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Friday, 25 January 2019

An overview of the different property pricing in Singapore

Ummul Azkee










An overview of the different property pricing in Singapore



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With so many properties available in Singapore, such as Jurong West, Punggol and so on, choosing a location requires much consideration. There are many different types of property in Singapore that you could check out on, such as BTO flats, HDB resale flats, condominiums, serviced apartments and landed properties. Are you planning to buy a property in Singapore but you are unsure of the property pricing in Singapore? Different properties come with different price tags. A HDB resale price will definitely be cheaper than the price of a condominium unit. Fret not, this article will give you an overview of the different property pricing in Singapore.

Assuming the average price for a condominium is $1.2 million, the buyer will then have to secure a bank loan of $960,000, where 5% must be in a form of cash. The monthly housing loan for a 25 years loan tenure will cost approximately $4,1000 a month after paying $60,000 minimum cash down.

As for HDB resale flats, it will only cost approximately $2,400 a month where the minimum cash down would be only $35,000 as to buying a condominium with which costs $60,000.
There are some important fees that you will need to take into account if you plan to buy a resale HDB flat, such as:


1. Grant of option
Also known as the booking fee, this will cost approximately $1,000 and it has to be paid by cash.


1. Valuation fee
The valuation fee varies depending on the size of the flat. The valuation fees for a 1 bedroom or 2 bedrooms flat will cost $140.40 whereas the valuation fees for a 3 bedrooms or bigger flat will cost $199.25.


1. Deposit
The payment for deposit will have to be done within 21 days and it costs approximately $4,000 to $4,999.


1. Application fee
The application fee for a 1 bedroom flat or a 2 bedrooms flat cost $40 whereas the application fee for a 3 bedrooms or bigger flat will cost $80.


1. Initial payment
The initial payment for the resale HDB flat will be a 10% of the purchase price if the buyer is under a HDB loan and using his or her CPF.

The initial payment for a resale HDB flat will be 20% of the purchase price if the buyer is using a bank loan instead.


1. Stamp duty
You are required to pay for stamp duty if you buy a new HDB flat. Stamp duty is calculated based on the selling price of the HDB flat:

First $180,000: 1%
Next $180,000: 2%

Remaining amount: 3%


1. Additional Buyer’s Stamp Duty
Certain home buyers will need to pay for the Additional Buyer’s Stamp Duty (ABSD) on top of the Basic Stamp Duty:

Buyer

ABSD Rate
Singapore Citizen
1st property
NIL
2nd property
7%
3rd property and above
10%
Singapore Permanent Resident
1st property
5%
2nd property and above
10%
Foreigner

15%

Let us say if the property is bought by both Singapore Permanent Citizen and Singapore Citizen, the ABSD rate will then be higher.


1. Conveyance legal fees
The conveyancing fee cover costs such as the registration of land titles and deeds. The amount payable is as below:

1st $30,000: $13.50 per $100
2nd #30,000: $10.80 per $100
Remainder: $0.09 per $100

As for the legal fees, it will cost $2,300.


1. Caveat registration fees
The caveat registration fee is payable when you sign the Agreement for Lease and it would cost $64.45.


1. Registration fees
The registration fee for both the leave in-escrow and mortgage in-escrow is $38.30.


1. Title search fees
The title search fees are $10.40.


1. Home protection scheme
The fees for home protection scheme varies depending on the loan amount, type of loan, duration of loan and gender. You could also check out more on the home protection scheme available online.


1.  
Fire insurance
The HDB Fire Insurance Scheme is introduced to help with financial burden in case of any unfortunate event of fire. The price for the insurance will start from $1.50 for a 1 bedroom flat to $7.50 for a multi generation flat. This insurance is valid for 5 years and renewal is to be done once every 5 years.


2.  Balance of purchase price
Lastly, you will have to pay off the balance of the purchase price for your property.

Let us use an example to understand it better. A newlywed Singaporean couple in their 20s. Both of them have a combined monthly income of $6,000 every month and they are looking to buy a 3 bedrooms resale HDB flat that costs $400,000. They both have a total of $20,000 in their respective CPF accounts and are qualified for a Family grant with a total of $30,000.
They have also decided to engage with HDB loan that covers 90% of the property purchase price with a loan tenure of 25 years. In addition, they will also need to pay $1,000 as their Booking Fee for the Option. The remaining loan instalments will be paid by using the CPF amount in their accounts.

Fee Payable
Price
Grant of option
$1,000
Valuation fee
$199.25
Deposit
$4,000
Application fee
$80
Initial payment
$40,000
Stamp duty on option
$6,600
Stamp duty on mortgage
$500
Conveyancing fee
$1,009.01
Lease in-escrow
$38.30
Mortgage in-escrow
$38.30
Caveat registration fees
$128.90
Title search fees
$10.40
Home protection scheme
$241.56
Fire insurance
$4.50
Balance of purchase price
$355,000
Total
$408,850.22

Based on the costs that I have listed above, the total amount that they will have to pay would be $3850.22 if they decide to use an HDB loan.
HDB loan: $355,000
CPF: $50,000
Cash: $3,850.22

If they are using a bank loan, they will be entitled for a 80% bank loan for the total purchase price. In addition, they will have to pay $2,500 for external lawyer services.
Fee Payable
Price
Grant of option
$1,000
Valuation fee
$199.25
Deposit
$4,000
Application fee
$80
Initial payment
$20,000
Stamp duty on option
$6,600
Stamp duty on mortgage
$500
Legal fees
$2,500
Home protection scheme
$241.56
Balance of purchase price
$315,000
Total
$410,120.81

Based on the costs breakdown above, their final obligation will be $45,120.81 if they use a bank loan.
HDB loan: $315,000
CPF: $50,000
Cash: $3,850.22

In conclusion, do prepare ahead and plan a realistic budget before you make a decision to buy a property. After all, it is a huge commitment that involves a huge sum of money. You definitely do not want to get into a financial debt after purchasing your first property in Singapore.

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