Executive Summary

Co-buying property in Singapore faces unique structural barriers compared to Western markets. While 32% of Gen Z Americans consider co-buying with friends, Singapore’s regulatory framework—particularly ABSD and HDB eligibility rules—makes non-family co-ownership economically challenging. This case study examines real scenarios, market outlook, viable solutions, and broader economic impacts.

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CASE STUDIES

Case Study 1: The Tech Professionals

Profile: Rachel (30) and Marcus (32), both software engineers earning SGD 9,000/month each

Objective: Purchase a 2-bedroom resale condo in Tampines for SGD 1.5 million

Financial Analysis:

Property Price: SGD 1,500,000
Down Payment (25%): SGD 375,000
Loan Amount (75%): SGD 1,125,000

Stamp Duty Breakdown:
- Buyer's Stamp Duty: ~SGD 43,600
- ABSD (20% each, 2nd property): SGD 300,000 each = SGD 600,000
Total Upfront Costs: SGD 1,018,600

Monthly Costs:
- Mortgage (25 years, 3.5%): SGD 5,625
- Maintenance fees: SGD 350
- Property tax: SGD 200
Total Monthly: SGD 6,175 (SGD 3,088 each)

Outcome: ABANDONED

• Both already own HDB flats (bought separately earlier)
• SGD 600,000 ABSD made the purchase unviable
• Even with combined income of SGD 18,000, couldn’t justify the premium

Lesson: ABSD is a decisive barrier for non-first-time buyers, even with strong incomes

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Case Study 2: The Multi-Generational Solution

Profile:

• Jenny (35, marketing manager, SGD 7,500/month, single)
• Her parents Mr. & Mrs. Tan (both 58, combined retirement income SGD 3,000/month)

Objective: Purchase 3-bedroom resale EC in Sengkang for SGD 1.2 million

Structure:

• Jenny: 70% ownership, primary loan holder
• Parents: 30% ownership, cash contribution only (age limits loan eligibility)
• All are first-time private property buyers (parents sold HDB flat)

Financial Analysis:

Property Price: SGD 1,200,000

Jenny's Contribution (70%):
- Down Payment: SGD 210,000 (from CPF + cash)
- Loan: SGD 630,000 (75% LTV on her share)
- Monthly Payment: SGD 3,150 (manageable on her income)

Parents' Contribution (30%):
- Cash: SGD 90,000 from HDB sale proceeds
- CPF: SGD 120,000 from HDB refund
- No loan (due to age)

ABSD: NIL (all first-time private property buyers)
Total Upfront: SGD 450,000 + ~SGD 35,000 stamp duty

Outcome: SUCCESSFUL

• Parents moved into master bedroom, help with future grandchildren
• Jenny saves on childcare (planning to start family)
• Parents have secure housing in retirement
• Property appreciation benefits entire family
• Clear succession plan: Parents’ share goes to Jenny

Lesson: Multi-generational co-buying works when all parties are first-timers and have compatible living arrangements

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Case Study 3: The Creative Workaround

Profile: Four university friends (all 27-29, earning SGD 5,500-7,000/month)

Initial Plan: Co-buy 3-bedroom condo as investment Problem: Two already owned HDB flats = 20% ABSD each

Alternative Solution Implemented: Formed an investment club structure:

1. Created a formal partnership agreement
2. The two first-time buyers purchased property as joint tenants (avoid ABSD)
3. Other two contributed as “silent partners” with loan agreement
4. Legal documentation established:
   • Profit-sharing formula (25% each)
   • Exit clauses after 5 years
   • Monthly rental income distribution
   • Buy-out terms if someone wants to exit early

Financial Structure:

Property: SGD 1.3M condo in Bedok
- Two owners on title: 50-50 joint tenancy
- Two silent partners: Loan agreement at 4% interest
- Each contributing: SGD 82,500 cash + share of loan

Rental Income: SGD 3,800/month
Mortgage Payment: SGD 4,200/month
Net Monthly: -SGD 400 (SGD 100 each shortfall)

5-Year Projection:
- Property appreciation (15%): SGD 195,000 profit
- Rental income (60 months x SGD 3,800): SGD 228,000
- Less mortgage interest and shortfall
- Estimated profit: SGD 50,000-70,000 each

Outcome: OPERATIONAL (2 years in)

• Rental yielding 3.5% annually
• Property value up 8% in 2 years
• One silent partner planning to exercise buy-out in year 3
• Group maintains quarterly financial reviews

