In relation to my earlier article “EXPATS fleeing Singapore as rents go through the roof“, for those expats that chose to continue to live in Singapore and want to reduce their cost of living, there are some ways to so:
1. Expats (including some Singaporeans or PRs who are renting), may have considered buying their own place versus renting as they are roughly spending the same amount of money for rent. Let’s take a look at some numbers six (6) months ago: (Note: results may differ at different time point and development).
A resale typical 2-bedroom unit (between 900 -1000 square feet) in Costa Rhu (Tanjong Rhu area), which is popular with expats and PRs data from Urban Redevelopment Authority of Singapore (“URA”).
For a unit, the recorded Transacted Price in October 2022 – SGD1,488,000. Assume that 75% is using mortgage loan (SGD1,116,000) and Fixed Mortgage Rate of 3.5% used (reference from Small Cap Asia), the monthly payment is SGD4,612.32 (calculated from moneysense).
Similarly for the same size and condo, the recorded Transacted Monthly Rental in October 2022 is SGD4,600. Excluding other costs, e.g. stamp duties, the Monthly Mortgage and Monthly Rental are on par.
For those renting especially first time Singaporean buyers*, there was a strong incentive to buy as there is no additional buyers stamp duty (“ABSD”). As first-time buyers, Permanent Residents (“PRs”) may consider buying for the long term even though the ABSD is 5% and owning a property as part of an investment. For expats who are categorized as foreigners, would likely continue to rent as the ABSD is high (30%). *Also to note is that under the respective Free Trade Agreements, Nationals and Permanent Residents of Iceland, Liechtenstein, Norway, Switzerland and the United States of America are accorded the same Stamp Duty treatment as Singapore Citizens.
In recent months with the anticipation of the Ultra High Networth Individuals/Families may come to Singapore and buy up multiple properties that may cause an unusually hike/speculation in property prices, the Singapore Government announced the latest measures to cool down the property market. For first time buyers especially Singaporeans and PRs, there is not change in the ABSD. However, as mentioned in my earlier article, we should expect some cooling of the property rentals by the end of 2023.
Despite the recent cooling measure, a Chinese buyer picked up four (4) units of Blossoms By the Park during a property launch a few days after the announcement of the cooling measure. Thus, we shall see if this cooling measure works or will there another down the road?
2. For those who wish to apply for PR or Singapore Citizenship so that the ABSD impact can be lower,ed before purchae, you can refer to the following information sites:
- Becoming a Permanent Resident – ICA | Becoming a Permanent Resident
- Becoming a Singapore Citizen – ICA | Becoming a Singapore Citizen
3. The other option for PRs and Foreigners is to consider renting HDB units, which are relatively cheaper. For example, monthly rentals for 2-bedroom HDB units ranged around SGD3,100 to SGD4,000. HDBs are found mostly in the heartlands and are suitable for people who do not require condo facilities such as swimming pool, gym, tennis courts, etc. Another reason is the Internation Schools are found in such heartlands, for example:
- Stamford American International School – Located in Woodleigh
- Australian International School – Located in Lor Chuan
- International French School – Located in Ang Mo Kio
- Canadian International School – Located in Jurong West
- Global Indian International School – Located in Punggol
There has been a small trend of expats slowing moving to the heartlands where they experience how local Singaporeans live. I have watched a few YouTube and TikTok videos posted by these expats who made such decisions which I’m happy to share below.
@chiaciek – Chiaciek (@chiaciek) | TikTok/ jemi.so/chiaciek
#MaxChernov – (51) The Reality of Moving to Singapore for a British Expat – YouTube
Credit to:
- SMALLCAPASIA – How much will mortgage rates go up in 2022 in Singapore? – SmallCapAsia
- Moneysense Mortgage calculator – Mortgage Calculator (moneysense.gov.sg)
- Urban Redevelopment Authority of Singapore private property transacted data
- MAS – Measures for a Sustainable Property Market (mas.gov.sg)
- Inland Revenue Authority of Singapore – IRAS | Foreigners Eligible for ABSD Remission under Free Trade Agreements (FTAs)
- Business Times – Blossoms By The Park: China buyers pick up 4 units despite doubling in foreigner ABSD rate to 60%, Property – THE BUSINESS TIMES
- Immigration & Checkpoints Authority (“ICA”)
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