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How to Decide on Renting or Purchasing Property in Singapore

There is no one-size-fits-all approach to housing!

  • Many factors determine whether you rent or buy a home, including affordability, eligibility, future plans, and level of commitment. 
  • According to experts, you should not be spending more than 30-40% of your monthly income on housing.
  • When calculating whether you can afford a type of housing or not, consider upfront and ongoing costs.

Affording your own place to live, whether that be to rent or buy, is a financial goal for most. The conditions we live in, how affordable our house is, and the pressure to own property contribute to our wellbeing. This article will give you a good insight into public and private housing in Singapore, the process of buying a property, and cover the renting vs owning property debate.

Renting vs buying a home

There is no straightforward answer when choosing between renting or buying a home. In our opinion, your best bet is to use the knowledge presented in this article to come to a sensible conclusion. Here’s a quick overview of the key differences between the two options. 

The key differences between buying and renting a house

Public Housing in Singapore (HDB)

The Housing and Development Board (HDB) manages Singapore's public housing under 99-year leases. It would not be far-fetched to claim that Singapore has the best public housing in the world. It’s the most popular mode of housing residents, with 77% of Singapore’s population living under it. Unlike in many other areas of the world, public housing here is part of thriving, well-maintained communities. Public housing is not a homogenous product, as HDB flats come in various sizes and layouts. 

Process for buying a new HDB flat

Process of buying a new HDB flat

Private Housing 

Private housing complements the widespread public housing to provide another option for Singapore residents. This type of housing includes condominiums and landed property. Unlike public housing, private property owners can be the freeholder of the land. 

Are you budgeting well enough to afford a home? 

To help decide whether to purchase or rent a property, take a step back and reassess your financial health. Ask yourself, do you have an emergency fund established? Are you on track to hit your financial goals? Are you free of debt that requires immediate attention? If you’re in a sticky situation, it’s probably best to avoid purchasing a property soon. The OCBC Financial Wellness Index 2022 found that 40% of Singaporeans have problems paying their housing loans on time (amongst those with housing loans), indicating that too many are taking on housing they cannot afford.  

This is where budgeting becomes essential. Those who follow a sensible budgeting scheme, e.g. the ‘pay yourself first’ method, will be able to easily declare how much they can set aside on housing per month. There are many different housing costs involved, including upfront and futures costs, that you must be prepared for. 

Housing experts suggest that homeowners or tenants should not be spending more than 30-40% of their total monthly income on housing to have money available for other essential needs such as food and transportation. Furthermore, the choice of property ought to fit the needs of your family’s present and future life goals. 



  7. Header photo from Pexels
Content is intended to be used and must be used for informational purposes only and should not be relied upon as financial or other professional advice.