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Buying a home can be an exciting adventure, if not also a potentially nerve wrecking journey. Exciting, because it is time to decide on where you want to call your ‘hood. So, what is it going to be – is it the Instagram-friendly Tiong Bahru, sea breeze-swept Marine Parade, quaint Joo Chiat, or maybe heartland towns like Ang Mo Kio and Yishun?
Let’s say you have done the math and have decided on your housing budget. What’s next? Well, here’s a handy checklist to help you work through your priorities and go about shortlisting and identifying your dream home.
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Do not underestimate the importance of having an MRT station near your home – preferably within walkable distance from your humble abode. Locations further from the MRT station may require a feeder bus ride, which could add 15 to 20 minutes to your daily commute. It may not seem excessive, but that extra time in the mornings can go some way for those who need to take their children to school or those who are simply sleep deprived.
Furthermore, your property will certainly be more appealing to resale buyers, fetching 5% to 10% more if you are located within a 5 to 8 minutes’ walk to an MRT station compared to those which are not. Buyers also should not underestimate the importance of having nearby amenities such as a mall, supermarkets and eateries, which not only value-add to convenience but also enhances the quality of life.
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Are you planning to have kids in the near-term? Do you foresee your parents moving in with you in the future? That 3-room flat at Queenstown may look appealing and affordable but will it be spacious enough to accommodate any changes to the family unit? Family planning is an important step which all young couples should not skip, especially for those purchasing HDB flats; since any upgrading to a bigger unit can only be done after the 5-year minimum occupation period.
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Do you have school-going kids at home or have a little one on the way? Proximity to schools – perhaps you have specific schools that you wish to enrol the kids in - should be a key consideration, as this impacts their daily commute throughout the school term. This is especially crucial if you are buying an HDB flat, where you will be locked in for at least 5 years before you can sell the flat and move to another area.
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The facing of the unit is another important aspect which should not be overlooked by homebuyers - not just for securing a good view of the city skyline or for Feng Shui purposes, but for a practical reason, namely the unit’s orientation to the sun. As a rule of thumb, units with North-South facing are the best, while units with East-West facing are less ideal as they would bear the full brunt of the late afternoon sun. Owners of such units usually need to spend more on their electric bills to cool their unit and may face a discount in asking prices when they try to sell their homes.
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There are several types of lease tenures for Singapore property, among them are freehold, 999-year, or 99-year leasehold tenure. For most HDB flats, they are issued on 99-year leases, with a reversionary title to the state. In other words, the flats will return to the state upon lease expiry, with owners receiving no compensation at the end of the lease. If you are interested in a leasehold property, particularly an HDB flat, it is important to check its balance lease. If the remaining lease is less than 70 or even 60 years, it may be harder to sell the unit later on as the prospective buyer in the future could face challenges in securing financing to buy your flat.
For properties with freehold titles, usually private residential properties, they would not have to be returned to the state since their titles are effective into perpetuity. Freehold properties are usually popular with home buyers since they tend to better retain their value and can be passed down to generations to come.
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Buyers should also take note of any transformative efforts and initiatives to rejuvenate or gentrify the area, such as a new MRT station or a new commercial centre or mall. Typically, a new transport infrastructure or commercial development in the area could help to lift your property’s growth potential in the years to come. This isn’t to say that you should specifically look out for homes in areas which are slated for redevelopment, since gentrification is a long process and owners must be prepared for dis-amenity such as construction noise and other such inconveniences related with building and construction activities.
Besides determining what are your preferences and priorities, perhaps the most fundamental question that buyers will need to ask themselves is: what is the end goal for the property? Will it be a forever home or will you be upgrading to another property in the future? There is no right or wrong answer, but a property purchase is a big financial commitment which needs careful consideration. For many, a property has been used to preserve their wealth and grow their capital, provide stable recurring rental income, build a retirement fund or a tool for social mobility when they upgrade to a private property. Happy home hunting!
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