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Rent Or Buy A House in Singapore? How To Decide!

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In Singapore, known for its exceptionally high homeownership rates globally, buying or renting a private property might appear straightforward—at first glance.

As Singapore’s property prices continue to climb, the dilemma of renting or buying a home has never been more pressing. The private property prices have increased by 6.7% in 2023 after surging by 19% in the previous two years. This uptick in prices casts a shadow on the dream of private property ownership, sparking debates on its future affordability.

At the same time, the private home rental market appears to be levelling off after seeing significant growth in 2021 and 2022. The growth in previous years was due to increased demand and a smaller supply of completed new private developments during the pandemic.

The recent trends indicate a shift towards a market more favourable for tenants. After two years of steady growth, housing rental prices have begun to plateau, suggesting that the markets for both private apartments and HDB flats are entering a period of stabilisation in 2024.

With rental prices beginning to level off, the decision between renting and buying in Singapore for 2024 poses a complex question. In this blog, we delve into the intricacies of both options, drawing on financial expert opinions to dissect the rent-versus-buy conundrum and offer insights to navigate this pivotal decision.

Renting a House vs Buying a House: An Overview

Whether you choose to buy or rent a home, both options necessitate a steady income to manage the payments and related expenses.

Buying a home – be it a BTO flat, EC, resale HDB flat, BUC condo, resale condo or any landed property – is not only a huge part of the Singaporean dream but also brings several tangible and intangible benefits.

Owning a housing property also makes for a good future investment. On the other hand, renting a property provides more predictable expenses and frees you from the responsibilities associated with home ownership.

Consider carefully the location you prefer, the required number of bedrooms, whether you need a furnished apartment, how long you plan to stay in a rented flat, and whether you’re leaning towards private or public housing. These considerations will aid you in making a well-informed choice.

Purchasing a home is not always a better choice over renting, and renting is not always as uncomplicated as it seems like. Which option should you choose depends entirely on your lifestyle, personal goals and financial situation.

Here’s a quick overview of the key differences between buying and renting a home in Singapore.

Buying a houseRenting a house
Asset as you will own the property after full mortgage repaymentLiability as you don’t own the property
Long-term financial commitment considering the 25- to 30-year home loanShort-term financial commitment (usually up to 3 months)
Requires downpayment and monthly repayments (can use CPF savings)No downpayment and monthly mortgage repayments required
Up to 5 years waiting time for new properties; resale flats are “move-in ready” thoughMost rentals are in “move-in ready” condition
Buying and selling other property take timeEasy to find another place for rental
You are responsible for all home-related maintenance issuesDepends on the rental contract; usually, the landlord handles repairs & expenses
Eligible for certain government grants/subsidiesGovernment housing grants are not applicable
Renovations are allowed as long as in adherence to authority guidelinesModifications are not allowed usually

Why are Singapore rents so high?

The beginning of 2023 witnessed a significant surge in rental prices, reaching levels not seen in over a decade. This steep rise in the Singaporean rental market in the past two years is due to increased demand and a delay in the supply of new residential developments and BTO flats due to the COVID-19 pandemic. It has brought more locals into the market.

The attitude of Singaporeans towards renting has also changed. More couples are willing to rent while they wait for their BTOs to be completed. There has been an increasing trend for younger Singaporeans, choosing to rent as they wish to have their own space and live among a like-minded community, making co-living more popular.

Accompanied by rising housing prices across the city-state’s property market, rental demand has also increased as non-residents return to Singapore to work amidst the robust recovery from the pandemic.

Will rental prices go down in 2024 Singapore?

Based on insights from property experts, rental prices in Singapore may decrease in 2024. This forecast is primarily due to a substantial increase in the housing supply, with more than 28,000 new private residential units (not including executive condominiums) completed between 2022 and 2023.

Additionally, the private rental market is expected to face further challenges in 2024 due to the shrinking domestic demand, as many locals exited the leasing market after moving into their new homes.

According to a report from real estate expert OrangeTee Research in 2023, Singapore’s overall rental transactions in Singapore were expected to drop below the 10-year average of 81,474 units, landing somewhere between 75,000 and 80,000 units. By 2024, this number is expected to fall to 70,000–75,000 units.

