Buying Your First Home: 5 Misconceptions Gen Z Singaporeans Have Debunked

Cheryl Chiew
Buying Your First Home: 5 Misconceptions Gen Z Singaporeans Have Debunked
When you mention “Gen Z Singaporeans”, the stereotype that comes to mind is teens still schooling or dancing to the latest TikTok trends. It’s easy to forget those born after 1997 are full-grown adults in their early twenties.
They’re fast approaching or at the age where they work full-time jobs, pay taxes, marry and buy property. Millennials and those who are a little older will remember how tedious and confusing it was to apply for a BTO or compare whether to purchase resale HDB flats or not.
To welcome these newly-minted adults to the wonderful world of property, we asked 11 Gen Z-ers what their fears and misconceptions surrounding buying their first homes are and answered them.

1. Applying for a House is Too Difficult

It’s not surprising, but for Gen Z Singaporeans, their number one issue with buying a home is that the application process puts them off. When we spoke to them, the words “daunting”, “arduous”, “complicated” were sprinkled around more liberally than Salt Bae seasoning his meats.
On top of that, others, like Anne, 20, confess that they’re unaware of the various payment options.
Anne shares that she only knows about the Central Provident Fund (CPF) and says, “Even that—I don’t know how to pay via CPF!". Hannah Lee, 21 and Zachary Lim, 22, agree.
What we say:
When you buy a home, you need to learn a whole new set of vocabulary and acronyms: HDB HLE Application, Loan-to-Value (LTV) ratio, In-Principle Approval (IPA)… And while the information on how to apply for housing is available online, there’s a lot to take in, so we totally understand your confusion.
What you can do is start by reading general guides. The internet is your friend, and more websites are creating ultimate guides on the most updated property application processes. For example, if you’re thinking of applying for a BTO, you can start with these articles:
There are many links, so make some time over a weekend or two to go down the rabbit hole and read up on all the information you need! If you need help with home loans, ask one of our friendly home loan advisors to guide you through the process.

2. Paying for the House Requires a Lot of Money I Don’t Have

Aside from finding the housing application process overwhelming, Gen Z-ers like Hannah and Michelle*, 24, are concerned about how they’re going to finance their homes.
For Michelle, she’s worried about housing affordability due to rising housing prices. On the other hand, Hannah is bothered by how she might be unable to afford a home in an area she wants as she finds resale flats too expensive.
She says she’s concerned about having to compromise on a good location (due to high prices), as “certain areas which are deemed ideal are often more expensive".
What we say:
What goes up must come down, unless they’re property prices in Singapore. For legal reasons, that was a joke. While it’s true that property prices have picked up over the years, it’s not all doom and gloom.
For example, you and your partner decided to apply for and got a 3-room MacPherson Weave Geylang BTO during the May 2021 launch. The flat costs at least $343,000 and is slated to be ready in five years.
$343,000 is a scary number but hang on, listen.
Let’s say both of you earn $3,000 a month, don’t receive any year-end bonuses, and save $500 a month. In five years, you would have accumulated:
How Much You Have
($3,000 x 37% x 5 = $66,600)
($500 x 12 x 5 = $30,000)
How Much Your Partner Has
($3,000 x 37% x 5 = $66,600)
($500 x 12 x 5 = $30,000)

So here’s how you reassure yourself: key in those numbers into online tools like our
Mortgage Affordability calculator.
Let’s assume you take a bank loan for 75% of the property’s price, with the remaining 25% paid upfront as downpayment.
The downpayment can be split into two components, cash and CPF. You are required to pay at least 5% in cash, and that’s $17,150. From the looks of your cash savings above ($60,000), this should be manageable.
The minimum cash downpayment is 5%, but this is only possible if you have enough CPF savings to cover the rest. 20% of the property’s price ($343,000) is $68,600. Again, assuming that both of you have managed to accumulate over $133,000 in your CPF OA, you’re good.
Finally, based on an interest rate of 3.5% and a tenure of 30 years, your monthly mortgage instalments are expected to be $1,288. That means you only have to fork out $644 each for your home every month, and this amount can be deducted from your CPF savings.
Now, that didn’t look too intimidating, did it? If you need more guidance planning your finances, you can also arrange a free consultation with our home loan advisors.
If you want a grand wedding and an extreme renovation makeover for your house, either save more or go for a cost-friendly option.
One thing to remember is you don’t have to get a large house on your first try! When you’ve earned more or plan to expand your family, you can buy a larger resale unit or private property after the 5-year MOP is up.

3. Applying for a BTO Flat Puts Pressure on My Relationship

So applying for a BTO is the best way to get affordable housing in Singapore. But there are a few problems with this.
First, you might not get a BTO flat due to over-subscription. Second, going for a BTO means having to plan your life against a construction timeline. There’s also a sentiment that BTOs are challenging to obtain and ballot for, which pushes many young couples to apply earlier.
Xinhui, 22, summarises these concerns succinctly, “If I apply [for a BTO] earlier, that means I’d be more likely to get more chances and have more time to get a place. But it also puts pressure on my relationship. How far along in my relationship should we be before it’s ok to apply for a house together?”
There are others like Amanda*, 21, who asks, "I am afraid of the possibility of separating with my partner years into my BTO. What do I do then?"
What we say:
If applying for BTO feels like too much pressure on your relationship, maybe that’s a sign you and your partner shouldn’t do so yet. It’s okay not to take the conventional BTO route when buying your first home! You can always look for a resale flat or balance flat when you’re ready to settle down.
And don’t worry about not being able to finance it. Marrying later in life means you’ve probably been in the workforce for longer. That means you probably have more money in your CPF. So long you’re not blowing your entire monthly paycheck, you probably will have some cash savings, which will put you in a better position to plan ahead.
If you want to experience living together before marriage, try renting an apartment together. While this is a more expensive, short-term housing solution, renting has its benefits too. You can experience co-living with a partner and assess your compatibility without taking on a huge financial commitment.
If you’ve applied for a BTO flat with your partner and break up, it’s not the end of the world. Forfeiting a BTO flat is more common than you think. You can always discuss your options with HDB on what to do with your flat. Money is important and losing it sucks, but there’s no price you can put on your happiness.
Ultimately, take it one day at a time and make a property decision that makes the most sense for you.

