When considering a move to another country, one of the big decisions you’ll have to make is whether to buy or rent a house. There are many factors to consider, including the cost of living in the new country, the availability of housing, and the length of your stay. For foreigners looking to live in Singapore, here are some questions to think about to help you decide between buying or renting a property.  

What are your future plans in Singapore?

One of the most important factors is employment stability. If you have a secure job with a steady income in Singapore, buying a property may be a practical choice as it will become an asset. It can eventually be a valuable investment, especially when the property market is on the rise. 

Of course, there are also risks associated with buying a property, such as the possibility that it could decrease in value or that you may not be able to sell it when you want to. Should you decide to sell your property within the first 3-year holding period, there is also a Seller’s Stamp Duty (SSD) of up to 12% that you will be required to pay. This is in accordance with the Inland Revenue Authority of Singapore. Therefore, if you are planning to sell your property in the near future, be sure to plan ahead to get the best possible return on your investment. 

On the other hand, if there is a chance that you may need to move for work or other reasons, it can be easier to break a lease than to sell a home. When you rent a house in Singapore, you can choose from a wide range of properties in different locations and price ranges. You also have the flexibility to relocate if your needs change. For all these reasons, renting can be a great option for people who want the convenience of a comfortable home without the hassle of ownership.

How much can you set aside for housing?

Another factor to consider is your personal financial situation. Buying a property requires a significant upfront investment, so you will need to have enough savings for the downpayment, option fee and other associated costs. In fact, the average cost of a home currently on the market in Singapore amounts to at least S$2 million. Beyond the initial purchase, homeowners are also responsible for upkeep and repairs of the property. 

If you are not ready to make the commitment of owning a home, renting can be a more affordable option on a month-to-month basis. The monthly rental costs can range from S$800 to up to S$8,000, depending on the location and type of property. You can consider renting an entire apartment, which gives you the privacy of your own space but may be more expensive. Or you can rent a room, which can be a more economical choice if you are living alone. 

If you are looking to stay in an HDB flat or bedroom, for instance, it can be rented out to you for at least six months. The maximum rental period per application will vary if you are a:

• Malaysian citizen: Three years. 
• Non-Malaysian non-citizen: Two years 

Bear in mind that the Non-Citizen Quota for Renting Out of Flat will apply for Non-Malaysian non-citizens. This will determine whether or not you are able to rent your selected HDB flat successfully.  

Are you able to commit to a loan?

If you are considering to buy a property, you can take a home loan as a way to finance your purchase. A home loan will allow you to spread the cost of the purchase over a period of time. If you are a first-time buyer, you can be eligible to borrow up to 75% of the property price. You will have up to 35 years or 75 years of age to repay the loan taken for freehold and leasehold property. 

However, do note that in order for your home loan to be approved, you will need a strong credit history. If you are still in the process of building your credit, you can always rent first and wait until later to buy your dream home. 

Start planning

Whether you are renting or buying a home in Singapore, it is always a good idea to have some form of home insurance in place. If something unexpected were to happen, home contents insurance can help to offset the cost of replacement for your designer furniture, fine art and other valuables. Remember that not all home contents insurance policies are the same, so it is important to read the small print carefully before taking out a policy. For more information, get in touch with Expat Insurance today.