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Should  you buy or rent a home?
20 Aug 2025

Should you buy or rent a home?

By Jermaine Koh

If you’ve only got a minute:

  • Buying a home offers long-term stability and investment potential while renting provides flexibility and higher liquidity.
  • Assess your financial capacity, including the ability to afford upfront costs and ongoing expenses for homeownership.
  • Factor in your future plans and lifestyle preferences when considering whether to buy or rent a home.

In 2024, Singapore’s property market saw contrasting shifts across rental and purchases. As we move further into 2025, the rental market is easing from its previous highs into steadier growth, while the purchase market continues to inch upward, although property purchases are seen to be cautious driven by an uncertain economic environment.

Whether you’re a potential homeowner considering a major investment or a tenant who values flexibility, understanding the main differences between owning and renting is essential to make the best housing decision based on your situation.

Rental market outlook

Private residential rents stabilised in late 2024, after nearly a 2% annual decline, before rebounding modestly in early 2025 with increases of 0.4% in Q1 2025 and 0.8% in Q2 2025.

HDB rentals also showed growth, supported by rising rental and more flats leased in Q1.

Looking ahead, economic uncertainties such as slower expat hiring may temper rental demand, especially in the private sector. However, a tightening supply of completed homes combined with easing interest rates may help to cushion any sharp declines in rental prices.

Industry experts generally expect Singapore’s reputation as a stable and attractive market, especially amid global economic uncertainties, to continue to draw demand for rental properties – particularly high-end homes in prime locations.

As new completions remain low in key districts, landlords can potentially expect steady rental growth over the next 2 years.

Home purchase market outlook

Singapore’s home purchase market remains resilient, though growth has moderated in recent months. Private residential property prices rose by about 1% in Q2 2025, continuing steady gains from earlier quarters.

URA noted that landed homes outperformed other segments, with stronger price growth compared to non-landed properties. The Core Central Region (CCR) saw the most notable rise, with prices up around 3%, reflecting strong demand amid limited new supply.

Public housing resale prices continue to hold firm. The HDB resale price index increased by approximately 0.9% in Q2 2025, indicating steady demand despite a slower pace compared to previous quarters. Resale transaction volumes also rose slightly, showing ongoing buyer interest.

Looking ahead, industry experts expect modest private housing price growth of 3-4% for 2025. This outlook is supported by limited new supply in desirable areas and consistent buyer interest. Cooling measures and interest rate pressures are also helping to temper speculative demand, promoting a more balanced market outlook.

In the HDB segment, demand is anticipated to stay robust due to limited BTO supply and ongoing affordability considerations. While resale price growth may be slow, public housing continues to play a vital role in Singapore’s housing landscape.

Ultimately, the decision to buy or rent a home in Singapore is influenced one’s personal financial situation, lifestyle, and long-term goals.

Here are the pros and cons of each option.

Buying: Building wealth and stability

Pros

Cons

Long-term security and stability

High upfront costs (down payment, stamp duty, etc.)

Potential property appreciation

Long-term financial commitment (25-30 year mortgage)

Building wealth through equity

Market volatility risks

Potential retirement income source

Maintenance and repair responsibilities

Freedom to personalise and renovate

Eligibility restrictions (especially for HDB flats)

Legacy for future generations

Less flexibility to relocate

Protection against rent increases

Property taxes and insurance costs

Potential rental income

Potential for negative equity if property values decline

 

Homeownership provides stability for families, allowing children to grow up in a consistent environment. It also offers financial benefits such as protection against rent increases and the potential for rental income. You can also renovate, design and personalise your home as you wish.

For retirees, a home is a valuable asset, providing options for income through renting out the home or rooms, right-sizing to a smaller home or selling a portion of the lease back to the government via the lease buyback programme.

However, the decision to buy a home comes with significant challenges such as high upfront costs, long-term financial commitment, market volatility risks and potential eligibility restrictions. You should carefully evaluate your personal circumstances, financial capabilities and long-term goals before committing to buying a home.

Should you buy or rent a home in Singapore?


Renting: Freedom and flexibility

Renting a house comes with its own set of advantages that can make it an appealing option for many people.

