Rent or buy a home?

By Jermaine Koh

If you’ve only got a minute:

• Buying gives you stability and the chance to grow your wealth, while renting offers flexibility and preserves cash flow.   
• Consider if you’re financially ready for both the initial downpayment and ongoing homeownership costs.
• Your long-term plans and lifestyle should guide your decision.

In 2024, Singapore’s property market saw contrasting shifts across rental and purchases – rental prices began to cool, while property purchases maintained a cautious climb. As we head deeper into 2025, the rental market has shifted from last year’s highs to more moderate growth, whereas home sales continue to inch upward, albeit at a gentler pace amid economic uncertainties.

Whether you’re leaning towards buying a home for the long haul or renting for the freedom to move, it’s worth understanding the trade-offs so you can make a choice that fits your life stage and priorities.

Rental market outlook

After dipping almost 2% over the course of 2024, private residential rents steadied towards the year’s end and posted a modest rebound in early 2025 – up 0.4% in Q1 and 0.8% in Q2. HDB rentals also trended upward, driven by rising rental rates and more units being leased in the first quarter.

Looking ahead, demand in the private rental market may soften slightly, especially if slower expatriate hiring takes hold. Even so, limited housing completions and easing interest rates could help keep prices from falling sharply. Singapore’s reputation as a safe and stable hub continues to draw interest, particularly in the luxury segment and prime districts.

With fewer new launches in high-demand areas, landlords may still see steady rental growth in the medium term.

Home purchase market outlook

On the buying front, the property market remains steady, though price growth has been more measured recently. In Q2 2025, private home prices rose about 1%, extending the slow upward trend from earlier in the year. Landed properties were the top performers, with the Core Central Region (CCR) leading the pack at roughly 3% growth, driven by demand and limited new supply.  

HDB resale prices have also remained resilient. The resale price index grew by about 0.9% in Q2 2025, with transaction volumes ticking slightly upward – a sign that buyer interest is still healthy, even at a slower pace.

The outlook across both renting and buying suggests slower, steadier pace of growth heading into 2025.

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

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.

Renting: Freedom and flexibility

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

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.

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

Rent

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)

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.

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:

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.

Ready to start?

Check out 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.

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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.