Buying a home in Singapore is a complicated procedure. Unless you've got the dough for private property, you're pretty much stuck playing by the HDB's rules: get married or be over 35.
For most people, that means when you can buy a home is something that has to be left up to fate.
But buying a home as early as you can does have its advantages, assuming you can find somebody who is willing to do so with you. Here's why:
You qualify for more grants
Many Singaporeans put off buying a home until they've got enough money.
But buying a home when you're young and broke can come with a big advantage: you qualify for more government grants when your income is lower.
For instance, if you and your fiance/spouse have a combined income of $4,001 to $4,500, you will qualify for $50,000 worth of housing grants.
Apply for a modest BTO flat that costs around $100,000 and you will only have to pay $50,000 for your entire flat.
On the other hand, if you wait until your combined income has risen to the point where it is between $8,001 to $8,500, the total amount of housing grants you will qualify for is a measly $5,000.
While the property market has been in a bit of a slump the past few years ever since the cooling measures kicked in, capital gains are still likely for couples who buy BTO flats, since these are always priced lower than their value will be when the property is built.
That isn't to say you should run out and buy a flat today. But being vigilant and watching out for good sales launches or resale flats as early on as possible can help you to get a good deal.
It is highly unlikely that property will be cheaper than it currently is ten years from now.
You'll be closer to the five year MOP
The five-year Minimum Occupation Period (MOP) can be a pain for couples who're buying their flat primarily to make money out of it.
You're prohibited from renting out the flat in its entirety or selling it until the MOP is up.
The earlier you buy your first home, the sooner you'll be able to rent it out or sell it at a higher price than you bought it (very likely if you bought it when it was uncompleted).
You'll be closer to financial freedom
Singaporeans may have a relatively high GDP, but the average Singaporean is quite far from financial freedom, thanks to being enslaved by a hefty home loan and possibly car loan.
Buying a modest HDB property early on in life with the help of generous grants can enable you to pay off your loans faster. Singaporeans with a fully paid-up home are much closer to being debt-free and achieving financial independence.
Heck, if you're open to living in a neighbouring country like Thailand, you could technically just retire, rent out your flat and live there at a fraction of the cost.
Cultivate good spending habits early
A lot has been said about the shortsighted spending habits of young Singaporeans more intent on padding their Instagram accounts with pics of OOTDs and restaurant meals than saving for the future.
Well, most of these people haven't had to contend with the burden of home loans yet.
By buying property early on in life, you'll be forced to take stock of your financial situation and cultivate good spending habits much earlier than those who've never had to think about it.
It will probably mean you amass a tad fewer designer bags and limited edition shoes, but that's not necessarily a bad thing.
The article first appeared on MoneySmart.
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