How Much Do You Need To Buy Your First Flat In Singapore?

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We’ve simplified the 2016 prices for a BTO flat, resale flat, executive condominium, and mass-market condominiums in Singapore. If you’ve been thinking about buying a flat in Singapore, you might have felt confused and overwhelmed about the fees and costs involved. In this article, we get down to brass tacks. Here’s much you realistically need in the bank to buy your first house, and what other expenses to prepare for.

 

What are the Property Prices in Singapore for 2016?

The costs of properties can vary significantly, based on factors such as surrounding amenities and condition. There will always be the occasional neighbourhood or unit in which the price is much higher or lower than the norm. These are general estimates only:

2016 Property Prices in Singapore
	BTO Flats (Non-Mature Districts)	BTO Flats (Mature Districts)	Resale Flats	Executive Condominiums	Condominiums (Mass-Market)
One-Bedroom Flat	–	–	–	Approx. S$420,000 to S$560,000	Approx. S$600,000 to S$700,000
Two-Bedroom Flat	–	–	–	Approx. S$640,000 to S$720,000	Approx. S$800,000 to S$900,000
Three-Room Flat	S$150,000 to S$190,000	S$200,000 to S$300,000	S$350,000 to S$380,000	Approx.S$776,000 to S$960,000	Approx. S$970,000 to S$1.2 mn
Four-Room Flat	S$295,000 to S$350,000	S$290,000 to S$320,000	S$420,000 to S$550,000	Approx S$1.12mn to S$1.4mn	Approx. S$1.4mn to S$1.8mn
Five-Room Flat	S$390,000 to S$500,000	S$400,000 to S$550,000	S$520,000 to S$700,000	Approx S$1.6mn to S$1.76mn	Approx. S$2mn to S$2.2mn
Penthouse Unit	–	–	–	Usually a minimum	Usually a minimum price of S$3mn

 

Why Resale Flats are 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 two to three years for a BTO flat to be finished). There may be more amenities built up around the flat, as it has been around longer. 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 S$50,000. In extreme cases, there have been “million dollar flats” resulting from sky high COVs. The current record holder is a maisonette in Bishan, which sold for a COV of $250,000 in 2014.

 

On Condominiums and Executive Condominiums

The prices we listed above are for most mass-market condos. Prices will be significantly higher for condos close to the Orchard area, 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 new condo. This price difference falls to around nine per cent after the Minimum Occupancy Period (MOP) of five years, and narrows further to five per cent afterward. In short, deduct 20 per cent off the equivalent condo price for a new EC, and nine per cent for an EC that is at the five to 10-year mark.

 

How Much Money Do You Need to Save for Your First Flat?

We can work this out in steps, using a four-room flat and a three-bedroom condo as our examples. In addition to these costs, we suggest you build an emergency fund that can cover six months of your mortgage payments, if your CPF is not already sufficient for such a provision.

 

1. At Least 5% Downpayment

If you are using an HDB Concessionary Loan, you will need to make a downpayment of 10 per cent of the purchase price or valuation, whichever is higher. The downpayment can be paid from your CPF Ordinary Account (OA), in cash, or through a combination of both. If you are using a bank loan, you will need to make a downpayment of 20 per cent of the purchase price or valuation, whichever is higher. At least five per cent of this downpayment must be in cash. Of the remaining 15 per cent, you can pay from your CPF OA, in cash, or a combination of both. Note that you must use a bank loan for ECs. Note that this total downpayment is inclusive of the Option to Purchase (OTP). The OTP is a non-refundable deposit, that must be put down two weeks before the sale of the house. This deposit is counted as part of the downpayment, once you exercise the option. For example: In the case of a three-room BTO flat with a price of S$180,000, the downpayment is S$18,000. This can be from your CPF OA, in cash, or a combination of both. In the case of a three-bedroom condo at a price of S$900,000, the downpayment is S$180,000. Of this S$180,000, at least S$45,000 must be paid in cash. The remaining S$135,000 can be paid through your CPF OA, or a combination of your CPF OA and cash. With some discipline and careful planning, you can save money for your flat’s down payment before you turn 35.

 

2. Conveyance Fees

There are legal involved, in processing the paperwork for property ownership. For new HDB flats, the cost of legal fees is calculated as follows:

First $30,000 of property value: S$0.90 per S$1,000

Next $30,000 of property value: S$0.72 per S$1,000

Remaining Amount: $0.60 per S$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 S$64.45 that must be paid to the Singapore Land Authority. For our sample three-room BTO, with a price of S$180,000, the fee would be $121. Inclusive of the Caveat Registration Fee, this would be S$181.45. For bank loans, the conveyancing fees can range between S$1,100 to S$3,000. 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. For our sample condo, we will assume conveyancing fees of about S$1,500.