Lesson: Creative structuring can work but requires ironclad legal agreements and risk tolerance

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MARKET OUTLOOK (2026-2030)

Current Market Dynamics

Property Price Trends:

• Private property prices up 25% since 2020
• Average condo price: SGD 1,800-2,200 PSF
• HDB resale prices: 4-bedroom flats averaging SGD 650,000-850,000
• Landed property: SGD 3 million+ (inaccessible to most co-buyers)

Demographic Pressures:

• Marriage age increasing (median age: 30.8 for men, 29.3 for women)
• Singles comprise 20% of Singapore residents (growing segment)
• Gen Z entering workforce with high expectations but facing affordability crisis
• Sandwich generation (35-50 year-olds) supporting aging parents and young children

5-Year Outlook Scenarios

Scenario A: Status Quo (60% probability)

• Government maintains current ABSD levels
• HDB eligibility rules unchanged
• Co-buying remains niche solution for:
  • Multi-generational families (growing segment)
  • High-income first-time buyers only
  • Creative investment structures (limited)

Impact:

• 5-8% of private property purchases involve non-spousal co-buying by 2030
• Multi-generational living increases 15-20%
• Singles remain priced out unless high-income earners

Scenario B: Policy Relaxation (25% probability)

• Government introduces “co-buying exemptions” for verified long-term partnerships
• ABSD reduced to 10% for co-buyers meeting specific criteria
• HDB considers pilot program for non-family co-ownership

Impact:

• Co-buying could increase to 12-15% of transactions
• New financial products emerge (co-buying insurance, exit financing)
• Potential for abuse (speculative co-buying) leads to new controls

Scenario C: Further Tightening (15% probability)

• Government closes creative loopholes
• Enhanced scrutiny on loan agreements and partnership structures
• Additional cooling measures if property market overheats

Impact:

• Co-buying limited almost exclusively to traditional family units
• Increased migration of young professionals to rental market
• Growing wealth gap between property owners and non-owners

Key Market Indicators to Watch

1. HDB Wait Times: Currently 4-5 years for BTO flats. If this extends to 6-7 years, co-buying pressure increases
2. Singles’ Day (2031): When current 35-year-old singles can buy HDB alone. May reduce co-buying interest
3. Rental Yield Compression: If yields fall below 2.5%, investment co-buying becomes less attractive
4. Interest Rate Environment: If rates stay above 3.5%, co-buying for cash flow sharing becomes more appealing

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SOLUTIONS & RECOMMENDATIONS

For Policy Makers

1. Create a “Starter Home Co-Ownership” Framework

Proposal: Introduce a pilot program allowing two unrelated first-time buyers to co-purchase with reduced ABSD

Structure:

• Applicable only to properties under SGD 1.5 million
• Both buyers must be Singapore Citizens, first-time buyers
• Minimum 5-year holding period
• ABSD waiver or reduction to 5%
• Mandatory co-ownership agreement registration with HDB/IRAS
• Exit mechanisms: One party can buy out the other or both must sell

Benefits:

• Helps genuine first-time buyers access homeownership
• Maintains cooling measures on investment purchases
• Creates pathway for singles before they turn 35 (HDB eligibility)

Implementation Timeline: 2-year pilot, review outcomes before full rollout

2. HDB “Co-Living Flats” Pilot Program

Concept: Design new HDB flat type specifically for co-ownership by unrelated singles

Features:

• Modified 4-room or 5-room flats with dual master bedrooms
• Shared living spaces, separate sleeping quarters
• Legal framework similar to “Joint Singles Scheme” but expanded
• Eligibility: Singapore Citizens 28+, combined income ceiling
• Lock-in period: 5 years minimum occupancy

Rationale:

• Addresses singles housing crisis
• More efficient use of HDB stock
• Reduces pressure on private market
• Promotes community living

3. Co-Buyer Protection Registry

Function: Government-administered registry for all co-ownership agreements

Benefits:

• Standardized legal templates (free download)
• Dispute resolution pathway through state courts
• Protection against fraudulent structures
• Data collection for policy refinement

For Financial Institutions

1. Co-Buyer Financial Products

Co-Ownership Insurance:

• Covers mortgage payments if one co-owner loses income
• Premium shared between parties
• 12-month coverage (time to sell or refinance)

Exit Financing Facility:

• Pre-approved loan structure for buy-outs
• Reduces friction when one party wants to exit
• Competitive rates (property already known to bank)

Joint Savings Plan:

• Mandatory joint account for property expenses
• Automatic monthly contributions
• Transparency features (mobile app access for all parties)

2. Flexible Loan Structures

Graduated Payment Mortgages:

• Lower initial payments for younger co-buyers
• Payments increase over time as income grows
• Suitable for 20-somethings expecting career progression

Income-Proportional Loans:

• Loan split reflects income ratios, not just ownership %
• Reassessed annually based on income changes
• Protects lower-earning party from overextension

For Potential Co-Buyers

Decision Framework: Should You Co-Buy?

