Despite the hefty price tag of a condo, living in one is still seen as having made it up the social ladder. Apart from the status factor and facilities, they’re also mostly great investment vehicles. If it’s your first foray into buying a condominium, here’s our first-time buyer’s guide to choosing the right condo.
Plus, we speak to real estate agent Wahidah Ayub, to find out what are some of the key things to look out for, and how you can maximise your chances of getting the right condo unit.
1. Decide on the condo profile that best suits your needs
Aurelle of Tampines Condo
Image credit: Aurelle of Tampines EC
To start off your condo buying journey, the first thing to have a think about is what kind of condo that you want to go for.
Broadly, there are two categories of condos that you can go for: executive condominiums (ECs) or private condos. Under private condos, there’s a further subset of either leasehold or freehold options. Generally, ECs tend to be more affordable, but private condos tend to have better build quality.
One tip here is to also look at past projects by the developer—are they known for quality and timely delivery? This may or may not be a big deal, but will nonetheless help you to evaluate your choice of condo projects in the market.
2. Identify a list of locations that you want to stay in
As with all property purchases, it is all about location, location and location. Apart from identifying the condo type or project that you’d want to live in, perhaps even more importantly is that you should nail down a list of estates around Singapore that you would want to live in.
If you’re buying an EC, you would effectively be ‘locked in’ to that location for at least 5 years due to its MOP. And even if private condo projects do not have that restriction, you wouldn’t want to keep moving every few years. Location is essentially quite a major decision that will affect you and your family’s lifestyle for a couple of years, and so it’s important to envision if your chosen location is feasible for your needs.
Ask yourself a couple of key questions:
- Will you be okay with staying here for the next few years?
- Work-wise, is the commute to and from your workplace something you can manage?
- Will you need to stay near your parents for caregiving obligations?
- Are there adequate amenities in the vicinity to suit your needs (e.g. availability of childcare or preschools for young children)?
These are some of the things to think about when assessing the feasibility of a property’s location.
Image credit: Pasir Ris 8, Bagnall Haus
Take, for example, Pasir Ris 8 and Bagnall Haus, two condo projects in the East.
To many, Pasir Ris 8 might seem the more obvious choice, due to its proximity to an MRT station, shopping mall, bus interchange, and the multitude of amenities in the area. While that may be true, one potential downside is that the surrounding area is busy, with plenty of human footfall and hustle and bustle, with buses and cars up and about, and the MRT rolling in and out of the station nearby.
Bagnall Haus, on the other hand, is much better if you are looking for something serene and quiet, with its proximity to East Coast Park. Also, its location isn’t that ideal due to the lack of good public transport connectivity, but this won’t be so much of a problem if you drive.
It’ll also be useful to have an idea of your own personal lifestyle plans in the future, which will affect your property purchasing decisions. Take for example Aurea at Golden Mile━it is a fantastic luxury condo at the former Golden Mile Complex, which is a great prime location especially if you work in the CBD. But if you plan to have children in the future, it may not be the best choice for you due to the lack of schools nearby.
Image credit: Urban Redevelopment Authority
One other useful thing to do would be to study the URA Master Plan and assess the locations that you have shortlisted, Wahidah suggests. Studying the URA Master Plan is essential as it reveals upcoming developments such as new MRT lines, business hubs, and lifestyle zones that can drive future price appreciation and rental demand. This helps identify areas with upcoming developments and its potential for price appreciation.
Conversely, it will also help you to identify potential noise or overcrowding issues, and ensure your chosen location aligns with your lifestyle or investment goals. By understanding planned changes in land use, connectivity, and amenities, you can future-proof your purchase and avoid unpleasant surprises after buying.
3. Do a finance health check, and avoid overcommitting
As we’ve mentioned, property purchases are a big commitment because of the money involved, especially if you’re upgrading from a HDB to condo. So it’s integral that you do your homework and chart out your finances to assess what kind of condo you can afford.
Here’s a broad outline of the expenses that you can expect. Based on a condo’s selling price, the first hurdle is the downpayment, which refers to the upfront cash that you will have to put up upon signing the Option to Purchase (OTP) or Sales & Purchase Agreement (SPA) for the condo. Of course, the timeline may vary depending on the terms that you’ve negotiated with the seller.
The exact amount of downpayment largely depends on the Loan to Value (LTV) limit, which is the maximum amount a bank can lend you when you apply for a loan. Most of the time, the LTV limit is 75%; in some cases it is 55% if the loan duration surpasses 30 years, or if the loan term extends beyond when you turn 65.
Therefore, the minimum cash upfront downpayment that you’ll have to put in is 25% of the selling price, assuming the most common 75% LTV. That 25% comprises a whole host of things such as option fees, exercise fees, Buyer Stamp Duties, and even legal fees for the processing of paperwork.
Assuming a 25% down payment, at least 5% has to be in cash, while the remaining amount can be covered with either cash or CPF. At this stage, you need to think about your financial health. On one hand, a larger down payment will lower your total loan amount making it a bit more comfortable over the years. On the other hand, a smaller down payment can help you keep cash to fund future expenses like renovation, or even emergency savings.
