Singapore is Asia’s financial heart, home to many global firms - and therefore many expats. As a developed, global city with a mixed, tolerant and vibrant community - and all the amenities you could possibly need - it’s a fantastic place for a foreigner to settle. However, this utopia doesn’t come cheap. It’s also among the most expensive places in the world to live.
If you’re thinking of moving here to live, work, start a business or retire, then it’s good to know the likely cost of living in Singapore. Where you choose a home is an important factor, as prices vary enormously between districts and specific developments, depending on the level of luxury you want to buy into. Accommodation anywhere, however, is pretty pricey.
Despite the costs, Singapore remains a popular place for global businesses, and individuals, to invest. This is because it’s a well regulated, stable economy in a perfect location to access the rest of Asia and the world.
If you’re moving to Singapore for the long term, then buying a home there might make sense. There are some restrictions on what properties expats can buy, so you’ll need to know a bit about how the process of buying a place in Singapore as an expat will work. Here’s a quick guide.
Singapore’s property market shot up a few years ago, with residential home prices hitting highs of 38.2% up year on year to Q2 2010. Fearing the impact of this overheated market, the authorities took actions to bring prices down, including making it more difficult to get a mortgage, and increasing stamp duty on purchases. These measures certainly cooled the market - albeit with some dramatic swings on the way.
Prices in the centre of Singapore fell by 1.8% in the year to Q1 2016, with price falls slowing from a drop of over 3% in the year to 2015. As the property market is quite heavily regulated in Singapore it's likely that changes to prices will reflect the economy, which is expected to grow at a steady rate over the coming years.
In general terms, Singapore’s stability in the Asian region means it's considered a safe place to invest in property, even if returns aren't huge.
There are restrictions as to what property expats in Singapore can buy, which you need to understand thoroughly if you want to buy a home there. Under the Residential Property Act, foreigners can buy condos without prior government approval, but only in buildings of less than six stories. It's more difficult to buy land, however.
There are other restrictions in place such as on foreign exchange, so it's crucial to have local expert advice when you buy a Singapore property.
If you’re thinking of buying a property in Singapore, the price you pay will be influenced significantly by where you want to live. You’ll get more for your money if you’re prepared to have a bit of a commute into the city centre.
All property in Singapore comes at a premium - although you’ll find housing stock at a wide range of sizes and levels of luxury.
|Singapore City Centre||Average purchase cost|
|120 m2 condo||$1,649,760|
Average house prices of course, hide the variations between neighbourhoods (and even individual streets and developments). For example, the price per square meter of a flat in Tanglin Halt or China Square is more or less double that of prices in the further out areas such as Yunnan or Jelebu. You can research the recent selling prices of properties in the development you’re interested in online to get the latest details and make an informed decision.
There are several avenues you can take to find a property in Singapore, however, you’re strongly recommended to use a local property agent you can trust. Although it’s possible to manage without, around 75% of home buyers in Singapore, including locals, use an agent.
Buying a property can be complicated, particularly for an expat, as there are restrictions on the way that foreigners can buy both land and property. This means it’s easy enough to fall foul of scams and pitfalls.
This is another good reason to have an agent on your side. Although there will be a fee to pay for this service, they'll help you with avoiding costly mistakes, and might be able to negotiate with the seller better than you can alone.
Even if you don’t choose a specialist buying agent to help you with your purchase, you’ll have to pay towards the fees levied by the main agent selling the property. Usually this means you’ll pay a fee of 1% of the purchase price, while the seller will pay the rest.
The best way to get a head start on finding a place to buy in Singapore is to look online. Great websites to find a house or apartment to buy include:
- Property Guru: Helpful search page and lots of choice covering the whole area
- iproperty: This website has an impressive advanced search allowing you to search based on the location of public transportation stops and stations
- Savills: Global brand with a large stock of homes advertised - likely to be higher price points
Singapore has a well developed real estate sector, although as a highly urbanised area, there's a pressure on living space in many areas. You'll have a wide choice of apartments, or flats in built up areas and cities, with houses and villas more readily available in newer developments in the suburbs, and, for example, in some exclusive beachside developments.
