Unconventional Tactics Some Singaporeans Use To Save Money When Buying Property

Published 21 July 2024, 2:23 PM SGT · 6 min read · 545

Could you possibly spend $0 on renovations?

That was my question to a friend of mine, who just bought a resale flat. This isn’t a new flat either: we’re talking 1970-something construction, and there's still a squat toilet. Usually with a flat this old, you expect any savings from lease decay to be swallowed up by a scary Interior Design bill. But as a sign of the times, my friend has done nothing but refurnish: new tables, chairs, beds, etc.

But all of the old renovation, from cupboards with slightly peeling edges, to the occasional missing tile, is still as it was - likely from a renovation that was over a decade or two ago. But his reason for keeping it that way?

The first would be avoiding the reno loan.

He detests the idea of owning money, and taking a home loan was a big enough shock to the system. So rather than add another few thousand dollars a month in debt, he’s content to live with the conditions for the next few years, until he can renovate with just cash.

The other reason is that he has a planned holding period: five years at best, and 10 years at most. This isn’t unique to him; and as resale prices and renovation costs go up, I come across it increasingly often: homeowners who don’t go beyond bare maintenance because - I quote - “This is the government’s house, don’t spend too much money to make it nice.”

Which shows a stark divide in how Singaporeans think of their flats

On one side, you have those who, despite all arguments the government may put out, think of HDB flats as being not-really-theirs.

These are the people who point out that the form you sign when getting your flat says “lessee,” or that 99-year leaseholds and eligibility criteria aren’t “true” ownership.

For this batch, they’re often driven to make the jump to private property (especially freehold private property), and they tend to see their flat as just a stepping stone. And they are, rather ironically, more appreciative of existing renovations. One strategy among them, like my buddy’s, is to look for a resale flat with renovations they can tolerate for just five years.

On the other side, you have the “pure” home buyers who see their flat as a home forever. This batch tends to ignore the value of renovations altogether. I’ve seen them tear down renovations that are only two or three years old, even if it was by top-end design firms. The reason is that, because they see it as their own space, it’s vital to have it reflect their own character and lifestyle - and they’ll splurge on renovations if they have to, because they often intend to live out their lives (or most of their lives) there.

It’s definitely something for sellers to think about: knowing which group your prospective buyer falls into gives you a sense of how much to emphasise your renovations.

On the same topic of savings, here are a couple of ways we’re seeing people save on their home purchases. Some of them are old, but have come back into prominence lately:

Want to live in a hotspot like Bishan, Holland V, Paya Lebar, etc.? Rather than scout out that exact location, move one MRT stop away and check in the neighbouring area instead. The price difference between Aljunied and Paya Lebar, or Eunos and Paya Lebar, can be significant - but the travel time often isn’t.

Start cycling. A 20-minute walk to the MRT station can be halved to 10 minutes, or sometimes even less, when you get on a bicycle. The ever-rising number of park connectors helps with this too. And once you move 20+ minutes from the MRT station on foot, you’ll find properties start to get quite a lot cheaper.

On a similar note, check the bus routes more carefully. My favourite example of this is Normanton Park. It looks far from any MRT station on the map - but I frequented this area very often, and it’s absurdly easy to get from Normanton Park to Fusionopolis; just take a bus from outside the condo. You’ll be at the One-North MRT station, along with a supermarket, restaurants, offices, etc. in minutes.

Pick the cheaper bank loan even if it has a longer lock-in period. Sounds crazy right? But here’s the thing: if you’re not the sort who likes checking on interest rates and refinancing, talking to mortgage brokers, etc. then the lock-in isn’t really a drawback, since you don’t intend to refinance for a long time anyway. Also, as some mortgage brokers will tell you, interest rates seem unlikely to dip significantly in the near future, as they’ve just come out from historical lows for almost a decade.

Buy the unit that doesn’t have the best view. If you’re the sort who mainly keeps your curtains drawn, or you work in the office and only come home when it’s all dark, is it really worth paying the premium for a greenery view? The premium might be enough to pay a few months of your mortgage or get a bigger space.

Meanwhile in other property news…

Need a spacious three-bedder (above 1,700 sq.ft.) for under $2 million? Here’s where to start looking.
Should you buy a new or resale one-bedder, if your main concern is gains? We took a look at the numbers.
Subsale offers can be tempting, but do you really make more if you sell your condo unit before it’s built? Here’s the reality of it.
So all you need is the smallest and most affordable private home? Here are some of your options, and as a bonus, they’re freehold too (but beware, some are truly tiny).

Weekly Sales Roundup (08 July - 14 July)

The challenge for many buyers today isn't access to information.

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Over time, that's also why we decided to work with agents who shared the same data-driven and advisory-led approach behind our editorial, consultants who could help readers think through decisions more objectively, rather than simply push transactions.

