Singapore property prices have been increasing for more than 10 years. It is expected to go up in the coming future, especially with the recent news of Land Transport Authority (LTA) planning to buy back train operating assets and leasing them out to private-sector operators through public tenders. This plan aims at injecting competition into Singapore’s railway transport system, leading to lower fares and improved service levels. The rail industry will move towards greater decentralisation. More companies will also be encouraged to participate in this sector, resulting in more players entering the market. As a result, property prices are likely to rise due to inflationary pressure on land costs and labour costs.
With such a big demand for properties and very limited supply, what would you do? If you were looking to buy a property in Singapore, where would you start your search first? Chances are you might have checked out Housing and Development Board (HDB) flats which make up 90% of all homes in Singapore or private residential properties found on popular property portal sites like 99.co or PropertyGuru.
If so, then we have good news for you. There is another option available, and it’s called a condo. In this article, we will be looking at what a condo is, the pros and cons of buying a condo in Singapore and how to get started with your condo hunt.
What are condos?
As opposed to HDB flats which come complete with their own common areas like lawns or rooftop gardens, condos are actually privately owned properties that abide by strict rules set out by the latest condo launch in Singapore government. Condos consist of individual units (flats) that are sold by developers to people who want to own property in Singapore on either 99-year leases or freehold estates (landed homes). These condos can range from studio apartments all the way up to penthouses.
The good news is, if you have the means to purchase your own condo unit in Singapore, chances are you will not be affected by our current housing crisis here in Singapore considering condos are far less common compared to HDB flats or private properties. When you own a condo in Singapore, it also gives you full rights over the property including the use of communal facilities like pools and gyms that are mostly provided by the development company itself.
So what’s the catch? Why should I buy a condo instead?
While purchasing a freehold estate can give you more benefits outside of ownership such as rental income when it comes time to sell, there are plenty of reasons why people choose to rent out their condos instead.
Firstly, while purchasing a condo is much more affordable than buying actual landed property in Singapore, you need to be aware of the associated costs involved when owning your own unit. Expenses like common area maintenance fees (CAMs), monthly strata fees, building insurance, and monthly utilities are all expenses that will have to be shouldered by the owner or condo management corporation(MC). These could range anywhere from S$100 up to over S$1,000 per month. This means that before you have even paid off your home loan for this property, there are already several other bills that homeowners need to look into paying for on top of their regular household bills every month.