Buying a Home in Singapore: 4 Facts You Need to Know in Advance

Almost anyone with the necessary funds can buy property in Singapore, but their rules are a bit more complicated than what you might be used to. For example, both foreigners and local citizens have legal restrictions and requirements in relation to owning real estate, but they do not overlap at all. As we discuss the important points, these rules and conditions will start to make more sense.

Foreign Expats: Get to Know the Restrictions

Expatriates and long-term visitors from other nations are allowed to buy property in Singapore. They can even apply and get approved for bank loans to buy the home they want. However, there are conditions, requirements, and restrictions that apply to a foreigner’s right to buy property in the country. Make sure that you are indeed eligible to buy the property in question, before applying for a loan in relation to that property. Look through the following points to understand how real estate laws apply on foreigners in Singapore:

  • Foreigners are not allowed to buy Housing & Development Board (HDB) flats that are less than 10-years old.
  • Foreigners are allowed to buy HDB flats marked as Executive Condominiums (EC), which would be at least 10 years old.
  • Foreigners are not allowed to buy landed bungalows without a special permission from the local government.
  • Foreigners may apply for and attain special permissions to buy landed bungalows, but approval is not guaranteed.
  • Foreigners are free to buy private flats and luxury condos in Singapore.

If a loan application from a foreign expat is for buying property that they are not allowed to own in Singapore, the application would be invariably rejected. None of the above restrictions apply to citizens of Singapore but there are other requirements and conditions which they will also need to meet before owning a home of their own.

Citizens: Conditions and Requirements to Own a Home

There are certain restrictions against citizens and permanent residents of Singapore as well, although these are completely different from the set of rules that apply on expatriates and foreign investors. The bank will reject home loan applications from citizens/permanent residents who do not meet the legal requirements mentioned below:

  • 21 is the minimum legal age for citizens to become eligible (not independently) for homeownership.
  • 35 is the minimum legal homeownership age for single citizens if they do not have parents and/or siblings living with them.
  • Single citizens below the age of 35 are not permitted to buy or own a home, unless they have parents/siblings living with them.
  • Married citizens with a wife and/or children can become a homeowner at any age after 21.
  • Single parents aged less than 35 are allowed to buy and own a home if they are legally divorced and raising a child.
  • Unmarried permanent residents do not have the right to buy a HDB flat, even after they are marked as executive condos.

Suffice to say that if you are a local young adult and you have plans to move out of your parent’s home, marriage is a legal requirement in Singapore. These laws of homeownership are based on local cultures and customs, so foreign investors are exempt from these restrictions.

Home Loans: Finding the Right Option

Now that the conditions, requirements, and limitations have been explained, it’s time to discuss home loans. Both locals and expats must choose their home loan based on present market conditions first and future estimates second. As of late 2022, fixed rate home loans come highly recommended in lieu of the upcoming surge in home loan rates.

PropertyGuru is the leading online platform in Singapore for all things related to real estate and even they are recommending fixed rate home loans over floating rates for now. See this OCBC home loan review on PropertyGuru to get a better understanding of the present market conditions. They do a good job of explaining how the recent changes introduced by the US Federal Reserve are affecting the price of real estate in Singapore and why that makes fixed rate home loans a safer option for now.

Expenses: What Should You Expect?

If you have not yet moved to Singapore but are considering your options, know that it’s the world’s 7th costliest nation to live in. The cost of living in Singapore is actually higher than it is in Luxembourg (8th), Norway (9th), and the United States (10th), which is a sobering fact. The average price of real estate in Singapore is found to be the 4th highest, behind only Paris (3rd), London (2nd), and Hong Kong (1st). Being an independent city-state, Singapore is the also only nation that could be included in its entirety.

Therefore, it would be a reliable conclusion to mark Singapore as a posh place for well-to-do expats and not just any foreigner. If it was not for the reserved housing developments subsidized by the government, many of Singapore’s own citizens would never be able to afford a home there. Without the availability of home loans, property ownership would have been a difficult ask for most expatriates as well.