Housing

[kazukirai]

Hi all,

Starting a thread on discussions related to housing issues in SG. Have placed this under the 'Personal Finance' umbrella as I hope to discuss issues related to housing as an expense rather than as an asset class. I believe there are already threads on Property Investing and Property/Construction related counters so let's not confuse them with this.

Personally, I'm looking for a place of my own as I'm getting ready to settle down so it would be great if VB-ers could share their experience regarding the following:

- Renting vs Buying
- HDB pjts vs Pte property
- Mortgage Loan affordability levels

Or any other housing related issues.
Hope this generates fruitful discussion!

[Musicwhiz]

Oh well since no one is replying let me be the first to contribute my thoughts. Note that I am just a novice when it comes to property and it's people like Koh_52 who are really the sharp, astute ones. Nevertheless, I hope my opinions help....

1) Buying vs Renting - Frankly, if you feel housing prices are way too high (and I think they are), then you may be better off renting rather than buying just to wait for prices to cool off. However, I do know one real life example of a couple who did this from 1993 to 1995 (i.e. renting) but prices kept going up. Finally they committed to a condo purchase in 1995/1996, and you know what happened in 1997! So I guess this method of "timing" is not foolproof either - it always contains significant risk that you get "caught out". Also note that renting is always an expense but buying means you end up owning an asset; which is why I will still advocate buying if and only if the price is not too high.

2) HDB vs Pte Property - The advantages of HDB are lower overall costs, IMHO. Lower conservancy charges compared to the condo maintenance fees; and also lower utilities rates. Plus, if Govt declares rebates like Conservancy and U-Save it's the HDB people who get them and not those in Pte Prop. HDB are also generally cheaper and more affordable than pte; but the problem is that if your combined income is >$8,000 you are barred from buying new HDB flats (which I feel is dumb). So in the end you end up with a resale flat paying a high COV which I feel is pointless. That was what pushed many to "upgrade" to pte property - the gap between HDB resale and mass market condos was closing fast! Condo living does have its "perks", but trust me after 10 years the facilities will be run down and the condo may not be regularly spruced up, so it may lose its value. And can you really consistently use the pool, gym, tennis courts etc? Of course, I am biased cos I live in an HDB flat....

3) Mortgage loans are now at their lowest because SIBOR is like 0.52% or around that level. This may spur many to refinance their loans to lock in the rates for 3 years, which I think is a good idea if you have a large principal. But my advice is if you are on HDB Concessionary rate, do NOT switch to Bank Loans as you cannot switch back to the fixed 2.6% per annum. Though it may seem high now, one must remember that historically interest rates have been around 3-4%; so this is a period of artificially low interest rates. Already inflation has been announced at 3.3% and may rise further, so rates may also rise.

Cheers!

[brattzz]

1) property for living in, HDB, pay cash in full, sleep well at nite!

2) property for investing, now is not the time to buy, save up, be patience, wait for 2014... all properties TOP liao.. u'll see..
but of cos the garment can pump in another 1 or 2 million foreign talents! tat will hold up the crazy prices!