Pros

Cons

Lower initial financial outlay

Lack of wealth creation through property ownership

Flexibility to move or change locations

No equity building

Avoid maintenance and repair costs

Potential for regular rent increases

Predictable monthly expenses

Housing insecurity (lease non-renewal, property sale)

Access to areas you might not afford to buy

Limited control over property modifications

No exposure to property market risks

Missing out on potential property appreciation

 

Renting offers financial flexibility, higher liquidity and reduced responsibilities, providing easier access to housing with lower initial costs and the ability to relocate easily. You can avoid maintenance fees and enjoy more predictable monthly expenses, making it an attractive option, especially if you value mobility.

However, renting comes with significant long-term drawbacks, including no wealth creation, potential housing insecurity and missed opportunities for property appreciation. The lack of equity building and vulnerability to rent increases make renting less financially advantageous compared to homeownership.

Should you buy or rent a home in Singapore?

Comparison of buying vs renting a 4-bedroom HDB flat in Bishan

Rent

Renting

One-off costs

S$7,000

Deposit (usually 1 to 2 months)

 

 

 

Recurring costs

 

Rent

S$3,500

 

The median rental price of S$3,500 represents only the base monthly rent. This figure does not include additional living expenses.

These supplementary costs can vary significantly depending on your lifestyle, personal preferences, and consumption patterns. You should factor in these potential variations when budgeting for rental accommodation, as they can materially increase the total monthly housing expenditure.

Buy

Property price: S$730,000 (Q32024 4-room HDB flat median resale price)

Buying

One-off costs

 

Downpayment (25% of property value)

S$182,500

HDB loan: Cash and/or CPF

Bank loan: 5% downpayment in cash only

Recurring costs

 

Mortgage repayment (assuming interest is 3.75% p.a. and 25 years bank loan tenure)

S$2,815

 

It is important to note that the monthly mortgage repayment (bank loan) of S$2,815 represents only the base loan repayment and does not include additional homeownership expenses.

Legal fees, stamp duty, property tax, insurance, maintenance charges, renovation, home insurance, utilities and broadband services can significantly increase the total cost of owning a property. 

Although the monthly cost of buying a home appears to be slightly lower than renting in Bishan, with a difference of about S$685/month, the abovementioned costs can add up to a substantial amount each month, potentially making the total monthly cost of ownership higher than renting.

When buying a home, you can use your CPF OA contributions to offset mortgage payments instead of cash. In contrast, rent is deducted from your take-home salary after CPF deductions.

This difference in payment methods can result in homeowners having more disposable income compared to those who rent, despite similar housing costs.

Should you buy or rent a home in Singapore?

So, what’s the verdict?

When considering whether to buy or rent, different profiles may find one option more suitable than the other.

Here's a breakdown of who might be better suited to buy or rent:

Buying

Renting

Stable income earners

Individuals with secure, long-term employment and a steady income are well-positioned to manage mortgage payments and maintenance costs.

Career nomads

Professionals anticipating job changes or relocations in the near future might find renting more flexible.

Long-term planners

Those intending to stay in Singapore for more than 5 years can benefit from potential property appreciation.

Short-term residents

Expatriates or individuals planning to stay in Singapore for less than 5 years may find renting more practical.

Family-oriented individuals

Couples planning to start a family or those with children may prefer the stability and customisation options that come with homeownership.

Young professionals

Singles or young couples still exploring career options and lifestyle preferences may benefit from the flexibility of renting.

Financial optimists

Those confident in Singapore's economic growth and expecting interest rate cuts in 2025 might find it an opportune time to invest in property.

Market watchers

Individuals who are uncertain about future property trends or interest rates might choose to rent while monitoring the market for better buying opportunities.

 

Should you buy or rent a home in Singapore?

Remember, there’s no one-size fits all answer. Take the time to crunch the numbers, consider your lifestyle and future plans and don’t be afraid to seek advice from financial experts or real estate professionals.

Start Planning Now

Check out DBS Home Marketplace to work out the sums and find a home that meets your budget and preferences. The best part – it cuts out the guesswork.

Start Planning

Alternatively, prepare yourself with an In-Principle Approval (IPA), so you have certainty on how much you could borrow for your home, allowing you to know your budget accurately.

Apply In-Principle Approval

Disclaimers and Important Notice
This article is meant for information only and should not be relied upon as financial advice. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.