Singapore Expats

Buying Property

Discuss about where to live, renting a property, tenancy issues, property trend and property investment in Singapore.
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Buying Property

Post by keepitreal » Mon, 16 Jul 2007 3:58 am

From what I see, everyone seems to rent proprerty in Singapore and with rentals increasing all the time i have to ask whether there are any people out there who have or are considering buying property? This seems to be the only way to get around the current hike in rentals as it looks as though it's all going one way.

I have done a little investigation and can see that mortgages are around 3.5% which equates to $3,500 p/month on a $800k mortgage (repayment over 25 yrs). 800k would buy you a 3bed / 2bath at the Bayshore which is currently renting for around 5.5k per month. I know there are service charges and other extras to add to this but it is clear that mortgaging the property offers substantial savings.

I'm sure this is not the first time this subject has been discussed on this forum so any thoughts on this would be welcome.

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Post by Bonbon » Mon, 16 Jul 2007 9:32 am

Hi there, I would consider

1. sounds like a NPV (NEt PResent VAlue ) exercise! Say for example, if you think you'll be leaving Singapore in 2 years time. Would the rent you save $5.5k * 24 months discounting (the cost you would suffer had you continued renting) be less than the expenses you would have spent if you own a property, (mortage repayment , cost of renovation, management fees, furniture, amortised monthly stamp duty charge) PLUS the gains you would get if you sell your property in 2 years time.

2. what would the property price of your condo be if you sell it when you leave Singapore. If you choose to rent out, would the demand of renting your place still be there then (the time you decide to rent)?

But then if you know you're going to stay in Singapore for the rest of your life, I guess it's probably better just to buy a place, save a lot of hassels !!! and you are afterall spending on something you'll own eventually, rather than to someone else!

good luck!


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Post by La grande boucle » Mon, 16 Jul 2007 11:17 am

Not only rental prices went up of course. Same for sales / purchasing of property.

Buying now at the height of the market is about the stupidest decision you could make.

High rental is only temporary, whereas the mortgage on your overpriced property bought will be with you for the next 30 years.

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Post by ProvenPracticalFlexible » Mon, 16 Jul 2007 2:46 pm

I think of it, and I somehow arrived to the exact opposite conclusion at the moment. I calculated that with my current rent (signed 3 months ago) I couldn't even afford the interests of a loan.

Maybe first check your figures before making conclusions:
800k loan with 3.5% interest makes it 4000 per month when I calculated it. I know it’s only 500 but for me that already makes a big difference.

Then how did you come to 5.5 for rent, that seems to be the most expensive asking price for 3 BR at the Bayshore, from this site.

Similarily how did you chose 800k for the buying price which seems to be below any asking price on this site.
Of course these are both only asking prices from one source of information. So maybe you have information of average sales prices and signed rental agreements over last 3 months at the Bayshore.

So maybe with valid information you could make better conclusions about buying a property, here in Singapore. I personally came to same conclusion then La Grand Boucle, prefer to pay high rent for a year or two instead of high mortgage for decades. Especially when I do not believe that the prices will continue to rise and interest rates probably will.

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Post by ching » Mon, 16 Jul 2007 8:00 pm

I went through the same exercise just before we signed our new lease this year... and decided to pay the high rents for a couple of years (hopefully not much longer than that) rather than be stuck with an expensive mortgage for decades.

Of course I'm also kicking myself for not having bought a place a year ago! :)
Tips from expats living in Singapore -

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