Buying a HDB or Condominium?

[the observer]

https://sg.news.yahoo.com/ultra-rich-ar ... 41347.html


The Ultra-Rich Are Driving a $24 Billion property Frenzy in Singapore

Faris Mokhtar11 August 2021, 5:00 AM SGT
In an exclusive Singapore neighborhood shaded with rain trees, a local tech billionaire plunked down $95 million for a mansion. Near an upscale shopping district, a Taiwanese family with a grocery empire spent $216 million for all the units in a condominium development.

[Myasis Dragon]

https://sg.news.yahoo.com/ultra-rich-ar ... 41347.html


The Ultra-Rich Are Driving a $24 Billion property Frenzy in Singapore

Faris Mokhtar11 August 2021, 5:00 AM SGT
In an exclusive Singapore neighborhood shaded with rain trees, a local tech billionaire plunked down $95 million for a mansion. Near an upscale shopping district, a Taiwanese family with a grocery empire spent $216 million for all the units in a condominium development.

Without government restrictions on foreign real estate investments, Singapore real estate prices are going to resemble those of Hong Kong.

With government restrictions on foreign real estate investment, Singapore risks the possibility of a real estate recession and attendant foreclosures.

Damned if they do and damned if they don't.

[Sunjackal]

We bought a HDB resale. There’s a couple of reasons for this, though.

1) We plan to be here for a long time, and we didn’t want our son to grow up in an expat bubble. I realise it’s not as black and white as condo = bubble but we felt living in a HDB would be much more varied.

2) Condo vs HDB floor space is crazy in terms of price. We bought a 5 room HDB - around 1250sqft. If we did that in a condo, the price would have been x3 probably.

3) We wanted to be close to my wife’s family and didn’t want to wait for the condos to be built.

[malcontent]

HDB living is the best way for a foreigner to learn and adapt here. That is where I lived my first 2.5 years. I didn’t find it too much of a culture shock. If you are an ang moh, you will typically be the only one in the block, and possibly the entire estate. It definitely gets you extra attention. Most people are down to earth and friendly, in a uniquely Singapore way. They often have strong opinions about a lot of things, but are also curious to learn.

Living near your in-laws is not a surprise. Mine live right in the apartment next door, literally less than 10 steps away! The important thing is to manage your finances well and budget with a sharp pencil. Keep in mind that Singapore is a place to make money, not spend money. Look at the bright side, it can make you less materialistic!

Once you start investing, you may be surprised to learn that London is the best destination for investment dollars here. Locals who are “in the know” will typically buy London listed ETFs like VWRA or ISAC which are both better and cheaper (by far) than local investment products.

[Sunjackal]

Good to know! Thanks. Having just come from London, I suppose that means I shouldn’t feel a terrible rush to move investments across from the UK to here.

[malcontent]

Good to know! Thanks. Having just come from London, I suppose that means I shouldn’t feel a terrible rush to move investments across from the UK to here.

Exactly… all that you may need to do is update your broker on your new address and tax residency status. If your UK broker doesn’t accept non-residents, you’ll probably want to open an account with Interactive Brokers (IBKR) and transfer your UK investments to that account.

[malcontent]

https://sg.news.yahoo.com/ultra-rich-ar ... 41347.html


The Ultra-Rich Are Driving a $24 Billion property Frenzy in Singapore

Faris Mokhtar11 August 2021, 5:00 AM SGT
In an exclusive Singapore neighborhood shaded with rain trees, a local tech billionaire plunked down $95 million for a mansion. Near an upscale shopping district, a Taiwanese family with a grocery empire spent $216 million for all the units in a condominium development.

Without government restrictions on foreign real estate investments, Singapore real estate prices are going to resemble those of Hong Kong.

With government restrictions on foreign real estate investment, Singapore risks the possibility of a real estate recession and attendant foreclosures.

Damned if they do and damned if they don't.

With the 1 full percentage point gain in property prices in September, it not only sets a new all-time high for the market, but solidifies the upward trend we started seeing since the mild Covid pullback mid-last year.

It’s really Economics 101, any kind of artificial intervention or restrictions only work temporarily, you can’t prevent the march toward equilibrium - - unless there is a fundamental change in supply or demand, the market can’t be stopped, only delayed.

COE prices have just topped $80,000… so strap in, get ready for some more fun!

[midlet2013]

Intervention is necessary to safeguard the social part.

With 80k or 60k COE, how does it effect the folks who can afford. But then car is classified as a luxury. Same for condos.

I seriously think non-stop increasing house prices, particularly HDBs, will have a social impact.

Govt should not interfere always but in certain areas, they should make reasonable policies.

Altho, it does not effect me a great deal, I feel non-stop hearing about Car and House prices results in general pessimism and stress.

I dont think Cars and Houses should require more than 10% of your time. But its really not the case here.

https://sg.news.yahoo.com/ultra-rich-ar ... 41347.html


The Ultra-Rich Are Driving a $24 Billion property Frenzy in Singapore

Faris Mokhtar11 August 2021, 5:00 AM SGT
In an exclusive Singapore neighborhood shaded with rain trees, a local tech billionaire plunked down $95 million for a mansion. Near an upscale shopping district, a Taiwanese family with a grocery empire spent $216 million for all the units in a condominium development.

