Singapore Property Prices: How much does a house cost in Singapore?

If you’ve been thinking about buying a flat in Singapore, it can be somewhat confusing to know about the fees and costs involved. In this article, we get down to brass tacks.

The costs of properties can vary significantly, based on factors such as location, facilities, surrounding amenities (like MRT station) and age or condition of the unit.

There will always be the occasional neighbourhood or unit in which the price is much higher or lower than the norm.

Here's what you realistically need in the bank to buy your first house, and what other expenses to prepare for.

Content

1. Property Prices in Singapore (2022)
2. Why are HDB resale more expensive?
3. Condo vs EC
4. How much money do I need to buy a house?
5. You need $36,000 to $235,000 to buy a house in Singapore

2022 Property prices in Singapore

Why are HDB resale flats more expensive? 

A resale flat costs more because home prices tend to appreciate over time. A resale flat also means there is no wait time (you may have to wait 3 to 4 years for a BTO flat to be finished).

There may be more amenities built up around the flat, as it has been around longer. This is also a reason why BTO flats in mature estates are more expensive than those in non-mature estates. 

For resale flats, there may be a premium on top of the actual flat price. This is called the Cash Over Valuation (COV). This varies significantly in different estates, from zero COV (no premium) to large amounts like $50,000.

In extreme cases, there have been 'million dollar flats' resulting from sky high COVs.

The breakthrough was 5-room HDB flat at Pinnacle@Duxton, which sold for an unprecedented $1.23 million in March 2020 and spawned a whole class of million dollar HDBs — its COV would've cost at least a couple hundred thousand.

Condo vs ECs (Executive Condominiums)

The prices we listed above are for private condominiums in general. Prices will be significantly higher for condos close to Orchard (District 9), as those would be considered luxury properties.

As a general guideline, a new Executive Condominium (EC) is about 20 per cent cheaper than an equivalent private condo. This price difference falls to around 9% after the Minimum Occupancy Period (MOP) of 5 years and narrows further to 5 per cent afterwards.

In short, deduct 20 per cent off the equivalent private condo price for a new EC, and 9 per cent for an EC that is at the 5- to 10-year mark.

How much money do you need to buy a house?

To buy a house in Singapore, you need a whole lot of cash (and CPF) savings. There are seven things you will need to pay up front:

1. 5% Down payment in cash (bank loan)
2. Legal fees
3. Home Insurance premiums
4. Renovation and furnishing costs
5. Maintenance fees
6. Property taxes
7. Mortgage repayments

We can work this out in steps, using a 3-room BTO flat priced at $180,000 and a 2-bedroom condo priced at $900,000 as our examples. 

1. At least 5% downpayment in cash

If you are using an HDB Loan, you will need to make a down payment of 20 per cent of the purchase price or valuation, whichever is higher, for flat applications received on or after 30 September 2022.

The downpayment can be paid from your CPF Ordinary Account (OA), in cash, or through a combination of both.

If you qualify for HDB's Staggered Downpayment Scheme, this down payment can be split into two instalments: 10 per cent to be paid during the signing of the agreement, and another 10 per cent when collecting your keys.

If you are using a private bank loan, you will need to make a down payment of 25 per cent of the purchase price or valuation, whichever is higher.

Do note that a minimum of 5 per cent of this down payment MUST be in cash, while the remaining 5 per cent can be paid using your CPF OA or cash. The balance 15 per cent can be paid with the monies your CPF OA, in cash, or a combination of both.

You must use a private bank loan for ECs.

Note that this total down payment is inclusive of the option fee.

The option fee is a non-refundable deposit that must be put down 2 weeks before the sale of the house. This deposit is counted as part of the down payment, once you exercise the option.

With some discipline and careful planning, you can save money for your flat’s down payment before you turn 35.

2. Legal fees

There are legal services involved in processing the paperwork for property ownership. Examples of legal fees include: 

• Stamp duty for Agreement for Lease
• Conveyancing fees
• Caveat registration fees

Stamp duty for Agreement for Lease is calculated as follows:

• First $180,000: 1%
• Next $180,000: 2%
• Next $640,000: 3%
• Remaining amount: 4%

You can also use the Stamp Duty Calculator from the Inland Revenue Authority of Singapore website to calculate the stamp duty payable for your flat purchase.

For new HDB flats, conveyancing fees are calculated as follows:

• First $30,000 of property value: $0.90 per $1,000
• Next $30,000 of property value: $0.72 per $1,000
• Remaining Amount: $0.60 per $1,000

There is no need to calculate this manually. Just enter the price of the flat in the HDB legal fee calculator.