3. Home Insurance Premiums

The basic fire insurance for HDB flats comes from Etiqa, and is not a significant cost (S$1.50 to S$7.50 for a five-year term). Basic fire insurance is mandatory. For our three-room flat, it is just S$4.50 for five years. However, you should consider comprehensive home insurance. This gives you coverage for things such as 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). We strongly recommend that all homeowners get a comprehensive insurance policy. Although the risk is small, the financial damage that can ensure is devastating. Remember that you will also have to repair and refurnish the house, after any disasters. The cost differs based on the insurer, but typical rates are between S$45 to over S$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 three-room flat has an insurance cost of S$45 per annum, whereas our sample condo has an insurance cost of around S$200 per annum.

 

4. Renovation and Furnishing Costs

The maximum cap on most renovation loans is six months of your income, or S$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 three to five per cent per annum, so be sure to compare between banks before buying. The typical loan tenure is between three to five years.

 

5. Maintenance Fees

These are conservancy fees in HDB estates. You will have to check the rates with your town council, but they are generally in the range of S$20 to S$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 three-room flat has conservancy charges of S$45 per month. For condos, maintenance fees depend on the management council. These typically range from S$200 to S$350, 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 S$400 or more. We will assume our sample condo has maintenance fees of S$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 to determine your home’s AV). You do not need to work out the amount manually. Just use this online calculator to determine your tax rate. For our sample three-room flat, we will assume an AV of S$14,400. The tax payable would be around S$512 per annum. For our sample condo, we will assume an AV of S$36,000. The tax payable is S$2,240 per annum.

 

7. Mortgage 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 mortgage rate fluctuates. However, it is has been around 1.8 per cent per annum since 2008. We will assume a 25-year loan for both our sample properties. The loan for the three-room flat is S$162,000 (after down payment), and this comes to a repayment of $735 per month for 25 years. The loan for the condo is S$882,000 (after down payment). Assuming the rate stays at around 1.8 per cent, this comes to a repayment of S$3,653 per month, over 25 years.

 

Total Cost: The initial cost of the three-room flat, taking into consideration all of the above, is around S$48,181 (including CPF funds used). The monthly cost you have to be prepared to pay is about S$827 per month, for 25 years. The initial cost of the condo would be S$211,500 (including CPF funds used). The monthly cost is about S$4,057, for the next 25 years.

5 Skills Future Courses Worth Spending Your $500 Credits On

(Singsaver.com.sg, Singapore's leading personal finance comparison platform, provides free and easily accessible resources such as its up-to-date credit card product page and the latest personal loan packages available in real-time.)

There are over 10,000 courses in the SkillsFuture directory. Use your S$500 SkillsFuture credits to learn these 5 profitable skills. With the SkillsFuture Programme and no end of private schools, Singaporeans have numerous opportunities to upgrade. Even with the S$500 SkillsFuture credit from the government, each new course is an investment of time and money. It’s important to pick the secondary skills that benefit you the most, especially with the tough job market in Singapore this year.

 

How SkillsFuture Can Benefit Singaporeans

Any Singapore Citizen above the age of 25 is eligible for an initial S$500 SkillsFuture credit that they can use to learn new skills or deepen their knowledge in their existing fields. You can use these credits on top of any government subsidies, and they have no expiration date. Currently, there are over 10,000 courses in the SkillsFuture Credit Directory.  Here are some of the most useful or profitable skills job seekers should have, and the SkillsFuture courses you can learn it from:

 

1. Business English

It is possible, but difficult, to get far in a company with poor English skills. Your colleagues may tolerate the occasional poorly worded email, but it’s hard to become a department head or senior manager if you are still struggling with past and present tenses. Apart from clarity of communication, there is the issue of professionalism and image. It should be true that everything comes down to the quality of your work, but that’s just not the reality. Your ability to speak and write well is a part of your image, just like wearing proper shoes to the office. The simple truth is that articulate employees get noticed, and are often more highly evaluated. The best part is, business English (or just regular English) courses are easy to do on a part-time basis. Many companies may even provide subsidies for select courses, so be sure to ask before signing up for one.

