Singapore is not known for cheap housing, and private properties like condos often bear with them a reputation of being unattainable by common working folks. However, with the right financial knowledge, condos may prove to be surprisingly affordable.
Minimum Cash Payment and Loans
Down payment can be more manageable than you think. For instance, down payment for a condo is 25 per cent, 20 per cent of which can be paid using your CPF. Only the other 5 per cent needs to be paid in cash. If the condo is two million dollars, that works out to S$100,000, which is a large sum but not entirely out of reach. One can achieve this in 5 years by setting aside around S$1,700 a month, which is much more doable if the load is shared between a couple. If asking for loans from banks, make sure you meet the Total Debt Servicing Ratio (TDSR), which caps your monthly repayment at 60 per cent of your monthly income.
Executive Condos - A Gateway to Private Property
While Executive Condos (ECs) are initially “under” HDB, their value tends to appreciate as they are privatized after 10 years. Their values tend to catch up with condos while being sold at about a 20 per cent lower price mark. One bright perk of buying ECs is that owners are eligible for CPF grants, thus offloading a considerable amount of the costs. These factors make ECs a good choice for first-time buyers of private property
Some Condos Are Not as Expensive as You Think
Simply searching condos below S$700,000 on www.srx.com.sg would yield thousands of results, with the lowest priced around S$475,000. Also, most condo conservancy charges are paid quarterly, and most mid-range condos charge about S$300 - S$400 a month. While that is higher than HDB charges, the cost is tax-deductible. Another notable tax-deductible thing to take note is your mortgage tax rate, which is applicable if you are renting your private property out.
Deferred Payment Schemes
Deferred Payment Schemes (DPS) are payment plans that allow you to pay just 20 per cent to 30 per cent upfront for a brand-new condo, and then pay nothing for the next two to three years. Using this scheme, you may enjoy full ownership of the unit while repaying the remainder as per normal after the two or three years are up. This is a great way to begin your foray into private housing.
No Additional Buyers Stamp Duty?
Yes, you will not have to pay Additional Buyers Stamp Duty (ABSD) if you are a first-time Singaporean home buyer. Because cooling measure mainly target multiple home buyers, if this is your first time buying a home, it adds merit to the consideration of buying a private property.
Peruse for your dream home and achieve your property goals now on www.srx.com.sg.
Source: SRX (11 mar 2020)
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