To get a sense of the loan packages available, feel free to visit any bank to get a quote and compare across banks. Generally, a higher loan quantum and/or longer term duration will mean lower interest rates.
Wahidah also cautions against overcommitting to a property purchase, which is a common pitfall by many. While charting out your financing plan, it’s also important to factor in a small ‘buffer’ to accommodate any unforeseen circumstances as far as possible, such as rising interest rates or even potential changes to your income. This means not maxing out your loan eligibility, or even overreaching for that condo project if you cannot afford it.
Overstretching yourself can lead to financial stress. As such, she advises to always maintain a safety buffer and ensure your monthly repayments remain manageable even if interest rates increase or your income decreases.
If you are thinking of purchasing an existing condo unit (i.e. not from a developer), then it’ll also be useful to do some research on recent prices of similar units in the development or surrounding condos. Use tools such as URA’s portal or property listing portals such as PropertyGuru and 99.co. This gives you a realistic sense of market value, and helps you avoid overpaying for a unit in the market.
Another critical thing to think about when evaluating a condo project are the maintenance fees that you will have to pay monthly. Monthly maintenance fees vary widely across condos and can affect their long-term affordability. Don’t simply be wowed by condos that have ultra-luxury offerings and benefits, as high-end developments with many facilities like a concierge, large pools, and sky lounges tend to have higher maintenance fees, which are funded by residents.
4. Nothing beats an in-person observation on-site
Image credit: Condos and Commercial Spaces in Singapore
One of the biggest benefits of new launch condo projects is the showflat that developers will put up prior to sale. Interested buyers can visit the showflat to preview the property, as well as have a walkthrough of how the layout of units will look like. Depending on the location of the condo, the showflat may also be on the exact site of the development, which will give you a sense of its accessibility, traffic conditions nearby, and amenities in the vicinity.
If this is your first time in the market for a condo, then it’s highly recommended that you head down to several showflats to get a sense of the ins and outs of condo living, as well as to speak to the agents on-site for more information and insights about the projects. Feel free to ask all the questions you want so that you can get a better feel of the development, including how the prices vary from unit to unit━even within the same condo, units of the same size are not necessarily the same price.
On the other hand, if you are thinking of buying an existing condo unit, then Wahidah recommends actually going down to the condo and having a walk around. This means not just the unit you are interested in, but also around the condo estate and the surrounding neighbourhood. She recommends visiting at different times of the day to gauge things like traffic, noise, the usage of facilities, and more.
5. Identify the layout that best suits your family
Image credit: Pasir Ris 8
Another consideration in choosing the right condo and unit for you is to do a comparison of layouts across projects. This goes beyond simply looking at the total floor area, Wahidah says. For instance, a 1,000sqft unit with a bad layout may feel smaller than a 900sqft unit with an efficient layout. Try to avoid units with long corridors, odd corners or even odd shaped rooms, because this would essentially lead to wasted space, plus it might be harder to furnish the rooms efficiently.
A factor that you should also take into account is the orientation of the unit: because most of us generally head out to work in the morning and only return in the evening, East-facing units aren’t as bad because we’re not in when the morning sun hits. However, West-facing units may get the brunt of the harsh afternoon sun, which warms up the unit, so you might have to turn on your fan or aircon to cool the home down when you return in the evening.
Of course, height is always a factor; higher floors generally have better views and less noise, but also come at a premium. Units on lower floors are cheaper, but they’re usually noisier. In the case of condos, ground floor units are typically the cheapest, and they come with perks such as additional floor area in the form of a Private Enclosed Space (PES), but the tradeoff is certainly privacy, given that other residents can look into your home every time they walk past.
As we’ve mentioned above, it is always a good idea to visit the unit in person to get a feel of the light, airflow, and potential noise levels for existing condo units.
6. Think about your exit strategy
Unless you plan to live in that condo forever, it wouldn’t hurt to also think about your medium-to-long term plans for your home, says Wahidah.
For instance, if selling your condo is on the cards in the future, then thinking about its sellability is something to also consider before you buy it. Basically, plan your exit strategy━how easily you can sell or rent it in the future. Properties with strong resale value, such as freehold condos or well-located leasehold units near MRT stations and amenities tend to be more liquid. Good accessibility, nearby schools, and areas with strong rental demand also improve future marketability.
Studying the URA Master Plan will also come in handy for situations such as this━to assess the long term transformation plans of the estate. By getting a sense of what the government has in store for that particular estate or location, for example future MRT stations and the carving out of more residential estates, you will be able to see how much a particular condo’s marketability will improve in the future, boosting its chances for an appreciation in value and demand.
Choosing the right condo as a first-time buyer
Taking these points into consideration will help you to make a more informed decision when it comes to this really big and important purchase. Condominium-living may be a dream come true for some, but it also comes with a great deal of commitment and cost, so take the time to think about both your short- and long-term plans before you sign on that dotted line.
See more condo reviews & articles here:
- Otto Place executive condo review
- 8 must-know CCR condo launches in 2025
- LyndenWoods condo review
- Lentoria condo review
- Why we chose a leasehold condo over a freehold one
Cover image adapted generated with SORA, PIU Interior Design
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