Today, the team has worked with more than 2,000 clients across over $5B in property transactions.

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Top 5 Most Expensive New Sales (By Project)

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
MIDTOWN MODERN	$6,638,000	1808	$3,671	99 yrs (2019)
THE RESERVE RESIDENCES	$4,257,171	1625	$2,619	99 yrs (2021)
THE REEF AT KING'S DOCK	$3,709,000	1346	$2,757	99 yrs (2021)
THE CONTINUUM	$3,572,000	1249	$2,861	FH
TEMBUSU GRAND	$3,506,000	1432	$2,449	99 yrs (2022)

Top 5 Cheapest New Sales (By Project)

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
SORA	$1,230,000	538	$2,285	99 yrs
THE MYST	$1,234,000	517	$2,388	99 yrs (2023)
THE LAKEGARDEN RESIDENCES	$1,261,300	527	$2,391	99 yrs (2023)
TEMBUSU GRAND	$1,360,000	527	$2,579	99 yrs (2022)
GEMS VILLE	$1,473,120	797	$1,849	FH

Top 5 Most Expensive Resale

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
URBAN RESORT CONDOMINIUM	$6,280,000	2551	$2,462	FH
AALTO	$6,150,000	2443	$2,517	FH
PARVIS	$5,000,000	2013	$2,484	FH
THE SEAFRONT ON MEYER	$4,700,000	2099	$2,239	FH
TRILIGHT	$4,680,000	2110	$2,218	FH

Top 5 Cheapest Resale

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
SUITES@ KATONG	$680,000	388	$1,755	FH
HILLION RESIDENCES	$800,000	463	$1,728	99 yrs (2013)
RIVER ISLES	$810,000	517	$1,568	99 yrs (2012)
BOTANIQUE AT BARTLEY	$868,000	517	$1,680	99 yrs (2014)
MELVILLE PARK	$870,000	958	$908	99 yrs (1992)

Top 5 Biggest Winners

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	RETURNS	HOLDING PERIOD
PARVIS	$5,000,000	2013	$2,484	$2,015,000	15 Years
AALTO	$6,150,000	2443	$2,517	$1,986,000	14 Years
KENSINGTON PARK CONDOMINIUM	$2,650,000	1658	$1,599	$1,850,000	21 Years
THE WINDSOR	$2,400,000	1625	$1,477	$1,740,000	26 Years
VIVA	$4,050,000	1528	$2,650	$1,690,200	15 Years

Top 5 Biggest Losers

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	RETURNS	HOLDING PERIOD
ORCHARD SCOTTS	$3,900,000	2497	$1,562	-$1,643,340	15 Years
URBAN RESORT CONDOMINIUM	$6,280,000	2551	$2,462	-$1,360,300	13 Years
THE ASANA	$1,165,000	506	$2,303	-$198,864	7 Years
V ON SHENTON	$1,980,000	958	$2,067	-$44,700	9 Years
PINETREE HILL	$1,769,000	764	$2,315	$28,000	1 Year

Transaction Breakdown

At Stacked, we like to look beyond the headlines and surface-level numbers, and focus on how things play out in the real world.

If you'd like to discuss how this applies to your own circumstances, you can reach out for a one-to-one consultation here.

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Frequently asked questions

How can some Singaporeans save money when buying resale flats?

Some Singaporeans avoid renovation loans by keeping existing conditions and only refurnishing with cash. They also consider buying flats with minimal renovations or in areas slightly outside prime locations to save costs.

Why do some homeowners choose not to renovate their flats in Singapore?

Homeowners may avoid renovations to prevent taking on additional debt, especially if they plan to sell within a few years. They see their flats as temporary or as stepping stones, preferring to keep costs low.

What are the different attitudes towards flats among Singaporeans?

One group views flats as temporary and prefers minimal spending, while another sees their flats as lifelong homes and invests in renovations to reflect their character and lifestyle.

Are there cost-saving tips for buying property in Singapore?

Yes, some tips include moving one MRT stop away from hotspots, cycling or using buses for transportation, choosing units with less desirable views, and opting for loans with longer lock-in periods if suitable.

What should I consider when choosing a property based on views or location?

If you mainly keep curtains drawn or work outside, paying a premium for a greenery view may not be worth it. Instead, consider properties slightly away from prime areas for better prices and similar commute times.

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Ryan J. Ong

Partner at Stacked

A seasoned content strategist with over 17 years in the real estate and financial journalism sectors, Ryan has built a reputation for transforming complex industry jargon into accessible knowledge. With a track record of writing and editing for leading financial platforms and publications, Ryan’s expertise has been recognised across various media outlets. His role as a former content editor for 99.co and a co-host for CNA 938’s Open House programme underscores his commitment to providing valuable insights into the property market.