Singapore has one of the highest rates of homeownership in the world at 91%. This is a remarkable achievement considering the fact that the country faced a significant housing crisis until the late 1950s. To solve the housing shortage and clear out the slums where most of the people lived, the Housing Development Board (HDB) was established in 1960. With the support of the government and the general public, the HDB was able to provide housing for over 400,000 people by 1965. Today, the board remains responsible for designing, constructing, and selling public housing units.
Moving into one’s first home is a major milestone for any adult, and it’s also a significant responsibility. If you’re in the market for a flat in Singapore, you must be prepared to spend a good chunk of your savings and future earnings to fund the purchase of the property. If you’re taking out a mortgage, using an HDB mortgage calculator can help you plan your finances better. Aside from taking care of the financial aspect of the sale, you also have to be prepared for the reality of living on your own and fulfilling all the responsibilities of a homeowner. With that in mind, here are the essential steps that you need to take to secure an HDB flat in Singapore:
Have a Clear Idea of What You Want for Your Dream Home
The HDB may be solely responsible for developing public housing options in Singapore, but that doesn’t mean that all flats are made the same way or share the same features. You need to decide on the particular details of the home you want to live in. What are the current and future needs of your family, and how big of a space do you require to ensure that all those needs are met? How many rooms should the house have and what features do you consider to be non-negotiable? Do you want to live in proximity to your extended family or workplace? What’s the overall atmosphere of the community that you want your family members to be a part of? When do you want to move in and how long are you willing to wait?
Asking these questions before you start shopping for a flat can help you narrow down your selection. Having a checklist of non-negotiable features on hand can also help you determine just how much you need to save to be able to afford your dream home. On the other hand, the answers to these questions can give you a good general idea of the housing unit that you can afford with the funds currently available to you.
Decide How Much You’re Willing to Spend
The unit’s price tag is also a major consideration when buying a home in Singapore. Determine the range of your housing budget early on and decide how you’re going to pay for the housing unit. You don’t want to set your heart on a particular house only to find out later that it’s beyond your budget. The good news is that you have plenty of public and private financing options available to you. Be sure to check out the ones you qualify for before you finalise your budget.
Check Out Housing Grants
You can use your CPF Ordinary Account (OA) savings and personal savings to pay for downpayment and monthly payments. Lower- to middle-income families can also make use of grants when purchasing their home. An HDB BTO grant, for example, can provide you up to SGD 80,000, while an HDB resale grant can cover up to SGD 160,000. If you’re planning on purchasing an executive condominium, you may qualify for an EC grant of between SGD 10,000 and SGD 30,000.
Consider Taking Out Bank Loans As Well
Alternatively, you can go to a local bank and apply for a housing loan, which can cover up to 75% or 95% of the price of the house. Bank loans come in all shapes and sizes, and these loan packages can sometimes include subsidies for various fees. Before you sign up for a housing loan, though, make sure that you’ve checked all the details that can affect how much you need to repay, including the term of the loan, interest rates, promos and discounts, and penalties and lock-in periods.
What Lies Ahead for the Prospective Homeowner?
From providing more than 51,000 housing units in 1965, the HDB has now built over 1 million flats, with 70,000 more units still under construction. More than just providing basic housing for the citizens and residents of the country, the board has also made a mission out of developing sustainable towns that offer better living conditions and a community-centric environment. As a prospective homeowner, this only means that you have plenty of options at your fingertips once you start shopping for a new home in Singapore.