Take If:

•    You aspire to enter management, but have poor language skills

•    Your company requires someone who can vet documents

•    You are in a technical line of work in which you often need to read manuals or write operating instructions for others

 

Try These SkillsFuture Courses:

•    Business English Communication Skills

•    Business English for Non-Native Speakers

•    Write Professional Emails in English

 

 

2. Basic Accounting

Accounting is the language of the business world. Whether you hope to run your own business someday, or just to get into management, basic accounting is a must. While it’s possible to head a department without understanding the basics of a budget, the learning curve will be much steeper. It will also be harder to propose changes or initiate projects within the company if you cannot create a budget for such activities. In your personal life, basic accounting skills are also important for keeping your finances in order. Knowing how to tally your personal assets allows you to gauge what risks you can take, and keeping proper books means you can easily spot areas in which you overspend. A basic grasp of finance is important if you want to create your own investment portfolio. It can be difficult to understand a company’s balance sheet, or concepts such as cash flow, without knowing basic accounting.

Take If:

•    You want to run a side-business or a start-up

•    You have an interest in building your own portfolio to invest

•    Your work involves investigative elements, while also being in finance (e.g. business journalism)

 

Try These SkillsFuture Courses:

•    Accounting for Non-Finance Professionals

•    Accounting Fundamentals for Non-Accountants

•    Intensive Basic Financial Accounting

 

 

3. Skills Certification in Logistics or Supply Chain Management

Logistics is a complex process that encompasses many aspects, such as the most cost-effective way to get a product to a customer, or how to save costs when looking for suppliers and finding storage solutions. A basic understanding of logistics is helpful for anyone who wants to run a small business; whether it’s a small blogshop or a big brand distributorship, logistics teaches you to handle intricacies such as the delivery process, how to deal with returns or defective goods, how to make sure orders are seamlessly processed, and more. Logistics is also important if you are working in a courier company, warehouse, or manufacturing. Becoming a supervisor or manager is often contingent on developing skills in supply chain management. For office workers, logistics training can make you invaluable to your boss. You will be able to make suggestions regarding which suppliers and distributors to use, and spot inefficiencies in your company’s supply chain process.

Take If:

•    You want to run a business of your own, which provides a physical product

•    You want to move up to become a supervisor or manager, and you work in industries like manufacturing or delivery

•    Your job involves working with suppliers and distributors, such as being tasked with choosing your company’s vendors

 

Try These SkillsFuture Courses:

•    Professional Certificate in Logistics Strategy (Part Time)

•    Logistics and Supply-Chain Process (Two-Day Short Course)

•    Certificate in Supply-Chain Management (Part Time)

 

 

4. Social Media Management

The days of having a specialised social media manager are coming to an end. Employers increasingly expect other related professions to also have social media management skills. For example, many Small to Medium Enterprises (SMEs), upon hiring a marketing manager, will expect social media to be part of the marketing mix. Careers that involve communications, such as Public Relations or Investor Relations, also benefit tremendously from social media management. Even if you do get to hire a separate person to manage your organisation’s media, you will struggle to give them proper direction if you don’t understand how Facebook, Twitter, Pinterest, Instagram, etc. all work as whole. Note that in Asia, many traditional retailers are only now moving into the online space. This means there are numerous career opportunities to be derived from ecommerce. That’s great news for content creators, web developers, digital illustrators, etc. But these professionals will get a significant boost from also knowing how to handle social media.

Take If:

•    You want to earn income off your YouTube channel, Instagram account, etc.

•    You work in a communications-related field, and deal with Business to Consumer (B2C) content

•    You already work in a related field, such as content creation or web development.

 

Try These SkillsFuture Courses:

•    Udemy SkillsFuture Bundle: Social Media Marketing

•    Social Media Marketing at Ngee Ann Polytechnic

•    Social Media For Marketing and Branding

 

5. Statistics

Important decision makers must learn to interpret data. If you have no grasp of statistics, you will always struggle when trying to pitch big ideas; it’s hard to convince your bosses to approve million dollar budgets and projects, if you don’t know how to present statistical facts. Statistics are often underrated by those in marketing; but being able to collate and interpret survey data is always useful, when you need to position a product or service. Statistics are also useful to those who work in the media industry, as it’s not uncommon for various entities to try and skew your opinion through selective presentation of data. It’s also useful for public opinion articles, such as the ever popular “What is the happiest city to live in” or “Which countries work the hardest” surveys. Those who are work in social services, or run social enterprises, will find great use out of even a basic statistics course. You will be able to look at reams of data, and determine facts such as which neighbourhoods need the most funding, or which social groups are most in need of charitable donations. Lastly, statistics are a great way for entry level workers (fresh out of school) to impress their bosses. Few people expect an intern or trainee to be able to collate data, and identify facts such which products sell better on different months.

Take If:

•    You have an interest in social work, activism, or even politics.

