Renting a house was never an option to most Singaporeans. But with the property price falling for nearly 3 years and some signs of recovery, you may start to ask yourself if it is wise to buy or rent a house.


80% Singaporeans already own a house, but there are reasons you got to move.

  • Maybe your child is going to primary school next year and you need to move nearer to the school
  • Maybe you just change job and you don’t want to spend 2 hours a day for travelling to work
  • Maybe you want to upgrade your HDB to a condominium and you need to make arrangement for the transition period.
  • Maybe you just want to stay nearer to your parents

No matter what the reason is, you only have two choices: buy or rent. Each option offers a different set of benefits and challenges and you got to figure out which is the right one for you.

I have spent a lot of time studying

And I have found a lot of differences which I would like to share.

In this article, I will particularly talk about 5 questions which you must ask yourself, before you decide to buy or rent a condominium for own stay. Let’s move on to the first question…

#1 Will buying a house kill your savings?

You may or may not believe that a house for own stay, especially with a mortgage, is a liability. This is because an asset is supposed to generate positive cash flow, where an owner staying house does not.

In Singapore, private property is severely overpriced compared to average income. Buying a house will not only wipe out your years of CPF and Cash savings, it will also create a long-term cash commitment. When I was considering to buy a house, I did a simple worksheet below. This has not even considered any Buyer Stamp Duty (BSD) because I do not have any property. But the figure speaks for itself.

You can see clearly that the cost of taking over a property in Singapore is not only the 20% mortgage down payment, but a lot more.


Buying a house is a fantasy for everybody, but the question you should ask yourself is that if you have enough cash reserve and future cash flow to afford this financial responsibility.

#2 Are you comfortable with the ongoing commitment?

The cost of buying a house does not stop at paying off the loan. Given the contractors’ workmanship today, very soon your house will start to fall apart. The ongoing expenses will just keep coming

  • Repair costs of paint, wall crack and water leak
  • Replace old furniture with new one
  • Maintenance Fees
  • Property taxes


When you are a private property owner, you are essentially on your own. You can no longer dump your bulky item below your HDB, but to pay someone to dispose of them.

If you think you are ready to commit to all that, then buying a house is fine. But if you

  • Barely make ends meet
  • Don’t want the hassle of taking care of a home
  • Appreciate the fact that all of the upkeep is handled by your landlord

Then renting is a solid solution.

Bear in mind for most rental contracts, you merely have to pay $200 minor repair cost. The rest are all born by the landlord.

#3 What kind of living arrangement works for you?

It is not all bad for owning a house. The most beautiful part is that you have complete control over your living space. From the design of your interior to furniture, everything is your choice. You can even knock down some walls to have a total facelift of the house.

If that is the case, buying property suits your needs and purposes better.

However, if all you want is a place to stay in to be close and convenient to your workplace or your children’s school, renting is an excellent solution too.

In case you are not aware, nowadays filtering down property in your ideal location is so easy at PropertyGuru. Even if you are going to live in Malaysia, you got real estate website such as PropertyGuru Malaysia too.

#4 Are you new to the area?

Sometimes you have to buy a house in a completely new estate than where you were living. if you know little about the neighbourhood, it’s probably better to rent first.

For example, I don’t like the first estate where I rented. It was a small and critical community which I struggled to fit in. Luckily I could pack and leave anytime.


So before you make a costly mistake, make sure your house is really located where you like. You can always rent first to experience living there. I have heard many tenant-turn-home-owner stories during my hunting property, some estates are just excellent for living where some are totally not.

Compare it to the cost of buying a home, renting a house is at such a low cost and it’s a great way to get your feet wet.

#5 Do you have other financial goals?

Do you have some aspirations in your life? Do you have a personal mission statement? I bet you do.

  • Maybe you want to travel around the world
  • Maybe you want to stop working for a while and spend time with your children
  • Maybe you want to pursue some personal passion
  • Maybe you just want to retire earlier

Buying a house could create such a liability in your life that you have to postpone all your plans. No matter what potential return this piece of land can generate for you in the future, you have to ask yourself if it is worth it.

Would you want to exchange your house for a nine-seater station wagon? Some Singaporeans have already taken the leap.


If you don’t want to put your dreams on hold just because you have to pay off the outstanding loan, then renting should be your next move.

Take your time to consider these factors closely

The study shows that on average, women spend one month worth of hours to prepare their wedding gowns, guys spend one week worth of hours to choose a car.

But in Singapore, many people spend less than a day to decide which house they will buy.

If you are planning to put down roots, you must think carefully about your financial liabilities, your desired lifestyle and your goals in your life.

And if you really want to buy a house, it is best to start saving up and taking steps to ensure your financial capability is at its best. Having strong finances is the first requirement in any home ownership, because the price of your house will very likely determine your spending budget for the next ten years.

What if you are unsure

It may be the first time you start thinking about this seriously, and you are not sure if you are going to make the right financial decision. Ask the question using the comment box below and I will help answer them.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

  • I am 57yrs old and PR since 2016. I have a family of 3 children and wife. My gross monthly income is 30K/month. I have no loans and currently renting for 3800/m. Is it worth buying a house now? Or renting is an OK option?

  • Not all home had positive return.
    The monthly premium higher short term .
    Rental return lower than mortgage loan

  • dear Ivan,

    i like the article!

    the root of the housing issue in Singapore and other dominantly Chinese countries is the holy believe in real estate which makes people less rational in their decisions.

    we, Europeans, look at housing as a simple investment and are very sensitive to affordability. our guideline 30% of income can be spend only on housing is well maintained, although certain countries have enormous incentives like offsetting the full interest paid on mortgages against the highest income tax bracket.

    nevertheless we have no obsessions to owe a house; renting is fine when it more economical. our attitude on this investment is maximum medium term, say 4-5 years and is regularly reconsidered.

    our housing life cycle is surely shorter and high/low prices depend on general economic conditions and expected unemployment figures. people buy/sell houses without emotions and try to maximise their profits.

    the housing prices in Singapore, as well as Australia,KL,etc are ridiculous, especially taking into consideration the quality of workmanship and components applied.

    Singapore has an argument on land shortage but Australia surely not.

    i personally think that the greed driven triangle of developers-banks-government is playing a dominant role in the housing industry all with their own reasons.

    where governments do not want to offer and maintain affordable housing, the developers want to maximise profits at any cost and banks are happy to ride along filling their own deep pockets as the industry is an important part of their business.

    we all know the collapse of housing/mortgage business in USA, Europe and other areas, all places without the sacred real estate attitude, it might be an expected front runner for the Singapore future situation.

    the 3 years falling prices did not bring the current levels to anywhere close to affordable; the cost of a high quality and isolated 4 season sustainable landed house in Europe, including relatively expensive land, are at best Euro 2000/ m2 = S$ 300/ft2.

    so, at least you have a bottom line to prepare for.


    • Hi Jan,

      Thank you for the information. It opens our minds to look at what is happening in other parts of the world.

      30% mortgage servicing ratio should be the way to go. Unfortunately, most Singaporeans are still struggling with 60% debt servicing ratio.

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