastructures and the rise of key establishments such as shopping malls, schools, etc, can push up property prices.

 

State of the Property: How you maintain your condo can also affect its price. The better you look after it, the more you can hike up its price.

 

Lease: Most residential properties in Singapore are 99-year leasehold. As time moves toward the tail end of the lease, you can expect a significant drop in the property value.

 

Government Policies: The cooling measures set in place early in 2009 have suppressed prices significantly, encouraging investors to invest in real estate properties.

 

Economic Climate: In a recession, you can expect demand for properties to fall as people.

 

Why Own a Condo at Treasure at Tampines?

 

Ready to invest in a condominium property?

 

Treasure at Tampines is a new launch condo in the East that boasts a total of 2,203 units, breaking the record of having the most units in a single development. There are plenty of reasons why you should make Treasure at Tampines your new home.

 

In Singapore, the standard selling price for new launch condos released for sale in 2019 averages at $1 million or higher. There are merely a few condos that start lower than that at an estimated $670,000 for a 1-bedroom unit.

 

Treasure at Tampines, however, is significantly cheaper, with its price list starting at $642,000 for the base 1-bedroom unit while the 5-bedroom sells for as low as $1,886 million—significantly cheaper than the usual 1,722 sq ft that costs $2 million upwards. Price updates are dynamic, so iif you want to get the latest rates, check out Treasure at Tampines pricing.

 

Among other key selling points of Treasure at Tampines are as follows:

 

  • Well-Known Developer – Treasure at Tampines is developed by Sim Lian Group, a reputable name known for developing and constructing some of the most diverse and functional real estate developments in Singapore.

 

  • Strategic Location – Tampines is one of the most sought-after towns in Singapore, known for its sustainable site development plan, advanced infrastructures and accessibility. Living at Treasure at Tampines means being at the heart of a well-developed community where everything is within reach.

 

  • Generous Square Footage – With more than 700,000 sq. ft of land, there’s plenty of space for everyone. The size and configurations of its units are also generous in space, with each unit being expected to house anywhere between 1-7 persons.

 

  • Functional Layouts – Each condo unit at Treasure at Tampines also has an impressive floor plan, featuring large halls and bedrooms. There is also a utility room for every unit for a washer and dryer.

 

  • Easy Access to Key Establishments – Living at Treasure at Tampines means living very close to some of Tampines greatest town gems—Tampines Mall, Century Square—as well as other essential establishments like hospitals, schools, business parks, malls, etc.

 

  • Luxury Amenities –  Right within the grounds of Treasure at Tampines are 128 facilities, including a swimming pool, outdoor and indoor gyms, function halls, and event spaces. Residents can also bike along the Tampines bicycle path and immerse in nature and wildlife at the Butterfly Garden.

 

  • Eco-Lifestyle – If you love nature, you’ll love Treasure at Tampines. It’s surrounded with rich, diverse ecological systems like the Bukit Timah Nature Reserve and Tampines Eco Green Park. Meanwhile, the MacRitchie Reservoir is a 15-minute commute from the complex.

 

All these factors position Treasure at Tampines as a great investment with a high potential for return of investment.

 

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