The influx of new housing units and HDB flats becoming available after meeting their Minimum Occupation Period (MOP) is set to apply additional downward pressure on rental rates in 2024. This trend is expected to affect private rental prices and lead to a decline in HDB flat rental rates as the market adjusts to the increased availability of units.

The end of the Covid-19 pandemic also played a role in slowing rental price growth. The demand for rental properties had surged during the pandemic due to work-from-home arrangements and delays in new housing construction.

However, as these new housing units are now complete, many families are moving into their own homes, reducing the demand for rental properties. This shift is reflected in the rising vacancy rates for private residential units, which increased from 6% in Q1 2023 to 8.4% in Q3 2023.

With the market adjusting to these new conditions in the property market, tenants will find themselves in a stronger position to negotiate better rental rates thanks to increased options and intensified competition among landlords. This situation is particularly evident in the private home rental market, which has already seen a slowdown in the second half of 2023, especially in the luxury sector.

In conclusion, the combined effects of increased housing supply, reduced demand, and the aftermath of the pandemic are expected to contribute to a softening rental market in 2024. It could benefit tenants looking for more affordable rental options in Singapore.

Why renting is sometimes better than buying in Singapore?

People often wonder if renting is cheaper than buying a home. The answer can vary based on the location you prefer. For instance, the monthly payment for a mortgage in a less sought-after area might be lower than the rent for an apartment in a highly coveted neighbourhood.

One of the biggest myths about renting a home is that you are just throwing away money every month. This is not true. For some people, especially young Singaporeans, renting might make more sense. Renting comes with predictable costs, which allows you to plan for the future accordingly.

Less financially straining than owning

When you buy a property, you commit yourself to decades of debt. You have to save for the sizeable downpayment as well as for those burdensome upfront costs like renovations, furniture, electronics, etc.

In contrast, renting a property requires a far less financial commitment. Upfront costs of renting typically involve a rental deposit and the first month’s rent, which leaves you with more cash on hand to use or invest in other aspects of life.

It also allows you to set aside more cash for emergency household expenses. Moreover, tenants don’t have to worry about costs like property taxes, home maintenance, etc.

Flexibility to move & upgrade

With rentals, you are not bound to property or location. You have the option of moving when your property’s lease is up.

On the other hand, there are some restrictions when buying a home, for example, a 5-year Minimum Occupation Period (MOP) for HDB flat owners. If you are weary of your once-charming neighbourhood, have received a job offer in another city, or simply looking to cut costs, renting a house would make a wiser choice.

For some people, being free to move to a place of choice is a priority that surpasses the pride in home ownership.

Ready to move in

Buying takes a lot of time, including the time spent searching for a suitable property, attending viewings and waiting time while construction is in progress. Also, purchasing a home involves a lot of paperwork.

Renting, on the other hand, is a much faster process and more straightforward in terms of paperwork. Tenants can fulfil their need for urgent accommodation by renting a home by signing the rental tenancy agreement and paying a deposit before moving in.

Those who don’t have or want to invest in furniture and electronics right now can even go for a fully-furnished rental home.

No worry about home depreciation

It is tempting to buy real estate in Singapore for investment purposes, especially in good times. However, the housing crash proved that home ownership could be risky.

Due to adverse circumstances, your home might not value as much as you wished it would or even less than the price you bought it (considering inflation). But if you are renting a home, the risk belongs to someone else (your landlord). Even in an unsteady housing market, renters may not be as adversely affected due to decreasing property value as homeowners.

Fewer maintenance obligations

A tenant is usually not responsible for paying for the repair expenses of electricians, plumbers, air-conditioning guys, and so on. The burden of maintaining the property usually lies with the landlord. It is crucial to thoroughly read the rental contract terms to exactly know who is responsible for what.

Let’s break down the points into the pros and cons of renting a home in Singapore.

Pros of RentingCons of Renting
Short-term financial commitment (> 3 months)Liability, because you will never own the property
“Move-in ready” conditionOwned by landlord
A landlord usually handles maintenanceNot allowed to use CPF to pay rent
Renting a condo is cheaper than buying oneCannot modify property without owner’s consent
Flexibility of locationNo rental subsidies
No property taxesNo tax benefits

Who should consider renting a home?

