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Housing Options in Singapore vs USA – Rents, Buy ? HDBs vs Condo

A good house is critical to create a healthy home atmosphere…besides, housing expense is one of the big expense items that can suck away a good chunk of your income either for rent or EMI and can be an influencing factor for your saving potential and lifestyle too… In this article we will review the housing options in US vs Singapore and what you would miss, if you move to Singapore.

Housing Options – Singapore vs USA

Firstly, America is a huge country and there is plenty of space…Except in metro cities’  downtown areas, you find many houses with big patio, basement, lawn, and even play area. Coming to the housing options in America, you have several options like independent houses, apartments, Condominiums, and Townhouses. Many middle class families can afford to buy a small or medium size house, if they make decent income. Also, the rents are very reasonable depending on the locality you live in. Of course, if you are living in Cities like New York, you tend to stay in New Jersey to avoid the high cost of rental…One of the key aspects is that there are no large scale government built houses in America that are used by general public and if you buy a house, the property belongs to you for life, there is no concept of lease hold for house or land in USA.

Unlike USA, Singapore is a very small place and the real estate is very limited. Due to the nature of the size, the housing options are very limited.  There are only two types of housing options either  Housing constructed by Govt ( HDBs and Executive Condos) or Private Condominiums.  HDB Flats are the government build housing  ( HDB – Housing Development Board) that is given to middle and slightly upper middle class families.. In fact 80% of the city’s population live in HDBs.  Also, the HDB also builds limited other option called executive condominium. The main difference between normal HDB flat and Executive Condo is that the former is not gated and does not have swimming pools and other amenities. Normal HDB flats are not gated and they have common swimming pool, Gym and other amenities for a group of HDB flats or often called as HDB estate in Singapore.  The other options are Private condominiums, which are gated, built and maintained by private real estate companies. They have all the amenities like swimming pools, gym, tennis courts, etc.  It is very difficult, rather impossible to afford an independent house, unless you are a millionaire or you have bought house few decades ago…

Free Hold vs 99 Year Lease in Singapore

In America, if you buy a house or any property, you own it for life. Unlike, in Singapore all of the HDB flats are 99 year old lease, what it means is that after 99 years you will have to give it back to the government. If you have paid 200k for your house, that is only for that 99 years, it is not for life…Some of the private condominiums are free hold, what it means is that you own it for life.  Due to the small size of the country, there are these restrictions and govt is forcing lease to avoid land being locked up.

Renting a HDB Flat vs Condominiums – What’s Price ?

In America, the national median for rental is about $900 to $1000 USD.  It could be much higher if you live in cities and close suburbs, this is very relative…If you look at Singapore, the rentals are pretty high. A normal HDB Flat would cost anywhere from $1800 SGD to $2300 for a 2 bedroom flat ( called as 3 room). Check HDB Stats for 2015. If you look at Condominiums, it can cost anywhere from $2400 to $6000 SGD or even higher depending on the location and size of the condo. As mentioned above, the differences are the gated vs non-gated and other amenities.  This is probably the biggest expense for anyone, who live in Singapore.  BTW, the above rentals in Singapore are at their lowest in the last few years because of the tightening of the government in terms of labor laws and foreign workers.  We will cover that in another article.

Can you buy a HDB or Condo ? What would be the price ?

One of the best things you can do in US, you can buy a house and pay the EMI so that the house is yours…there are no specific rules tied to country of origin and visa status. Unlike in Singapore, you cannot buy a HDB flat or executive Condo built by HDB as foreigner. You need to be a PR ( permanent resident) or Singapore citizen to buy these govt. built housing. Even, if you are a PR or citizen, you cannot buy multiple and sell them immediately, it is all regulated by government. You as a foreign worker can buy a private condominium. But, the cost of it is prohibitively high.   Just the stamp duty ( aka tax) is about 15% for foreigners. Imagine, if you want to buy a condo…the average price is about 1 Million SGD for the cheapest condo…You need to pay 150K SGD to Govt and pay 200K for the Bank Loan, provided you get loan approval. So, the minimum net cash you need is $350K SGD for a $1 Million house…so, it is technically impossible to buy as a foreigner at the beginning of your job in Singapore.

That’s about it folks, hope the above gives you some perspective about housing in Singapore…You may check out the other articles in the Series Move to Asia – Singapore from US Comparisons

What do you think about Rental in Singapore ?  Would you rather wait and buy ? Have you lived here before, share your experience…


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