4. The Existing Housing Policy Doesn’t Address My Needs

Gen Z is the most diverse generation. There is a growing section of young Singaporeans who are:
  • Pursuing alternative forms of employment (which affects their CPF contributions and makes it trickier to apply for home loans)
  • Marrying foreigners
  • LGBTQ+
  • Single and don’t intend to marry (and if they do, it’s only much later)
When interviewed, many of them felt that the existing housing policy does not address their needs and applying for housing in Singapore is more complicated for them because of that.
Pursuing alternative forms of employment
More Gen Z-ers, like Nina, 22, are pursuing freelance work, are self-employed and/or pursuing digital investments like cryptocurrencies as they recognise how current work systems might no longer serve them. For Nina, she wonders if it’s cheaper to keep renting or “to have CPF and buy a house.”
“When paying for a purchased apartment (e.g. HDB), we would need to ensure that we are always working so that the CPF contribution is continuously sufficient to sustain the house. Which to me, is the same concept as renting a long lease and paying rent monthly,” Nina adds.
Marrying foreigners
Inter-ethnic and transnational marriages have been rising, with transnational marriages between a Singaporean and non-citizen holding steady at 30% to 40% since 1996. What worries people like Jannis Lim, 22, is that it’s “difficult to apply for a house if your partner isn’t Singaporean.”
In the US, 1 in 6 Gen Z adults identifies as LGBTQ. While there are no official records kept on a person’s sexuality in Singapore, you only have to scroll through social media apps to see how more young people are okay with coming out, discussing gender fluidity or talking about LGBTQ+ issues. For people who are gay like Ryan*, 23, the biggest question is, “How do I go about buying a home as a gay person?”
Single and don’t intend to marry (and if they do, it’s only much later)
There has been a growing cultural shift where millennials are moving out before marriage, and Gen Z is paying attention. With Singaporeans marrying later, more are looking for a space to call their own by their mid to late twenties. Some don’t see marriage in their cards at all, which disadvantages them when making home-buying decisions as young adults.
Kelly Hui, 21, agrees and adds, “The idea of staying with parents is still embedded, especially if you don’t have a partner. So that delays the housing conversation amongst Gen Z.”
What we say:
The Singapore public housing model isn’t perfect. Their goal is to provide as many Singaporeans as possible with a roof over their heads. And with finite resources, it’s clear where housing priorities lie.
But the Singapore government has been gradually updating housing policies to recognise the changing needs of the population. It’s far from perfect, but there’s more breathing room than there was a decade or two ago.
Should you be a freelancer, there are ways to getting a home loan. Income ceilings for grants have been raised and there are more choices for buying a home as a Singaporean-Foreigner couple. LGBTQ+ couples have limited, but some, housing options.
Public housing policy for singles has also come a long way, from completely excluding unmarried individuals to allowing those aged 35 years and above to apply for 2-room Flexi BTO flats and/or buy resale units.
Change doesn’t happen in a day, but we’re optimistic that we’re going in the right direction. Hopefully, housing policies will be continually adjusted to address the needs of everyone who lives in Singapore.

5. BTO Flats and Houses Are so Small Nowadays

The last concern Gen Z Singaporeans have is the size of BTO flats. Like Bryan Lee, 20, many Gen Z-ers have observed that BTO houses are much smaller than HDB flats built in the 90s and 80s.
What we say:
There seems to be an assumption that your first house should be your forever home. Maybe that’s why the younger generation is quite concerned about flat sizes. But we get it. The size of your house will affect your quality of life (like how WFH culture and staying home most of the time has affected the demand for larger housing).
If a big house is a must-have for you, perhaps you can look at property in non-mature estates and OCR neighbourhoods for their lower price points and larger-sized units. If not, you can always purchase a smaller home and upgrade when you’re in a more financially secure position.

Fears About Buying Your First Home Are Valid

Gen Z Singaporeans’ fears about housing aren’t too different from any young adult’s throughout the years. Jumping through legal hoops, sorting out your finances and applying for a home are intimidating processes.
A challenge we foresee is how housing policies will adapt to address the needs of an increasingly diverse group of people and keep housing affordable. If you’d like to share with us how you feel, take part in our Consumer Sentiment Study and stand a chance to win up to $2,000 worth of prizes.
If you’re a young person worrying about buying your first home, it’s okay to feel anxious. But take it one step at a time. Drop a question on the AskGuru forum to have experts answer your queries. Read and consult guides. There’s always someone to lend a helping hand along the way.
*Pseudonyms were used for respondents who have indicated they want to stay anonymous.
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More FAQs about Buying Your First Home

This depends on how much your house costs. Use our Mortgage Affordability calculator to get an estimated breakdown,

If you’re not going down the BTO route, you can look at resale HDB flat or private property listings.

This depends on whether you're taking a bank loan (at least 25% of the purchase price; of which a minimum of 5% must be cash, the rest can be paid using CPF) or an HDB loan (at least 10% of the purchase price using cash and/or CPF).

Aside from not spending more than you have, read our article on millennials sharing their experience of buying a home for the first time for more tips.