Well I wish I had bought when I moved back in 2005 (market was at the bottom) but due to a difficult divorce I didn't buy until 2010. No regrets though. Having your own shoebox in the sky is a good thing.CitizenOfTheWorld wrote:This is quite premature I grant you, but I was thinking how hard would it be to get a loan as a foreigner to buy a small studio rather than rent. I'll certainly rent the first year, but after that it seems like it makes more sense to buy, even a modest property if you can get the very low interest rates that are supposedly available.
Assuming I'll love it in Singapore and want to stay forever, and assuming that timing the market is impossible, so forget about booms and busts, how rational is the idea of buying? Let us assume 100-150k available for down payment and a good local salary. This would happen sometime around 2015 or later.
P.S. Thanks for all the advice on the previous thread on renting with/without an agent.
Actually American (US citizens) are running into banks now who won't process the extra paper work as it's too onerous and this will include loans. My wife's workplace (a US school) here has moved all it's accounts to SCB because they are the only bank friendly to all the US citizens employed at said school.Wd40 wrote:Being American is a sure win. No need to pay ABSD. The only resident foreigners I see buying in this market are the Americans, Swiss and Norwegians.
The trend on leasehold properties is pretty obvious tho - there are some coming up pretty soon for renewal in Geylang and the govt is quite clear that they will not be extended. The sales prices are now just a multiple of the forecast rent for the remaining lease. What will be interesting is the millions of HDB's coming up for lease renewal in about 60 years + (actually only 40 in some areas already).PrimroseHill wrote:Buying a place anywhere especially in an expensive property hub as SG is risky until you know that this is where you want to live. Unless you are from one of those exempted countries, with stamp duty and ABSD, it will work out to be 5%. There's an annual property tax to pay as well on top of any service charges.
Also because it is such a young country, no one can give you a definitive answer on leashold properties other than en bloc.
You can still get normal banking services at most banks, just not any type of investment service. I didn't know SCB offered these to Americans.PNGMK wrote:Actually American (US citizens) are running into banks now who won't process the extra paper work as it's too onerous and this will include loans. My wife's workplace (a US school) here has moved all it's accounts to SCB because they are the only bank friendly to all the US citizens employed at said school.Wd40 wrote:Being American is a sure win. No need to pay ABSD. The only resident foreigners I see buying in this market are the Americans, Swiss and Norwegians.
At what point will banks stop offering loans on those properties? I've been told when the lease has less than 50yrs remaining. That will be in the next 10-15 years for a lot of HDBs, even prime ones with current sky-high valuations like Marine Parade.PNGMK wrote: What will be interesting is the millions of HDB's coming up for lease renewal in about 60 years + (actually only 40 in some areas already).
Well I never, I wonder why they won't allow lease extensions. Maybe it's like compulsory lease expiry so HDB can repossess and en-bloc rebuild.zzm9980 wrote:At what point will banks stop offering loans on those properties? I've been told when the lease has less than 50yrs remaining. That will be in the next 10-15 years for a lot of HDBs, even prime ones with current sky-high valuations like Marine Parade.PNGMK wrote: What will be interesting is the millions of HDB's coming up for lease renewal in about 60 years + (actually only 40 in some areas already).
ABSD for non-exempt foreigners is now 15%. If I were an American I would jump and buy a property just to make use of that 15% arbitrage. OP is American so he is exempt.PrimroseHill wrote:Buying a place anywhere especially in an expensive property hub as SG is risky until you know that this is where you want to live. Unless you are from one of those exempted countries, with stamp duty and ABSD, it will work out to be 5%. There's an annual property tax to pay as well on top of any service charges.
Also because it is such a young country, no one can give you a definitive answer on leashold properties other than en bloc.
[Squint] I don't see any arbitrage here. Do you mean 'opportunity to not have to pay a tax?' If so why does that alone motivate you to buy, when 95% [?] of the buyers already don't pay this tax?Wd40 wrote:ABSD for non-exempt foreigners is now 15%. If I were an American I would jump and buy a property just to make use of that 15% arbitrage. OP is American so he is exempt.
1. It's the very big elephant in the room no one will talk about officially.JR8 wrote:Well I never, I wonder why they won't allow lease extensions. Maybe it's like compulsory lease expiry so HDB can repossess and en-bloc rebuild.zzm9980 wrote:At what point will banks stop offering loans on those properties? I've been told when the lease has less than 50yrs remaining. That will be in the next 10-15 years for a lot of HDBs, even prime ones with current sky-high valuations like Marine Parade.PNGMK wrote: What will be interesting is the millions of HDB's coming up for lease renewal in about 60 years + (actually only 40 in some areas already).
This has all kinds of ramifications, people being evicted from their family homes of generations. People expecting to inherit a flat now worth nothing. People who get evicted when the lease expires and can't afford a new place, as they have no capital. And on and on ... the social consequences are enormous.
Which is curious, as extending a lease is quite a pig of a process (I'm doing one back one back home right now, and it's already been in-process for maybe 2 years between lawyers, valuers, fellow owners...), but it's pretty much standard under UK law (upon which SG law is based, including 'Landlord + Tenant' law).
What you tend to find is that the market appeal/value of a property drops right off when it's remaining lease drops below a person's '''**perceived** average lifespan''', which in my home market translates into about 75 years unexpired. The drop-off in value as time go by is exponential, increasing as time passes. 50-60 years left? Most people already wouldn't touch it, unless it was ultra-ultra prime city-centre.
Banks' mortgages by standard are 25-30 years. If it's an interest-only loan, they need to know their security, your home, will be worth more the capital outstanding when the loan expires. If your home has say 25 years on it's lease unexpired, odds on it won't cover it. It's become very niche market on a lease that short (cash buyers etc). I forget what the average unexpired term required is for a mortgage, but it is somewhere around 60 years IIRC.
I am very surprised to hear of this policy. If this is true, there is a great deal of trouble ahead.
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