Rental accommodation would be a great choice if you are:

  • A singleton with a well-paid job looking to stay in a trendy apartment near or in town for personal space and freedom,
  • A young couple not ready to settle down as yet or wants to experience living together without parents/siblings,
  • A person looking to move into a fully furnished flat on an urgent basis,
  • A professional with work commitments overseas or one that requires you to travel frequently,
  • A short-term lease seeker looking for temporary accommodation, for example, while your BTO flat is under construction or your own home is undergoing renovation,
  • A free-spirited, home-hopping nomad who wants to march to the beat of their own drum.

Is it worth buying a property in Singapore?

Singapore is Southeast Asia’s de-facto financial centre and one of the richest nations in the world. Its small land area indicates a limited housing supply, and with the sudden spike in population in the past years, you can see a massive gap opened up between housing demand and supply. As a result, housing prices in Singapore are driving north.

Singapore’s political and economic stability adds to the attractiveness of its real estate market, providing a sense of security for property investors.

For the second consecutive year, the growth of private home prices has slowed down, increasing by 6.7% in 2023 compared to 8.6% in 2022, amidst a decrease in transaction volumes. Despite the deceleration, property prices are expected to continue rising throughout most of 2024.

Is 2024 a good time to buy a house in Singapore?

The property price index’s rise from 162.2 in January 2021 to 201.5 in January 2024 illustrates a robust upward trajectory in the market, signalling strong and sustained growth. This growth indicates a healthy demand for housing and suggests that the market’s confidence remains high, reflecting ongoing investment and development activities.

Property price index of private residential properties

The consistent increase in home prices over the past few years means that buyers are unlikely to find significantly lower prices in 2024, which could deter those hoping for ‘bargain’ purchases.

However, the resolution of the housing supply crunch and the anticipated increase in supply could introduce more options for buyers and help moderate price increases. This could make the market more appealing to potential buyers by offering a wider range of choices and potentially slowing the pace of price growth.

A more stabilized market presents its own set of advantages, including reduced volatility and more predictable pricing, which can be particularly appealing for buyers seeking long-term stability. While there’s no clear indication that prices will decrease in 2024, the market is not expected to experience the rapid price escalations seen immediately post-COVID-19.

This could make 2024 a more opportune time for prospective buyers who are prepared and can afford to enter the market.

Ultimately, deciding to buy a home in 2024 should involve careful consideration of one’s risk tolerance, financial readiness, and the broader economic landscape. Prospective buyers should assess their personal circumstances, including job security, income stability, and future financial goals, against the backdrop of market conditions and economic trends.

Given these factors, 2024 could represent a good opportunity to buy a house in Singapore for those who are financially prepared and willing to commit to a long-term investment in a relatively stable and growing market.

However, it remains crucial for individuals to conduct thorough research, possibly seek advice from financial advisors, and consider their personal and financial situation before making such a significant decision.

What are the advantages of buying a house instead of renting?

It is crucial to understand how a home-buying decision can benefit your finances and lifestyle. Let’s look at the various advantages of purchasing a home over renting.

A sense of security & stability. When you own the roof over your head and are not at the mercy of your landlord, it provides a sense of security and stability, especially to couples with kids. Besides, it is an asset under your name, and you can renovate and design its interior as per your wishes.

Build equity. Your home equity is the difference between what you can sell the home for and what you owe. Every monthly instalment paid goes toward building up your equity in the house. Over time, more of what you pay every month goes to the remaining loan amount rather than the interest, building more equity. In the case of renting, you make monthly payments, but it doesn’t build your equity.

Chance to use CPF funds. One of the few ways of using your CPF monies is to buy a property, or your money is just sitting – locked up – earning a 2.5% interest. The government in Singapore allows homebuyers to use CPF to make home loan repayments and thus use their CPF monies to pay for an appreciating asset which can grow faster than 2.5%.

Renters cannot use CPF OA savings to pay for accommodation, which means they would be parting with their hard-earned cash.

Potential of capital appreciation. The possibility of selling your house for a higher price in the future is one of the biggest things most of us look out for when investing in a property.

While there is no guarantee that your home investment will always make a profitable deal, it is highly likely to be. Moreover, you can also choose to rent out your whole property or even those extra rooms if you want and earn passive income while living somewhere else.

