Buying your first home in Singapore: PropertyGuru's country manager on budgets, home loans, questions to ask, and more

Buying your first home in Singapore: PropertyGuru's country manager on budgets, home loans, questions to ask, and more

Good house hunting

Text: Tracy Phillips

Editor: Crystal Lee

Image: Unsplash

One of the most grown-up and (possibly) craziest thing you'll ever do as an adult, is buying your own place — whether you're flying the nest if you've been living with the folks, or to quit paying rent and put the money towards a mortgage instead. For many of us, it'll be our most expensive purchase, like ever. Along with the fact that you're going to be spending years in your new abode (at least five before you can sell if you're buying a HDB), owning a property is a life-changing decision. Beyond personal preferences and needs that impact on where and when to start looking, there are a plethora of things to consider — housing loans, agent fees, evaluations, renovations, etc — which are enough to make one re-consider leaving mum and dad's.

Should you work with an agent or go it alone trawling online property sites to save the commission? What questions should you ask prospective sellers? Is HDB or private the way to go? For all these questions and more, we roped in Dr Tan Tee Khoon, Country Manager of PropertyGuru to share the first-time buyer tips you need to know.

Buying your first home in Singapore: PropertyGuru's country manager on budgets, home loans, questions to ask, and more (фото 1)

As a first-time buyer, what are the key considerations one should take note of before starting the house hunting process?
Budget, type, and location. First and foremost, conduct a thorough financial audit to determine the maximum property price you can afford based on your level of income and savings. Bear in mind that there will be renovation and recurrent maintenance costs in the long run too! Once there is a budget in mind, begin narrowing down the types and sizes of homes within your affordability range (i.e., executive condominiums, private residentials, landed, BTO). For first-time buyers, BTO flats are a good starting point as they are usually priced friendlier. Finally, it is important to find an accessible home location by funnelling down factors like its proximity to public transport, amenities, offices, and schools.

The house hunt is now on. Are there any hacks to simplify and make the search easier and more enjoyable? Perhaps something newbies never consider?
Property consultants, brokers, and agencies are always a viable go-to option for first-time buyers to make their property buying search hassle-free. These property consultants and brokers can also accommodate the specific needs and requirements of their buyers. For the novice property seeker, the internet is always an excellent resource for property-related information. If your time permits, keep a pulse on the latest property news and conduct some property research. This exercise will help you to make a better judgement on value and capital appreciation when purchasing your property.

Property-related information is also more accessible today with websites like PropertyGuru that provide resources like 'property market index reports' for prospective homebuyers to get a sense of what to look out for in the property market. Property seekers can also make good use of the filters to personalise their property search and become one step closer to finding their dream home. As first-time buyers, it is easy to get carried away by all the information you find. Therefore, start with a firm budget that is within your means and avoid spending more than you can afford.

What do you think are the most important questions to ask the selling agent/property owner?
To make smarter decisions around the buying process, it is important to ask questions like why the seller is putting the property up for sale, how long has the seller being living there, the home's age and current condition, whether any major renovations or repairs have been done, and if there are any potential peeves (i.e., noise, neighbors, exposure to weather) to take note of. While you may not always get a straightforward response, it is good to garner some first-hand insights from the sellers themselves. These are commonly overlooked questions as many homebuyers tend to focus on the monetary aspect of owning a home and omit the important background details of their potential home and its surroundings.

Agent or self-hunt, how should one decide?
Homebuyers of today are increasingly savvy and may look to eschew the services of property agents, preferring to handle the entire process themselves. However, if this is your first time buying a home, it is recommended to engage an agent to help with your home-buying journey. While it is easy to find property-related information online, there are important facts and data you might not be privy to without an insider's help. Take details like how your home's orientation can get affected by sunlight and external noise, for instance. An experienced and reliable agent can advise you on such matters and accompany you to inspect the home at different times of the day and week so you can get a better feel of living there.

All in all, while an experienced buyer may be able to navigate the property purchase process independently, it is safer for a first-time buyer to have an agent serve as an advocate for your interests.

Buying your first home in Singapore: PropertyGuru's country manager on budgets, home loans, questions to ask, and more (фото 2)

Pros and cons of going HDB or private?
The pros and cons of getting an HDB or a private property are aplenty but choosing between the two boils down to these key considerations: home financing and unique needs.

When it comes to home financing for the purchase of private properties, this is only possible via a bank loan. A HDB flat, on the other end, gives you the option of financing with either an HDB concessionary loan or a bank loan. But did you know that you could refinance your home loans too?

According to PropertyGuru's latest consumer sentiment study, 40 percent of Singaporeans were not aware that they could refinance their home loans. Refinancing is something that all first-time homebuyers need to be aware of and consider once they are eligible to do so (refinance eligibility requirements differ dependent on the loan). To ensure smoother and more accurate affordability calculations, first-time buyers can take advantage of digital property-related tools or tap on the expertise of PropertyGuru Finance's advisors to confidently choose the loan that best fits their needs.

For some homebuyers, affordability may just be one of the key considerations amongst other pressing needs. For example, you might want to buy a private unit near your workplace or stay in the same HDB estate as your parents to facilitate childcare in the future. While we cannot quantify these needs, this does not mean that they are less critical. First-time homebuyers can also meet in the middle by considering Executive Condominiums as they are usually priced a tad lower (about 10 to 15% lower) compared to private condominiums and are also available in some great locations too.

To sum up, the suitability of an HDB or private property depends on the homebuyer's lifestyle and financial situation. Choosing between the two is much less looking at the pros and cons that each option offers, but instead on your personal needs for a place that you will be proud to call home.

Buying property is likely the biggest ever expense one will make in a lifetime, should one always think about resale value, especially when it's their first home?
Considerations for a property's resale value are a nice-to-have, but certainly not critical.

Instead, first-time homebuyers should factor in mid to long term (three to five years) considerations based on more tangible needs. If family planning is something you foresee in the near future, for example, then choosing a home that is in close proximity to primary schools should take priority over the possible resale value of the property. After all, it is not just a question of how much your property can fetch in coming times, but rather if you made the best decision possible for a place that can fulfil your future requirements.