DollarBack Mortgage

New Home Loan

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

DollarBack Mortgage

Homeownership is considered one of the metrics of success in Singapore. People who think that renting is a terrible waste of money would like to believe that renting a house is comparable to helping someone else pay off their mortgage instead of putting that money into your own property.

While owning a property may be a lifelong goal for many Singaporeans, home ownership doesn’t mean the same for everyone.

It’s hard to find an answer that fits all. Many financial experts back the idea of renting over buying. In this article, we will try to understand renting vs buying in more detail and provide answers to ease your rent-or-buy dilemma from a financial standpoint.

Renting a House vs Buying a House: An Overview

Buying or renting a home provides you with a place to live. Both actions require a regular income to take care of the payments and associated costs.

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.

Take time to think about the area/location you want to stay in, the number of bedrooms you need, whether the apartment should be furnished, how long you plan to stay in a rented flat, and if you want private or public housing. It will help you make an informed decision.

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 is the rental price so high in Singapore?

While renting a home may seem like an economical choice in the short term, the money spent on rent adds up in the long run. To make things worse, the rental price growth in Singapore has already reached 8.5%, accompanied by rising housing prices.

In the past 24 months, the steep rise in the Singaporean rental market is most likely due to an increase in rental demand coupled with a supply delay in new BTO flats and residential developments. Moreover, disruption in the global supply chains and labour shortage further contributed to the rise in the prices of rentals.

Will rents go down in 2023 in Singapore?

Singapore’s rental prices could get rise further owing to the most recent property curbs and a shrinking housing supply. In the last year, rents for private apartments in Singapore have surged almost 31% compared to September 2021.

According to property analysts, private residential rents in Singapore are likely to continue well into 2023 with a 5% on-year rise. This forecast came after the Urban Redevelopment Authority (URA) rental index for private residential properties rushed 6.4% in the first quarter of 2023.

Why renting is sometimes better than buying in Singapore?

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 home 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 property prices have surged each quarter since the Circuit Breaker in Q2 2020. Although at a slower pace, property prices are set to rise for most of 2023. According to the Urban Redevelopment Authority (URA), Singapore property prices rose by 2.6% for Q1 2023.

The private residential property prices jumped by 10.6% in 2021, property prices could rise further between 1% to 4% in 2023, according to Singapore real estate agencies Knight Frank and JLL.

Will 2023 be a good time to buy a house?

As an estimated 31,000 HDB flats will complete their MOP in 2022, the impact on HDB upgraders is likely to continue. However, property analysts are confident that the Singapore property market will make it through this tough phase.

According to a forecasting service Trading Economics, Singapore’s house price index, as of Sept 2023, is expected to hit 192 points by Q3 2023, 197 points in 2024 and 198 points in 2025. That would denote a 3.2% growth by the end of 2023 and a 2.1% growth in 2024.

Prospective homebuyers looking to buy a new home in 2023 should check their risk appetite and room for affordability.

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 2023?

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. Think if you can afford the 25% downpayment and other upfront costs of buying the property. Don’t forget to consider the recurring costs. When you rent, you pay the monthly rent only – no HOA fees, no property taxes, and no maintenance costs. Before buying a home, look brutally hard at your monthly spending.

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.


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 loans for your property purchase, please contact us to learn more about the best deals!

best home loan rates

Related articles

Progressive Payment Schedule For BUC Loans: Benefits and Risks

Uncover a progressive payment schedule associated with BUC loans in Singapore

DollarBack Mortgage
read article

How Market Trends Impact BUC Loans And Construction Financing

Find out how market trends in Singapore impact BUC home loans and construction financing

DollarBack Mortgage
read article

Key Trends For The Singapore Property Market in 2024: What To Expect?

Uncover trends for the 2024 property market...

DollarBack Mortgage
read article