A home can be inherited. Since there is no inheritance tax when you pass your property on to your spouse or kids after your death, consider buying a home for them. When you buy a home, you provide your family with a place they can continue to live in after you are gone.

However, bear in mind that many condos and most HDB flats follow a 99-year lease system, so they will not be passed down to your grandchildren or great-grandchildren.

Housing subsidies. Depending on your eligibility, you can apply for government housing grants when buying public housing or executive condominiums, which could lower your housing costs significantly.

Pros of BuyingCons of Buying
A good long-term investmentLong-term financial commitment
Building equityLess mobility
Stable payments with a fixed-rate mortgageHigh upfront costs; hefty downpayment
Able to use your CPF moniesRepair and maintenance costs
Free to customise your living spaceProperty values can fall
Pride of ownershipProperty taxes like SSD and ABSD can add up
Tax benefitsTakes time to buy and sell a property

Who should consider buying a home?

A home purchase makes more sense if you are:

  • A young couple planning to start their family soon. Eligible couples should go for buying BTO flats using government housing grants,
  • Someone with enough CPF monies, which you can use to buy an HDB flat with practically no cash outlay on your end,
  • A future upgrader looking to buy an EC using available housing subsidies, which can later turn into a private property asset,
  • An asset collector, which means even if you are not thinking about selling the asset now, you can monetise it later to get retirement income from an appreciating asset,
  • Someone who likes to personalise everything, including the home they own as per their unique taste.

Is it better to rent or buy a house in 2024?

While owning a home is a way of life in Singapore, renting has become more commonplace in recent years, mostly due to the work-from-home culture and millennials wanting to move out of their family home.

Unfortunately, there is no one-size-fits-all solution to the buy-or-rent conundrum. Renting and buying both have their advantages and disadvantages. With rising interest rates and surging resale and rental prices, the pick between buying and renting a home isn’t so simple.

The following factors should affect your decision to buy or rent a home:

Term of stay. Ask yourself how long you will be staying in one place. Many experts suggest that if you are planning to stay in a place for less than 5 years, it is okay to rent. If you are staying for five years or longer, it is financially prudent to purchase a house.

Affordability. When considering purchasing a property, it’s crucial to assess whether you can handle significant financial commitments, such as a 25% down payment and initial expenses like renovation, stamp duty, and legal fees.

Remember to factor in ongoing expenses, such as property tax, which is set to rise in 2024, along with potential increases in utility and maintenance fees due to the GST hike to 9%, starting January 1, 2024. These also include costs for replacing furniture and fittings.

In contrast, renting a home mainly involves paying the monthly rent, without the burden of homeowners association (HOA) fees, property taxes, or maintenance expenses. It’s essential to take a thorough look at your monthly expenses before deciding to buy a home.

Level of commitment. Do you seek more flexibility and less commitment? Renting offers a relatively stable place to live in with minimal lease as short as three months for private condos or six months for public housing. Buying a home would demand a longer commitment – even if you decide to sell, you must abide by the MOP of 5 years.

Purchase intention. Be clear about why you are buying a property. Are you buying it for a living or as an investment, or both? Once your intent behind purchasing a home is clear, you can make a better decision for yourself.

Future plans. If your life is in flux or expected to change dramatically anytime soon, there is nothing wrong with continuing to rent. If you plan to take a new job overseas or want to move to a different country, it is suggested to rent a home while you are in Singapore.

Buying a home is a long-term investment that may offer financial gains. Consider whether you’re ready for such an investment or prefer the liquidity that comes with renting.

Market Conditions. The decision might also depend on the current housing market conditions, including property prices, interest rates, and rental market trends. A stabilizing or cooling market might offer more favourable conditions for buying, while a volatile or high-priced market might make renting more attractive.


Are you planning to buy or rent property at some point in the future? Bear in mind that there is no definitive answer to the rent vs. buy question. It just depends on your personal situation and finances. Try to look beyond convenience and on-the-spot price comparisons when finding an answer to your rent-or-buy dilemma.

At Dollarback Mortgage, we have a team of experienced and talented mortgage consultants who can help you make an informed decision on whether to buy or rent a home based on your current financial situation. Should you need help on the best home loan in Singapore for your property purchase, please contact us to learn more about the best deals!

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