A reason is that the majority of Singaporeans continue to live with their parents until they’re married.
The rental market is just another story while over-35s and couples can benefit from government grants to purchase HDB flats. The cost of leasing the cheapest possible one bedroom condo unit in Singapore in a place as far flung as Bukit Panjang can cost around $1,500 per month, and when you get closer to the city fringe it’s possible to wind up paying 50% to 100% greater.
However, rents have been falling steadily in Singapore, and over the past year many expats and tenants have hopped to various units in the very same condos they’ve been leasing at as a way to knock a couple hundred dollars off their lease.
This is fantastic news for Singaporeans who want to move from the parents’ houses so that their mums can stop checking their Whatsapp messages, but who do not have sufficient money to buy their particular place yet. But is this financially prudent? Assuming you don’t have any family house you can fall back on for accommodation, here’s a comparison between the benefits of purchasing and renting.
Pros of renting
Lighter financial commitment
Just because everybody else gets balloted for an HDB flat doesn’t mean you should. Purchasing is a very big financial commitment that wind up paying for all their lives. I have got friends whose 65 year old parents are paying for that mortgage on their HDB apartments.
Renting can involve hardship that is less as you don’t have to cough up the cash for a downpayment, and you’re not chained to a mortgage for the remainder of your life. Your deposit is very likely to be two or one weeks’ rent which sure beats paying a $50,000 downpayment.
Additionally, a recently established product named Cardup now allows you to actually benefit from paying your rent, by letting you pay your rent with your credit card. This changes the match in regards to accruing things. You can read our review on the service here.
For Singaporeans with families they can fall back on, not being tied into a mortgage also means that if you encounter hard times, you can move back home. If that’s not feasible, you have the option of downgrading to a smaller place or shareflat.