Buying a HDB or Condominium?

[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.

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!

That's good math and good thinking.

[Lisafuller]

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!

Wow, thats brilliant.

[Lisafuller]

In the past, old shophouses or terraces used to house 10-15 workers. That has changed due to covid. The rules states that it has to be way less, per unit of dwelling. Some demand for additional dwellings there, to satisfy regulators.

In the past, 300k Malaysian workers used to cross the border daily. That has changed due to covid. A % of them now rents rooms here. It could be 50k or it could be 250k, but there’s certainly demand there.

Just before covid, interest rate was 2.5% or so, now it’s around 1%. Mortgage has just gotten cheaper. Coupled with no holidays, a lot of people has spare cash lying around to spend on housing. Quasi demand there.

In the past, new dwellings take 3-4 years to build. Now it takes 5-6 years. Some demand there for existing stock. Especially for new couples and what not leaving their parents nest.

In the past, people work in offices. Now people work from home, and there’s a sudden lack of space especially for people with a large family nucleus. So, additional demand there for housing.

In the past, workers and supplies can easily come into sg for housing. Due to covid, fresh workers can’t come in easily. Materials costs are going up. Hence new houses break even costs has to go up. If new home prices are priced higher, it will have a spill over effect on older units, as a competing product.

Caveat: it all has to reach an equilibrium when demand tapers off.

I reckon these points are pretty much on the mark.

Also, it's supply and demand, sure. But the thing that's whisking up the market without any added benefit whatsoever is property speculators. This needs to end. In fact, there will come a time it's no longer allowed and then years later we'll wonder how this sort of thing could have been permitted at all.

"Multiple properties" this and "multiple properties that". I hear this so often it's absurd. Some of these buggers collect properties like stamps, bending the rules and toeing the line left right centre so they can pull this stunt. Of course it's at the expense of the Singaporean public, average peeps that just want to own a home to live in.

Too many properties remain empty, unused, choped by some moron with dollar signs flashing in his eyes. Meanwhile home values go skyward, resulting in serious asset inflation, condemning the population to a hamster wheel existence.

Madness.

That’s the property bubble you’re referring to. Inflated perceive demand creates demand on the part of investors, who buy and buy, driving prices up. Eventually, when investors realize there is no real demand, the property bubble bursts as prices plummet and everyone scrambles to sell to minimize their losses.