4 Things I wished I knew as a First-Time Resale Home Buyer


The property market has been on a serious uprise.

With the delay in BTO projects, securing a first home has become tricky for many couples. 

Today’s article is a contributor piece from a newlywed couple buying their first property. 

These are the top things they wished they knew as first-time home buyers. 

This article was written by a Financial Horse Contributor.

Here’s what I wished I knew as a first-time resale home buyer

In 2023, my wife and I started researching resale properties for our first home.

We were 28 and had spent the previous two years unsuccessfully balloting for BTOs and SBFs. We entered the quarterly “lucky draw” — and finally got it in June.

Everything was great except for the timeline. The HDB would only be ready in five years. We’d be 34 by then. 

After much deliberation, we decided to forego the HDB because the opportunity cost was too high. We didn’t want to live in my parents’ house for so long. We ruled out renting because the sky-high prices would wipe out any gains from selling the BTO. In the 10 years it would take to construct the HDB and reach the MOP, we’d also missed an entire property cycle.

That led us to start our resale home journey.

With resale, there’s an overwhelming number of choices.The first purchase would also be one of the biggest investments of our life.

We spent months figuring out the home-buying process, from loans to property types and budgets. 

I saw many friends in the same situation: couples in their late 20s and early 30s who missed the BTO boat and are entering the resale market.

If I could go back in time, these are things I wished I considered, which would have sped up the process significantly. This includes:

  • Is 2024 a good time to buy property?
  • Is it a good idea to buy a resale property in 2024?
  • How to decide on the type of property to look for?
  • How much to spend on a property?

I’m not an expert, I’m just sharing my experience as a first-time resale home buyer. 

Is 2024 a good time to buy property?

I didn’t keep up with property news before I started looking for homes. I wanted to understand the market before diving in.

Property Guru’s 2024 market outlook report summarised it well.

In the first six months of 2023, the government made a series of property announcements and introduced new cooling measures. The Budget 2023 statement included a Buyer’s Stamp Duty (BSD) increase.

Shortly after in April 2023, property cooling measures comprising Additional Buyer’s Stamp Duty (ABSD) hikes were announced…

Interest rates were another major homeownership factor in 2023. While the US Fed rates did not move as aggressively as they did in 2022, they remained high across the year; the latest December 2023 US Fed meeting concluded with US Fed interest rates benchmarking at 5.25% to 5.50%. Concerns around inflation, the possibility of mortgage rates going up, and uncertain economic conditions resulted in some property seekers temporarily retreating from the Singapore property market.

These trends suggest a down market, but there are signs of positivity.

The recent Fed meeting in March predicted rate cuts this year. The federal funds rate may drop to 4.6% by year-end. This will lead to lower interest rates for home loans in Singapore.

Singapore’s economy is projected to maintain consistent growth. With the economy doing well, this means homeowners might feel more confident to maintain their asking prices.

Is resale better than a new launch?

It took a while to accept a resale property as our first home. BTO felt like a rite of passage for every Singaporean.

Were we impatient and short-sighted by wanting a property where we could move in immediately? If we got a resale, would we lose out on potential gains from a BTO or new launch?

After speaking to agents and doing research, we realised the answer wasn’t definitive.

Stacked Homes tested the belief that new launches are better for gains.

Resale properties can be profitable for young buyers if you pick a location with a long lease and growth prospects.

Most transaction types saw gains of over 10% – the highest for those who bought new and sold before TOP, and those who bought resale. 91% of resale-to-resale transactions were profitable.

2024 might be a good time to buy a newly completed resale home

We focused on newly completed homes because we wanted properties with the longest lease and to minimise renovation cost.

The good news is there’s a large supply this year.

Around 20,000 units received Temporary Occupation Permits in 2023, excluding ECs. An additional 9,636 units are expected to be completed in 2024, with 12,546 units or 42.4% in the OCR.

The supply will drop in the coming years. The number is expected to drop to approximately 5,492 units in 2025 and 6,896 units in 2026 from around 10,000 new completions this year.

With decreased supply, potential buyers may have to pay more for a newly completed resale home in the coming years.

What do you want in a property?

Determining your perfect home involves so many factors.

First, clarify your purpose for the property.

The first question our agent asked was: “Is it for homestay or investment”?” In other words, is it a place to live in or for resale/rental?

This can influence the property you buy. Everyone wants a house that checks all the boxes at a good price and makes a profit when sold.

Trade-offs are inevitable. Knowing your non-negotiables and nice-to-haves will make your search easier.

A “forever” home could be an older-lease four-room HDB in a mature estate. You’d get the perfect house with all the amenities, but you may struggle to sell it in the future due to lease decay. You could choose a location for its potential gains, even if it doesn’t fit your criteria.

It’s good to plan for the long term and have an exit strategy regardless of your choice.

If you plan to have kids, consider a bigger space or properties near a preferred primary school. What about childcare arrangements? Can you easily commute to your parents’ house from the property?

Choosing homes with better potential for resale or leasing gives you more options in the future.

Related: Are new condos a good investment? How to pick the best BTO Unit? Interview with Stacked Co-founder (Adam Wham)

How much should I spend on my first home?

Two things determine how much you should spend on your first home.

How much can you spend and how much should you spend?

Loan-to-Value (LTV), Total Debt Servicing Ratio (TDSR), and Mortgage Servicing Ratio (MSR)

These are three important terms to determine your home loan amount.

The loan-to-value (LTV) Ratio determines the maximum housing loan amount. In Singapore, the maximum LTV is 75%. For example, a property valued at $1 million has a maximum loan amount of $750,000.

The Total Debt Servicing Ratio (TDSR) constrains your budget by determining how much you can borrow. The TDSR is capped at 55% of your gross monthly income.

If you’re buying an executive condo (EC) or HDB, you’re subject to the Mortgage Servicing Ratio (MSR), which caps the amount you can borrow at 30% of your gross monthly income.

LTV, TDSR and MSR are guardrails to prevent home buyers from overextending. But it doesn’t mean you should maximise your borrowing.

Follow the 3-3-5 rule to set your budget

The 3-3-5 rule is a simple framework to set your housing budget.

  • Have enough cash or CPF to pay at least 30% of the purchase price to cover the downpayment and other expenses.
  • Your mortgage payments shouldn’t exceed 30% of your combined gross monthly income.
  • The total purchase price should be no more than 5 times your combined annual income.

Consider the total costs of home ownership (many people forget these additional costs!)

Besides the selling price, there are other important costs to factor in. 

Budget for other costs such as:

  • Duties and fees
    • Stamp duties, agent fees
  • Renovation expenses
  • Recurring costs
    • utilities, maintenance fees, property tax, and home insurance
  • Emergency funds
    • savings of six months’ worth of expenses and mortgage payments
  • Unexpected expenses
    • home repairs 
Source: SingSaver

Final Thoughts

When we started the home-buying process, we didn’t know what we didn’t know.

Upon reflection, we learned a lot through trial and error, and hopefully this will help others in their home buying experience. 

Check out more useful articles in FH’s property series!

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