Why Some Singaporeans Should Hold Off Buying A Home – Even With Grants

“Just because you can, doesn’t mean you should.” That saying doesn’t have to mean surrendering your plans; it can also be about patience. 

I’m reminded of it after Budget 2025 – one of the big changes is enhanced support for the Fresh Start Housing Scheme. Eligible families will now get up to $75,000 in grants to buy 2-room or 3-room flats on shorter leases (up from the previous amount of $50,000).

Also, the scheme will now extend to first-timers as well, who are trying to move from public rental flats to their own 2 or 3-room shorter lease flats. 

Now I’m fully in support of measures like this. If anything, I feel we should be going further, especially given the rising cost of living after Covid. 

But I’m also hoping these moves are complemented by proper help and counselling; because in my experience, buying a property (even an HDB flat) is quite unforgiving of mistakes. 

It’s not just about having sufficient grants for the flat. It’s about covering the cost of renovation and furnishing, and about the impact on cash flow. 

Families who are trying to move out of rental flats are usually facing huge challenges, the likes of which the average Singaporean may never understand.

I feel flat prices can be a strain even with two working adults. I can’t imagine how much worse it gets for a single parent, or a mature-age homeowner who is suddenly widowed. The same goes for those dealing with ongoing medical costs, or who are dealing with the million-odd strokes of bad luck that can seem to happen any second.

But these are the same people who are most likely to be in rental flats, and have yet to start being homeowners. So here’s the thing: there could be a maximum grant of $75,000, there could be flats that are only $100,000*, and there may even be further help on top of that. 

But if you’re in a position where you’re earning $2,000 a month or less, and have mouths to feed (or medical bills to pay), it still may not be the right time for home ownership. 

In the long run, home ownership can definitely provide security, and it’s something to aim for. But when you’re financially tight, immediate needs have a special kind of precedence. 

If you’re down to the last 80 cents in your bank account and don’t know if you can eat lunch today, the idea of being a homeowner means very little. What will you tell the guy at the minimart, when buying your rice or eggs? “I don’t have money, but I’m only $50,000 away from a fully paid up flat?” 

In these cases one may be better off staying in a rental flat for longer, and saving up more, before making the move to home ownership; even if the new higher grants allow it, or if they can now do it as a first-timer. 

*Yes, this really is possible for some smaller, shorter-lease flats

It reminds me of an incident back in 2012

Back then, there was a lot of online controversy over a statement that you could own an HDB flat, even on an income of $1,000 a month. 

I don’t know if that’s possible now but way back then, on another website, I showed the numbers that proved it wasn’t a lie. You could have bought a flat on that income. But that same year, I also made the same statement: just because you can, doesn’t mean you should.

I maintain it’s a terrible idea for a person making $1,000 a month to try and buy a flat when the rental options are far more manageable. Pretty much the same reasoning applies here, to Fresh Start housing. 

Singaporeans are culturally inclined to own our homes; I’ve even met some who feel ashamed not to. Some of them buy just to feel on par with others, even if it leaves them counting every cent needed for bus fare.

So whilst it’s great that we have increased support for home ownership, I do hope this is coupled with better support for the resulting expenses (i.e., a temporary increase in vouchers and rebates, for the first two to three years of home ownership). 

It would be especially painful for someone to secure a home after years in a rental flat, only for them to lose it again because they moved too fast, and it proved unsustainable. 

PS: This is also the reason I don’t think our HDB loan rates should be 2.6 per cent across the board and should be varied based on income. Lower-income households would have their lives much improved, if their home loan rates were below the prevailing CPF interest rate. But that’s a whole other rant. 

Meanwhile in other property news…

• Look up the other details of Budget 2025 and how it might matter to the real estate market. 
• Golden Mile used to be famous for its Thai discos, minimarts, and Mookata. But can a high-end, $2,750 psf(!) really recapture the vitality of the place? Check out the Aurea, which is upcoming. 
• How would you renovate a 4-room flat, if you have a big family with three children? Here are some ways you could make it work. 

• A freehold landed estate is a dream for many, by which I mean the mortgage banker and the agent that gets the commissions. But in all seriousness, it’s still possible from $3.8 million and up (ouch). 
• It’s said the sign of masterful architecture is the seamless blending of spaces, even between outdoor and indoor spaces. To me, that means a tropical scenery without losing the air-con (and losing the mosquitoes). Here’s how one talented architect managed it.

Weekly Sales Roundup (10 February – 16 February)

Top 5 Most Expensive New Sales (By Project)

Top 5 Cheapest New Sales (By Project)

Top 5 Most Expensive Resale

Top 5 Cheapest Resale

Top 5 Biggest Winners

Top 5 Biggest Losers

Transaction Breakdown

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