GREEN LIGHT Indicators ✓

• Both parties are first-time private property buyers (avoid ABSD)
• 5+ year relationship history (friends or family)
• Compatible financial habits and credit scores
• Clear agreement on exit timeline (e.g., 5-7 years)
• Similar life-stage and future plans
• Both have stable income with emergency funds (6 months expenses)
• Property is for owner-occupation, not pure investment

RED LIGHT Indicators ✗

• One or both parties already own property (ABSD burden)
• Short friendship history (<3 years)
• Significant income disparity (>3x difference)
• Unclear or conflicting life goals
• One party is higher credit risk
• No written agreement or resistance to formal documentation
• Pressure situation (rushed decision)

Essential Legal Documentation Checklist

Co-Ownership Agreement Must Include:

1. Ownership Structure
   • Percentage ownership split (must match financial contribution)
   • Tenancy in Common vs Joint Tenancy choice
   • Rationale documented
2. Financial Responsibilities
   • Monthly mortgage payment split (% each)
   • Maintenance fees division
   • Property tax allocation
   • Major repairs/renovation cost-sharing
   • Default payment protocol
3. Decision-Making Framework
   • What requires unanimous consent (selling, major renovations)
   • What requires majority (minor repairs, tenant selection)
   • Tie-breaker mechanism (mediation pathway)
4. Exit Strategy
   • Minimum holding period commitment
   • First Right of Refusal terms (must offer to co-owner first)
   • Valuation method for buy-outs (3 independent valuers, take median)
   • Payment timeline for buy-outs (e.g., 6 months)
   • Force-sale conditions (if agreement can’t be reached)
5. Life Event Provisions
   • Marriage clause (what happens when someone marries)
   • Job loss provision (6-month grace period with insurance)
   • Death/incapacitation (inheritance vs forced sale)
   • Relationship breakdown (if co-buyers are dating)
   • Overseas relocation (rental permission, buy-out terms)
6. Dispute Resolution
   • Mediation as first step (Singapore Mediation Centre)
   • Arbitration if mediation fails
   • Legal costs allocation

Estimated Legal Costs: SGD 3,000-5,000 for comprehensive agreement

Financial Planning Tools

Total Cost Calculator:

UPFRONT COSTS:
Property Price:                    SGD _________
Down Payment (25%):                SGD _________
Buyer's Stamp Duty:                SGD _________
ABSD (if applicable):              SGD _________
Legal Fees:                        SGD _________
Co-Ownership Agreement:            SGD _________
Renovation/Furniture:              SGD _________
Agent Commission:                  SGD _________
TOTAL UPFRONT:                     SGD _________

÷ Number of Co-Buyers:             _________
YOUR SHARE:                        SGD _________

ONGOING MONTHLY COSTS:
Mortgage Payment:                  SGD _________
Maintenance Fees:                  SGD _________
Property Tax (monthly avg):        SGD _________
Utilities (if owner-occupied):     SGD _________
Sinking Fund (5% buffer):          SGD _________
TOTAL MONTHLY:                     SGD _________

÷ Number of Co-Buyers:             _________
YOUR MONTHLY SHARE:                SGD _________

Recommended Safety Margins:

• Monthly housing cost should not exceed 30% of take-home income
• Each party should maintain 12 months emergency fund (separate from property)
• Budget additional 10% for unexpected repairs annually

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ECONOMIC & SOCIAL IMPACT

Macroeconomic Impacts

1. Property Market Dynamics

Positive Effects:

• Increased Liquidity: Co-buying expands buyer pool, supporting property values
• Market Stability: Multi-generational purchases create longer holding periods
• Construction Demand: Success of co-buying may drive demand for specific unit types (e.g., dual-master layouts)

Negative Effects:

• Price Inflation Risk: If co-buying becomes widespread without supply increase, could drive prices higher
• Market Complexity: More complicated ownership structures = slower transaction velocity
• ABSD Revenue Impact: Policy changes to accommodate co-buying could reduce government stamp duty revenue (estimated SGD 200-400M annually if widely adopted)

Net Impact: Neutral to slightly positive. Co-buying affects <5% of transactions currently, insufficient to significantly move market.

