Recently I have been looking at residential properties in Singapore. Buying an apartment in Singapore has proven to be more stressful than I would have expected. I suppose I’m asking for high cost, looking at relatively new properties in the city center area – but who would have thought that USD 800k would be a justifiable price for a 2 bedroom apartment of 1,262 square feet (with only 950 feet of actual usable area)? I could buy a few houses back in the suburbs of Orlando for that amount!
Anyway, I’ve found these resources to be quite helpful while evaluating properties:
SingaporeExpats.com – this site has pictures, descriptions, and addresses for most properties in Singapore. You can also search their listings to find out what is for sale / rent. It gives you a good idea what amount people are asking for in the market.
It amuses me that in Singapore people are very willing to plonk down a huge amount of money for a condo unit that they may never have seen. My realtor has taken me numerous times to empty construction sites, describing what the property will eventually look like (mind you, there isn’t even a showflat set up for the place), and then actually expects me to say, “Hey! Wow, it sounds great, let me go ahead and start paying the mortgage for 1.5 years before the building will be completed.”
Apparently I’m in the minority.
I digress. Here’s another resource.
Private Residential Property Transactions – The Urban Redevelopment Authority site allows you to search on recent transactions for properties in Singapore. So, for example, if the owner of the Calarasi condo says he’ll sell you a 3 bedroom condo for 1.25 million sgd, you can go to this site and see that the most recent transacted price, in March ’07, was for 705,000 sgd and tell him that you understand the property market is at an high here but you don’t appreciate getting gouged. Arm yourself with information! The owners are out to screw you, the realtors are out to screw you, the bankers are out to screw you. Keep that in mind. Well, I did talk to one condo owner who was very honest and told me that their rental yield would not be that high… I appreciated their candor. Subsequently I crossed that property off my list of places to examine further.
Skyscrapercity.com – This is a forum to discuss completed buildings as well as upcoming construction projects. Lots of the folks on the forum are very passionate and it’s interesting to see their opinion on projects. Good comparisons and nuggets of information here, as well as pictures and updates of construction sites. There are forums for buildings in different countries as well, not just Singapore.
Home Loan Calculator – This will give you a rough idea of what kind of monthly mortgage payment you will have. Specific to the Singapore market. I haven’t gone to get an official home loan yet so I can’t vouch for the accuracy of it, but it does help give guidance.
Snippets of info:
– If you are using the property as an investment property (i.e. renting it out to someone else), you pay property tax of 10% of the annual value. If you live in the property, you pay property tax of 4% of the annual value of the property. Annual value is determined by what the government assesses as the going monthly rental rate. So if the government thinks you can rent out your property for 3,000 sgd a month, the annual value is 36,000 sgd.
– Property tax and mortgage interest are tax-deductible for an investment property.They are not deductible if you are living in the property. Learn more about Singapore property tax.
– Stamp Duty. Don’t forget, after purchasing the place you’ll need to pay about 3% of the purchase price for stamp duty.
– List of Rental expenses that are deductible for an investment property
I liked this article – Renting vs. Buying. It seems to be common belief that we should always buy instead of rent, but perhaps that isn’t the case.