Without government restrictions on foreign real estate investments, Singapore real estate prices are going to resemble those of Hong Kong.

With government restrictions on foreign real estate investment, Singapore risks the possibility of a real estate recession and attendant foreclosures.

Damned if they do and damned if they don't.

With the 1 full percentage point gain in property prices in September, it not only sets a new all-time high for the market, but solidifies the upward trend we started seeing since the mild Covid pullback mid-last year.

It’s really Economics 101, any kind of artificial intervention or restrictions only work temporarily, you can’t prevent the march toward equilibrium - - unless there is a fundamental change in supply or demand, the market can’t be stopped, only delayed.

COE prices have just topped $80,000… so strap in, get ready for some more fun!

[malcontent]

There is an easy way to fix the rising HDB prices, increase the supply!

Instead, in the news they were talking about restricting certain people from buying HDBs in certain popular districts

It’s the same thing with schools, they keep merging and reducing schools here until there aren’t enough spots and you’ve got to keep cramming kids in.

Having a few extra seats in schools and a few extra HDB flats isn’t such a bad thing. You can always flex by adjusting the student : teacher ratio, or repurposing excess HDB blocks for other purposes. Just need to use a little creativity thinking. Unless the intent is to create scarcity?

[PNGMK]

The primary reason I have avoided buying a HDB is that they cannot be used as collateral.

You cannot borrow against your equity in a HDB but you can borrow against equity in a freehold, 999 and 99 year lease private property.

I borrowed 150k about 3 years ago to renew COE, pass off an Australian mortgage and make some investments. The money was cheap (and still is) and secured against the property I own. You cannot do that with a HDB. At the time my condo was worth about 1.3 now it's close to 1.7 - that money is completely backed up and in effect repair when I liquidate the condo.

Furthermore once you start accumulating private properties you can pool the equity together to borrow more money. No possible with HDB.

[malcontent]

The primary reason I have avoided buying a HDB is that they cannot be used as collateral.

You cannot borrow against your equity in a HDB but you can borrow against equity in a freehold, 999 and 99 year lease private property.

I borrowed 150k about 3 years ago to renew COE, pass off an Australian mortgage and make some investments. The money was cheap (and still is) and secured against the property I own. You cannot do that with a HDB. At the time my condo was worth about 1.3 now it's close to 1.7 - that money is completely backed up and in effect repair when I liquidate the condo.

Furthermore once you start accumulating private properties you can pool the equity together to borrow more money. No possible with HDB.

I’ll bet you never thought you’d own a seven figure property in your younger days… I know I didn’t!

I’ve been thinking lately, since our condo is in my wife’s name alone and since I’m a US citizen with no first property… I could buy one more with zero ABSD, and use the rent to pay the mortgage. The challenge is, coming up with the down payment… and the eventual capital gains taxes in the US.

[PNGMK]

Well interesting you should say that. We are in en enbloc and every time I say to my US wife.... hey the next place we can put in your name to save ABSD she has a mini meltdown about the eventual tax paperwork and cost.

How bad is the CGT going to be on a property gain in Singapore for a US citizen Malcontent?

[malcontent]

Well interesting you should say that. We are in en enbloc and every time I say to my US wife.... hey the next place we can put in your name to save ABSD she has a mini meltdown about the eventual tax paperwork and cost.

How bad is the CGT going to be on a property gain in Singapore for a US citizen Malcontent?

At the moment long-term CGT rates are 0%, 15% & 20% (depending on your tax bracket) but Biden wants to raise those. Long-term = held > 1 year, and CGT only applies to the gain less expenses.

There are a few important exemptions.

If you own and have lived in your home for two of the last five years, you can exclude up to $250,000 ($500,000 for married people filing jointly) of the gain from taxes.

If you own the property for investment (a foreign investment property is FATCA reportable, but honestly, it’s not difficult) and you sell and reinvest that gain into another property, there is something called a 1031 exchange that can allow you to defer CGT.

[PNGMK]

Malcontent, thanks for that. It is nothing terrible then and if the property has made a profit quite manageable.

For buying a private property here you may be able to borrow the deposit against your substantial stock portfolio at a good rate (the stocks become collateral). However I think we all know interest rates will rise soon.

[malcontent]

Malcontent, thanks for that. It is nothing terrible then and if the property has made a profit quite manageable.

For buying a private property here you may be able to borrow the deposit against your substantial stock portfolio at a good rate (the stocks become collateral). However I think we all know interest rates will rise soon.

Let’s say you buy a $1.5m property that you live in, you spend $0.1m on repairs and renovations (keep the receipts) and sell it 5 years later for $2m, that is a $400k net gain (US$300k) leaving a US$50k gain after the $250k exemption. Even at the top rate of 20% it’s only US$10k in CGT.

Compare that to 15% ABSD on $1.5m = $225k!