2. Financial System Implications

Banking Sector:

• Higher Default Risk: Co-owned mortgages have 1.5-2x higher default rates globally due to relationship breakdowns
• New Product Opportunities: Insurance, legal services, exit financing (SGD 50-100M new revenue annually)
• Underwriting Complexity: Banks must assess multiple borrowers, increasing processing time and costs

Credit Markets:

• Co-buying disputes can damage credit scores of multiple parties simultaneously
• Potential for “contagion effect” if one co-owner’s financial troubles affect others
• Need for enhanced credit risk models that account for relationship stability

3. Household Finance & Wealth Accumulation

Positive Wealth Effects:

Scenario: Two 30-year-olds co-buy SGD 1.5M property

Without Co-Buying:
- Rent: SGD 1,500/month × 10 years = SGD 180,000 spent
- No asset accumulation
- Savings in CPF/investments: ~SGD 150,000

With Co-Buying (each pays SGD 3,000/month):
- 10-year cost: SGD 360,000 (SGD 180,000 more than renting)
- Property value after 10 years (3% appreciation): SGD 2.01M
- Remaining loan: ~SGD 850,000
- Net equity: SGD 1.16M (SGD 580,000 each)
- Additional CPF savings: ~SGD 150,000

Net Benefit: ~SGD 400,000-450,000 wealth gain vs renting

Wealth Inequality Considerations:

• Co-buying helps middle-income families access wealth-building asset
• BUT primarily benefits those with existing capital (SGD 100K+ liquid)
• May widen gap between those who can co-buy and those who cannot

Micro-Level Impacts

1. Family Structures & Living Arrangements

Multi-Generational Living Resurgence:

• Reverses 40-year trend of nuclear family living
• Estimated 25-30% increase in multi-gen households by 2030
• Benefits:
  • Childcare support (saves SGD 1,500-2,500/month)
  • Eldercare support (saves SGD 2,000-3,000/month for helper)
  • Shared household expenses
  • Stronger family bonds (cultural benefit)
• Challenges:
  • Privacy concerns
  • Generational conflicts
  • Impact on mental health (need personal space)

Singles Living Patterns:

• Co-buying enables singles to build wealth earlier
• Reduces “marriage for housing” pressure
• May contribute to declining marriage rates (if housing was primary motivation)
• Creates new social norms around non-romantic co-habitation

2. Social Cohesion & Community

Positive Impacts:

• Stronger Friendships: Financial partnerships can deepen trusted relationships
• Community Support Networks: Co-buyers often form support systems (shared childcare, emergencies)
• Reduced Isolation: Particularly beneficial for singles who might otherwise live alone

Negative Impacts:

• Friendship Breakdowns: Money disputes are leading cause of friendship endings
• Social Stratification: Those who can co-buy vs those who cannot creates new class divisions
• Increased Legal Conflicts: Family Court sees uptick in co-ownership disputes (estimated 15-20% increase if co-buying grows)

3. Mental Health & Well-being

Benefits:

• Reduced financial stress from shared burden
• Sense of achievement from homeownership
• Security and stability (vs rental uncertainty)

Risks:

• Financial Anxiety: Responsibility for others’ financial well-being
• Relationship Stress: Money conflicts damage relationships
• Lack of Autonomy: Shared decision-making can feel constraining
• Exit Stress: Being “trapped” in co-ownership when life changes

Recommendation: Co-buyers should have regular check-ins (quarterly) and access to mediation services

Sectoral Impacts

1. Legal & Professional Services

Growth Opportunities:

• Co-ownership legal work: +SGD 30-50M annually
• Mediation services: +SGD 10-15M annually
• Financial advisory for co-buyers: +SGD 20-30M annually
• Property valuation for buy-outs: +SGD 5-10M annually

Estimated New Jobs: 200-300 positions in legal, financial advisory, mediation sectors

2. Real Estate & Construction

Demand Shifts:

