To buy property in Singapore may appear as simple as buying any item in the store. However, it is a lot more complicated than that. You may have built up a few beliefs about properties in Singapore. However, you need to be open to the idea that some of your property beliefs may fall under property misconceptions.
A misconception is different from misinformation because you can easily correct a person with misinformation. However, misconceptions are deep-rooted that is because many people used to take it as the truth. That is why aside from knowing the cost of buying a house in Singapore, you also need to understand some common misconceptions in real estate. In this article, we are going to debunk three misconceptions about buying a house in Singapore.
Freehold properties can be kept forever
Most house buyers prefer to own a freehold property rather than a leasehold property. That is because they have the conception of being able to keep it forever. They can also pass it down to their family members in a form of inheritance. On the other hand, leasehold properties have limited tenure. Singapore, in particular, has two types of leasehold. One is a 99-year leasehold while the other is a 999-year leasehold. Being able to keep the freehold property forever is true to other countries. However, that is not the case when you buy property in Singapore.
Freehold property owners will have to give up their properties at some point. That is the case if the property is in the way of land development. Thus, the Singapore government will require you to return your property to the State. The government will give compensation to those freehold property owners who lost their homes for urban development. However, these owners cannot negotiate for the price or even refuse the amount. Usually, the amount may be lower than the total cost of buying a house in Singapore.
Furthermore, there are times that the property owner has to give up their home because of en-bloc redevelopment. This is the case with apartments and condominiums. Thus, many residents will be forced to sell their homes. That is why freehold property is not always beneficial when you buy property in Singapore.
Renovations can raise the property price
It is vital that you make a few renovations before you sell the property. That is because you want to make the house presentable to those who want to buy property in Singapore. A beautifully constructed house can indeed get a better price compared to a worn-out house. However, it may not be profitable if you are going to do renovations for the purpose of selling the property at a higher price.
Repainting a wall with peeled paint and fixing a broken tile are only some of the cases where renovation is recommended. Full renovations that come with a high price can add to the cost of buying a house in Singapore. However, it might make the property hard to sell.
Many home buyers are not willing to pay more for certain renovations. Some will prefer ordinary tiling over marble flooring. Some people don’t like to pay a higher cost just because the bedroom has a walk-in closet. Although, there are some that will get attracted to this. However, wise home buyers will prefer to buy property in Singapore that is more practical.
Property prices always go up and earn profit
Overall, real estate prices in Singapore have an upward trajectory. Almost all house prices in Singapore are bound to increase in the future. However, you need to understand that property prices are not always going up. Singapore has many quarter property price reports that show instances of a price decrease. However, Singapore has always recovered from this decrease at some point.
To put it simply, property prices in the long term really do increase. However, these prices also experience negative returns in the short term. That is why property investors know that they will wait for a long time to get returns through property appreciation. Many of them opt to go for the renting out option to get a faster return on investment.
An increase in property prices doesn’t signify that the owner is making profits. The owner has to consider the other cost of buying a house in Singapore to determine the profits. One cost of buying a house in Singapore is the mortgage interest. There are also house expenses such as utility bills, maintenance costs, and property taxes to consider. Combining all of that with the actual cost of the property will make you see that you are not profiting much.
Prevent property misconception through SRX Property
Property misconceptions are common so it is alright if you had a few of them. It is recommended that you do extensive research before you buy property in Singapore. You should also ask property agents to give you advice on the cost of buying a house in Singapore. If you are looking for more Singapore property information, SRX Property is the website that you should visit.