As a foreigner you’re free to buy a condo subject to certain restrictions, but cannot buy land.
It’s a smart idea, though not required by law, to get a survey done on any property you choose before you commit to buying it. Your lawyer can help you find a surveyor who knows the area well.
When you're buying a property in Singapore you'll need to take proper legal advice from a qualified local lawyer. You’ll need to:
- Decide which mortgages might suit you, and get an offer in principle so you have a budget in mind
- Find a local property lawyer who you trust
- Select the property you want to buy
- Make an offer the seller agrees to
- Go back to the bank and finalise the mortgage
- The lawyer will draw up the option, confirm the property ownership and that it can be legally sold
- Pay the 1% optional fee to reserve the property
- Pay the remaining deposit within the next 14 days to move on with the process
- The lawyer will prepare the documents transferring title of the property, which are signed by buyer and seller
- The lawyer will then arrange documents transferring the title of the property, and ensure the sale is registered properly
If you’re buying a property in Singapore, it’s important to have a local qualified lawyer to help you. The lawyer has an important role drawing up the contracts, performing searches to confirm details of the property and its ownership and making sure the property won't imminently be affected by any major infrastructure projects. The lawyer is also responsible for due diligence checks on the seller, which can ensure you’re not victim of a scam.
Assuming you don’t have the cash upfront (and with house prices sky high, this is likely), you’ll need to arrange a mortgage for your new home in Singapore. Luckily, Singapore has a developed banking sector. and you have a good choice of local and global banking brands to choose from when it comes to opening a bank account and arranging a mortgage.
UOB (United Overseas Bank) is one of Singapore’s biggest banks and offers mortgages specifically for foreigners. The Development Bank of Singapore is the largest bank in Singapore with more than four million customers in Singapore alone. As they offer specific banking services tailored to Singapore’s expat community, they’re well worth a look, too.
It’s also worth checking if your home bank has a local presence. If so you might get a better deal with them. Wherever you choose, check the small print as each product will differ slightly from the next.
When you have chosen the mortgage product that works best for you, you’ll need to make your application. Typically this will mean that you have to arrange a stack of paperwork, and visit the bank in person to get approval. Each bank will operate slightly differently, so call your local branch to check if you need to make an appointment in advance.
It’s worth getting a mortgage agreement in principle before you go on too far with your property search, as this will give you a more solid idea of what you can afford.
Usually you'll pay an ‘option fee’, when you agree to buy a home, which is a 1% deposit, and means that you reserve the right to buy the property for two weeks. During this two week period you must pay a further 9% to complete your deposit payment.
If you’re not yet in Singapore, you might have to pay your deposit from abroad. This will mean making an international money transfer to cover the deposit amount. If you’re transferring a large amount of money across currencies, it’s important you get the best deal available. One smart option is to get a Borderless account from TransferWise. With this, you can hold 15 different currencies all in one account (including GBP, USD and EUR). It’s like having a local bank account which you can use to pay like a local, wherever you need it. And if you need to, you only pay a small flat charge to transfer money from one currency to another, and with TransferWise you’ll always get the real exchange rate.
Both buying and selling property in Singapore is expensive. Once you add up all of the fees you’ll have to pay as a buyer, you can expect to add from 7-16% of the property price onto your bill. The seller is also responsible for payments relating to their portion of stamp duty, legal fees and estate agents costs. Fees and taxes as the buyer include:
- Buyer stamp duty: 1-3% on a sliding scale depending on the property value
- Additional buyer stamp duty: 5-15%, with the top rate applied to foreign buyers
- Legal fees: 0.3% of property sale price
- Registration fee: $52 (priced in USD)
- Real estate agent fee: 1%
Buying a property is a big and exciting step, but navigating the system in a new country can be a challenge. Luckily, buying your dream home in Singapore should be fairly straight forward if you follow these steps, and source the right local help if you need it.
Good luck with finding, buying and settling into your new home in Singapore.
Need to pay property tax in Ireland? Read our guide for an overview of property tax in [country] and how TransferWise may be able to help.
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