Decision one is wise because buying a house here is not frictionless - there are significant transaction costs.Girl_Next_Door wrote:Have you considered your longer term plans? Do you plan to stay in Singapore for the next 5 - 10 years or longer or there is a possibility that you might moved to another country?
For me, we bought a 3 bedroom apartment which is based on our affordability. We plan to start a family, and figured that we would need more spare when the baby comes. It doesn't make sense to stay in a 2 bedroom and buy/rent a bigger unit at a later date. Our longer plan is also to stay in
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Financially, it is also a lot easier for us because we contribute maximum into our CPF. After taking into consideration our bonus, we are able to utilize about $3K from our CPF, and pay about $1K cash for our mortgage (we bought a $1.6mil property with a 80% loan).
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deciding what kind of property to purchase.
We have made other plans for retirements, hence, we do not really need the CPF for such purposes. We also have a place in London for investment purpose, so by the time we retire, we will probably sell that place, and keep the cash for retirement, among other investments.PNGMK wrote:
Decision one is wise because buying a house here is not frictionless - there are significant transaction costs.
Decision 2 is not wise. You'd be better off paying cash for your M/G payments and conserving OA in your CPF account for a rainy day (i.e. unemployment or time off) when you can use it to fully service the loan as well as of course saving for retirement. IF Singapore gahmen really wanted to crash the property market they should drastically reduce the ability to use CPF for property. I have used it for that and now at 52 I regret.
Wd40 wrote:OP is a rare specimen of an endangered species called "Indian PRs, yet to buy a house in Singapore"
Seriously, I think everyone who had to buy a house in Singapore has already bought one. With record inventory of houses coming onstream and Govt, wanting to replace foreign workers with robots(who dont need a house to live), I dont think it is wise to buy a house. Heck, it is not wise to buy anything in this gig economy. Just rent everything. I read this really cool article, yesterday. Must read until the end:
http://qz.com/821221/indian-startup-fur ... furniture/
Wd40 wrote:You have to pay 5% absd and 3% sd. I think total transaction costs would be around 10% of the house cost. So 2 years of potential rental savings will be gone in the transaction costs. So from a financial point of view you need to have a visibility of 5 years atleast for it to make sense. If you are currently renting hdb and paying like 2k in rent then you save about 75k in 5 years. Assuming prices don't change and you can sell your hdb after 5 years.
So depending on how much does 75k mean to you, you can decide on whether to buy or continue renting.
Condos are higher risk higher return.
I have already completed 7.5 years in Singapore. I don't have the visibility to stay here for another 5 years. So I would continue renting. I like the flexibility of being able to pack my bags anytime, if I want to move back.
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@WD40: A casual observation, all your posts on almost every thread are dripping with negativity and general disdain for the red dot. I fail to understand why ? A case in point - the line above should be "better" career opportunities in other countries and not "better" countries.Wd40 wrote:Focusing on earning potential is mutually exclusive with doing cost analysis, no? I didn't whine about cost. I just told you from a financial point of view. If money is not your concern, then you need to evaluate based on whether you like permanence of having your own house vs flexibility of leaving the country anytime, without any attachments.
Why did you even ask this question in that case? PhD holder couldn't even figure that out
To me PR doesn't mean much when it comes to career opportunities. I have friends who gave up their house and PR because they got opportunities in better countries.
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