•    You work in media (particularly news media), and cannot allow yourself to be confused or manipulated by statistics

•    You want to be able to create more convincing, fact-backed pitches and proposals

 

Try These SkillsFuture Courses:

•    Introduction to Statistics and Quantitative Data Analysis

•    Business Statistics, Data Analysis, and Decision Making: Part 1 and Part 2 Infographic Concepts and Data Visualisation Techniques

Food Discount Apps In Singapore That Let You Eat On The Cheap

(Singsaver.com.sg, Singapore's leading personal finance comparison platform, provides free and easily accessible resources such as its up-to-date credit card product page and the latest personal loan packages available in real-time.)

From digital loyalty cards to virtual coupon books, we’ve got the scoop on the best food discount apps in Singapore. If there’s anything Singaporeans love more than dining, it’s finding a great deal on dining. These five food discount apps not only give you savings at your favourite restaurants, bars, cafes and kiosks; they also help you find new places to try.

 

 

 

Chope

Founded with a simple mission – to help busy Singaporeans quickly and easily make dining reservations – Chope rewards users with points for each reservation made and fulfilled. These points (called Chope-Dollars) can then be exchanged for restaurant vouchers, with the base exchange rate starting at $2.50 per reservation. How Much You’ll Save: With vouchers maxing out at $30 for every 10 reservations made, some diners may find Chope’s rewards a bit too thin for their liking. In response, Chope has begun offering pre-paid vouchers that give up to 20% off the total bill. They have also set up exclusive special deals that you can check out on their website. Available on iOS, Android, and desktop.

 

Perx

If you’re tired of carrying around several loyalty cards, making the switch to Perx may be the ideal solution for you. Touted as an all-in-one loyalty card, Perx lets you collect stamps or points for every purchase made at a participating merchant. Rack up enough stamps and you can redeem them for free toppings, add-ons, upsize and more. How Much You’ll Save: More digital loyalty card than dedicated deals finder, the advantage of using Perx lies in how it eliminates the hassle of juggling multiple loyalty cards. However, if there’s one lesson we learnt during our bubble-tea phase, it’s that small amounts can quickly add up. So if you’re going to indulge in your favourite treats no matter what, you might as well take advantage of whatever perks you can.
Perx has also recently introduced the ability to earn points on your daily commute. By linking your EZ-Link card to your account, you can monetise your trips for even more savings. Available on iOS and Android.

 

Sugar

This Singapore-based start-up wants to help you discover new places to eat, shop and play. The Sugar app tracks your location, and displays a list of deals and discounts from businesses near you. Handy for finding new lunch places or getting to know your neighbourhood a little better. How Much You’ll Save: With Sugar, you’ll save anywhere from 20% to 50% on various offers. To further sweeten the deal, the app also has a “Skim” function that lowers the offer price just that little bit more. There’re several merchants that have joined the Sugar platform, so you can pick from bar drinks, desserts and individual meals, all the way up to sharing platters. Available on iOS and Android.

 

The Entertainer

A virtual coupon book that gives you access to a wide array of dining, leisure, lifestyle, beauty and fitness deals, The Entertainer has something for everyone. However, all their coupons take the form of 1-for-1 offers, so you’ll have to bring along a makan kaki to enjoy the dining deals. How Much You’ll Save: Calculating how much you’ll save is pretty straightforward – a vanilla 50%. However, beyond the first trial offer, you’ll need to purchase the coupon book for $85 before you can make use of the savings within. There are also limited coupons available for each offer, but you can purchase more using your Smiles points – an in-app currency collected based on how much you’ve saved, and by participating in social campaigns. Available on iOS, Android, and desktop.

 

Eatigo

With it’s winning formula of seamless reservation bookings, hefty discounts, and hassle-free model, it’s no wonder Eatigo has emerged as Singapore’s favourite F&B app. What you book is what you get, so there are no finicky rules like minimum number of persons, or paying for a whole stack of coupons just to get the ones you really want. How Much You’ll Save: Eatigo offers discounts ranging from 10% to 50% but do note that the actual discounts vary according to the time slot set by each restaurant. With the app’s large stable of partner merchants, you are just as likely to find discounts on popular haunts, as you are to enjoy hefty savings during off-peak hours. Available on iOS, Android, and desktop.

 

Make Every Bite Count

Eating is truly one of life’s simple pleasures, and with these apps, you can enjoy some serious savings while indulging in your favourite treats. To stretch your dollars even further, use a cashback card to pay for your dining expenses. Consider charging your meals to the ANZ Optimum World MasterCard Credit Card, which (as long as you’ve selected the dining category) allows you to earn 5% cashback per quarter with no maximum cap.