The Highs and Lows of Buying a Flat in Singapore

First things first, this post is not meant to be controversial or debatable, it is more of a rant of our experience as Singaporeans trying to make Singapore home and how the flat buying process is counter-productive to family building values. I have many friends and family members who also feel the same way and it is either a source of frustration for this group of people or some would just accept it as their fate.

Recently we finally managed to secure our almost-dream home in Singapore. We have been essentially homeless for 6 years, living with my husband’s parents, which is nice but it still felt like we are missing a big part of family building. So when we got our flat application approved after failing 4 times (application is about once every 6 months), we were naturally elated, so happy in fact that it was almost felt as if we won some kind of million dollar jackpot, except in this case, HDB is the ultimate winner.

 

 
Marring our high spirits though, were a few practical and monetary matters. It is hard to feel happy when you know that soon you will be in a debt and have to pay over half-a-million dollars of your hard-earned money into your house. At the same time, a house is somewhat of a necessity and a foundation to a family unit so perhaps the investment would be worth it? Speaking of investments…

1. Property as a Sure-Fire Money-Making Scheme: 

As Singaporeans, we all know one thing: If you are getting married, make sure you apply a HDB from the government and take full advantage of the “subsidy” given by the government. Most of us call it free money. However the reality is that many first time home buyers would not get their property on first try, as there is simply not enough houses to go around. Applying for a “resale” flat however is not encouraged as you will “lose out” on the free profit you could make from your first home. Which brings me to the first item we had a issue with: Our soon-to-be-ready 4-room, mid-level flat in Clementi was $589,000, almost $600 per square foot. Based on the median income of young families in Singapore, the rising costs of HDBs seem to be a hefty sum, and young couples are taking longer and longer termed loans, up to 30 years and at one time, 50 years. Whatever subsidy the government is giving new first-time homeowners has not taken into consideration the constant rising value of flats in a surging economy, i.e, the value of flats are rising but their subsidy still remains the same.

Many of us are brought up to think that all the money put into some bricks and concrete will be worth it especially since property is an “investment” which will definitely gain in value over time. However the same people did not consider that, in the short history of Singapore, property values are not always on the rise and there were a few times when it dropped and owners had to make a loss. In the long-term though, it did rise many times over, but so also did the overall cost of living. In other words, the rise in HDB prices is closely related to inflation. At best, it can be considered a hedge; a slowly growing form of savings. Yet some others will use their first HDB as a stepping stone to “upgrading” to a condominium or private property. Again, they are not making profit from doing this, but just minimising their losses. So the property from HDB cannot and should not be considered as a great money-making tool as it does not make you money.

The only way to make a profit out of property here in Singapore is to own two of them. As the government is unwilling to subsidise you twice for a property, you have option of buying another private property after you have bought one government flat. Sounds fair, but not many of us can already afford one property in Singapore, much less two.

As Singaporeans who are not intending to use a property to earn money, we are stuck without much choice with buying a really expensive (and overpriced) little home while trying to form a family if we were to want to live in “safe and prosperous” Singapore. In return, by putting most of our resources into a house  leaves little room for others.

2. Counter-productive to Pro-family Values

The rising costs and highly stressful society in Singapore is a contributing factor to family building in Singapore. It is not surprising that Singapore has one of the lowest birth rates in the world. New couples get married later as they do not get their own place until at least 3 years after applying their new flat from HDB. It is not that people aren’t getting married, but they are not having as many children as before. They are paying forward for the flat and waiting for it to be built, even if they are not actually living in it. Other couples choose to then either delay their marriage until they get their home, or temporarily live with their parents and yet-to-be-married siblings (if there is space).

   

 To compound the problems further, they have to delay their family expansion plans until they get a proper place to live and until their finances are more stable having paid so much for the house. Considering the high cost of property and living in Singapore, the stress of providing for the future of their children on young parents are usually very high. 

It is difficult for our generation to even get a place to call home in Singapore if you are not earning loads of money and it will get even worse for them when it is time for our children to form a family. Sometimes I just think that there is more to life than just working in a tiny office nearly most of your life in order to pay off your tiny house. I’m not sure this is what I want for my daughter because I don’t like it much myself.

I just hope that when we Singaporeans, when chasing the dream, do not forget to make a life. Perhaps sticking to this positive mindset will make living in Singapore much easier.