In addition, there is a Caveat Registration Fee of $64.45 that must be paid to the Singapore Land Authority.

For our sample 3-room BTO flat with a price of $180,000, the conveyancing fee would be $121. Inclusive of the Caveat Registration Fee, this would be $181.45.

For the 2-bedroom private condo, the conveyancing fees can range between $1,100 to $3,000 depending on the bank loan rate.

Note that this price varies between law firms, and you can request to use a cheaper law firm than the bank’s default choice. If you use a mortgage broker, they will usually try to find a cheaper law firm for you.

If you use HDB’s default law firm, the conveyancing fees can be paid from your CPF. If you are using another law firm (such as one chosen by the bank), you will have to ask the firm whether fees can be paid via CPF or in cash.

For our sample condo, we will assume conveyancing fees of about $1,500.

3. Home insurance premiums

The basic fire insurance for HDB flats comes from Etiqa, and is not a significant cost ($1.50 to $7.50 depending on the size of your flat for a 5-year premium).

Basic fire insurance is mandatory but only covers damage to ‘internal structures, fixtures and areas built and provided by the HDB’ due to fire, smoke and water. For a 3-room BTO flat, it is just $4.50 for 5 years.

We strongly recommend that all homeowners get a comprehensive home insurance. This insures you against damage to furniture, renovations and personal belongings.

It also covers temporary accommodation and storage costs (you will need both in the event of fire), and third-party coverage (if the fire is your fault and your neighbour’s house burns down, they might be able to hold you liable for damages).

Although the risk of damage or theft is small, you will also have to repair and refurbish the house after any disaster, and the financial cost of that is considerable.

Typical home insurance policies cost between $45 to over $700 per annum (the most expensive policies may also include accident plans, which cover you and your family in the event of an accident).

Policies for private homes cost more as compared to flats. We will assume our sample 3-room BTO flat has an insurance cost of $45 per annum, whereas our sample 2-bedroom private condo has an insurance cost of around $200 per annum.

4. Renovation and furnishing costs

The maximum cap on most renovation loans is 6 months of your income, or $30,000. We will also assume this is the general amount spent on furnishing your unit, whether you pay it all in cash or take a loan.

Interest rates on renovation loans range from 3 to 5 per cent per annum, so be sure to compare between banks before applying. The typical renovation loan tenure is between 3 to 5 years.

Most people do end up getting a personal loan for renovations with lower interest rates.

5. Maintenance fees

These are conservancy charges in HDB estates. You will have to check the rates with your town council, but they are generally in the range of $20 to $90 per month for Singapore citizens (reduced rates). Non-citizens pay a normal rate, which is notably higher (check with your town council for specific details).

We will assume our 3-room BTO flat has conservancy charges of $45 per month.

For condominiums, maintenance fees depend on the management council. These typically range from $200 to $350 per month, although there are cases when fees are even higher — for high-end developments with a concierge service or elaborate facilities, it is possible to see monthly costs of $400 or more.

We will assume our sample condo has maintenance fees of $250 per month.

6. Property taxes

Property taxes are determined by your home’s Annual Value (AV). The AV is the annual amount that you would get from renting out your property (check with the Inland Revenue Authority of Singapore's online calculator to determine your home’s AV).

For our sample three-room flat, we will assume an AV of $14,400. The tax payable would be around $512 per annum.

For our sample condo, we will assume an AV of $36,000. The tax payable is $2,240 per annum.

7. Home loan repayments

For HDB flats, the mortgage interest rate is always 0.1 per cent above the prevailing CPF OA rate. This is currently 2.6 per cent per annum.

For private property, the current fixed home loan interest rates are at a high of 4.5 per cent.

We will assume a 25-year loan for both our sample properties. The loan for the 3-room BTO flat is $144,000 (after down payment), and this comes to a repayment of $653.28 per month for 25 years.

The loan for the condo is $675,000 (after down payment). Interest rate is 4.5 per cent. That translates to a monthly payment of $3,752.

You need $36,00 to $235,000 to buy a house in Singapore

The initial cost of the 3-room HDB BTO flat, taking into consideration all of the above, is around $36,181 (including CPF funds used). The monthly cost you have to be prepared to pay is about $744.69 per month over 25 years.

The initial cost of the private condominium would be $235,549 (including CPF funds used). The monthly cost is about $4,000 over 25 years.

So, before you commit. Ask yourself if you will be able to eat, drink, shop, spend, and still park aside $750 or $4,000 every month without fail for the home loan?

This article first appeared on Singsaver.