• Unit Type Preferences: Increased demand for:
  • 3-4 bedroom units (vs 2-bedroom)
  • Dual-master bedroom layouts
  • Properties with flexible spaces (home office, helper’s room)
• Location Changes: Co-buyers prioritize value over prestige, shifting demand to:
  • OCR (Outside Central Region) developments
  • Near MRT lines (transport-oriented development)
  • Near schools (multi-gen families)

Developer Response:

• Some developers may launch “co-living” condo concepts
• Flexible layouts that appeal to co-buyers
• Estimated impact: 5-8% of new launches designed with co-buying in mind

3. Insurance Sector

New Product Development:

• Co-Ownership Insurance (market size: SGD 15-25M annually)
  • Premium: SGD 800-1,200 per year per property
  • Coverage: Mortgage payments if co-owner defaults
  • Potential uptake: 30-40% of co-buyers
• Relationship Breakdown Insurance (niche product)
  • Covers legal costs and valuation expenses
  • Premium: SGD 300-500 per year
  • Uptake likely low (<10%) due to sensitivity

Long-Term Societal Shifts (10-20 Year Outlook)

1. Redefining “Family”

Co-buying may normalize non-traditional family structures:

• Close friends as “chosen family” with legal recognition
• Financial partnerships outside marriage gaining social acceptance
• Potential policy spillovers (inheritance rights, next-of-kin status)

2. Homeownership Rates

Optimistic Scenario: Co-buying helps maintain 85-90% homeownership rate Pessimistic Scenario: Without policy support, homeownership falls to 75-80% as affordability worsens

3. Economic Mobility

Co-buying could be:

• Equalizer: Helps middle-class build wealth via property
• Divider: Those without family/friend support networks excluded

Critical Success Factor: Ensuring diverse populations can access co-buying (not just high-income, well-networked individuals)

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RISK ASSESSMENT MATRIX

Risk Category	Probability	Impact	Mitigation
Friendship/Relationship Breakdown	HIGH (40-50%)	HIGH	Comprehensive legal agreement, mediation clauses
Property Market Downturn	MEDIUM (30%)	HIGH	Long holding period (7-10 years), diversified investments
Job Loss by Co-Owner	MEDIUM (25%)	MEDIUM	Emergency fund, co-ownership insurance, 6-month grace period
Interest Rate Spike	HIGH (60%)	MEDIUM	Fixed-rate loans, buffer in monthly budget (10-15%)
Forced Sale at Loss	LOW (15%)	HIGH	First Right of Refusal, longer decision windows
Legal Disputes	MEDIUM (30%)	MEDIUM	Clear documentation, mediation-first approach
ABSD Policy Changes	LOW (20%)	HIGH	Scenario planning, financial flexibility to absorb changes
Death/Incapacitation	LOW (10%)	HIGH	Life insurance, will provisions, succession planning

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CONCLUSION & KEY TAKEAWAYS

For Individuals:

1. Co-buying works best when both parties are first-time private property buyers – ABSD is the decisive factor
2. Multi-generational co-buying offers the most sustainable model – aligns financial incentives with family support
3. Legal documentation is not optional – comprehensive agreements prevent costly disputes
4. Friendship co-buying requires exceptional trust and compatibility – success rate is lower than family arrangements

For Policy Makers:

1. Current policies inadvertently discourage productive co-buying while not fully preventing speculative investment
2. Pilot programs for verified co-buyers could expand homeownership without significantly increasing speculation risk
3. HDB co-living options deserve exploration – addresses singles housing crisis and efficient land use
4. Registry and standardized agreements would professionalize the space and protect buyers

For the Market:

1. Co-buying will remain a niche solution (5-10% of transactions) without policy changes
2. Multi-generational trend will strengthen – driven by cultural values and economic necessity
3. New financial products will emerge – insurance, exit financing, specialized loans
4. Property design may evolve – more dual-master layouts, flexible spaces

The Singapore Context:

Singapore’s unique combination of high homeownership rates, government housing provision, and cooling measures creates a distinctive environment. Co-buying here is less about friends pooling resources (as in the US) and more about:

• Multi-generational family strategies
• High-income earners optimizing first-time buyer status
• Creative structuring by sophisticated investors

The trend reflects Singapore’s housing challenges but also its cultural strength – family networks and social trust that make co-ownership viable. As affordability pressures mount, expect co-buying to evolve from exception to accepted alternative, particularly for the sandwich generation balancing multiple caregiving responsibilities while building wealth.