Should I rent or buy if I'm moving to Singapore?

International Property
Navigating Singapore's property puzzle? Explore the advantages and drawbacks of renting versus buying in this global financial hub. Unravel the intricacies influenced by urban planning, high demand, and distinct government regulations.

Navigating Singapore's unique property landscape 

Are you moving overseas and not sure whether you want to rent or buy? Don’t worry, you’re not alone. This is a pivotal decision during any international relocation, and we’ve been helping people make the decision that works best for them and their family for decades.


Before delving into the specifics of each location in our series, it's essential to understand the overarching factors that influence this decision, regardless of where in the world you're headed.

We've prepared a list of questions and considerations that you should be asking yourself regardless of where you're moving in the world. These should be the very first things you weigh up in your mind, before you make a decision about renting or buying in your new home. 

Remember too, that if you're moving for work, much of this is contingent on what your assignment contract stipulates about living expenses (if any): 
  •  Just a Pit Stop?: If you're only setting up camp for a short while – for example, a short-term assignment or secondment, renting might be your best bet. After all, it has a lower up-front cost. 
  • Here for the Long Haul?: Is it a permanent move, or maybe your employer has booked it in as a long-term assignment? Maybe buying's your game. Just remember, it's a commitment.
  •  The Money Talk: Different places, different rules. Get the lowdown on local market dynamics. Is it a buyer’s market, or are you better off renting?
  • Can You Even Buy Here?: Dive into the do's and don'ts. Some countries have restrictions for foreign property owners.
  • Upfront and Ongoing Costs: Owning isn't just about the buying price. There are maintenance costs, taxes, and maybe homeowner association fees. Renting might be easier on the wallet, at least for now.
  • Thinking of Another Move?: If there's another potential move in your future, think about how fast you can sell and get your money out.
  •  Dive into the Deep End: Renting can be a quick way to get a feel for the local vibe, helping you adjust faster.
  • Custom Space, Custom Pace: Owning means you get to shape your space. If leaving a personal touch is your thing, buying might be up your alley.
  • Best of Both Worlds: Sometimes, it's smart to complete your move and rent first. Get the lay of the land, then decide if buying's the move. Plus, it’s a two-step approach to settling down.
  • Buying from Afar: It's doable to buy property overseas without visiting. But, like buying shoes without trying them on, there can be surprises. Do your research and if you can, maybe take a trip to see it first hand. Remember that "buying from afar" may involve a higher down payment and interest rate from the mortgage lender. 

The Singapore Housing Market

  
The average cost of a condo in Singapore (you’re not able to access government-backed housing as a foreigner) was around US $1.4 million. A house will set you back an eye-watering US $3.5 million on average, although, as with other East Asian metropolises, owning a house is incredibly uncommon even among well salaried expatriates. 

The rental market has started to cool earlier than the purchase market, with the first half of 2023 seeing the first recorded decline in rental property prices since 2018. This is owing to an increase in supply of Housing Development Board (HDB) and condo properties, as well as a decline in demand. Despite this, Singapore remains one of the most expensive rental markets in the world, with prices for studio apartments averaging out at around US $1,300 per month, and three-bedroom apartments around US $3,000. 

Note you can rent HDB flats at much lower rates than this, but it typically involves living with the landlord. 

If you’d like a more thorough treatment of what sort of properties foreigners can rent in Singapore, we’ve created a full guide here. 

Stamp Duty in Singapore

  1. Buyer's Stamp Duty (BSD): All property buyers in Singapore need to pay BSD, calculated as a percentage of the property's purchase price or market value. As of 2023, this ranges from 1%-6%, although a typical HDB flat would involve a BSD rate of 3%. 
  2. Additional Buyer's Stamp Duty (ABSD): This is an additional tax imposed on certain categories of property buyers, including foreigners and those buying a second or subsequent property. ASBD is crucial to understand as, even if you have permanent residency, a first-time property purchase will involve additional stamp duty of 5%. 
  3. Seller's Stamp Duty (SSD): If you sell your property within the first three years of purchase, you'll be subjected to SSD, which is a form of penalty to discourage property flipping.

What's the interest rate situation?

Much like the rest of the world, mortgage-lending in Singapore is currently operating in a (relatively) high interest rate environment. As of October 2023, mortgage packages in Singapore tend to range from 3-4%. It’s expected that interest rates in Singapore will not rise any further, largely due to the fact the U.S. Federal Reserve is expected to keep interest rates steady and Singaporean rates closely follow those. 

Singapore's property landscape is unique. You’ll be navigating tight regulations and potential competition, while aspiring buyers should grasp the intricacies of HDB eligibility, especially regarding Permanent Residency. With cooling measures and property taxes in play, in-depth research and perhaps expert consultation are advisable. Whether renting or buying in Singapore, it's essential to make an informed choice aligned with your financial and lifestyle objectives.