Is sg property cheap now?

[blackclock]

I support the idea that home is an prepaid Expense. Most people do not generate any income from own-stay home

If I classify HDB as asset, I am overvalue-ing my networth.
Because (1) I can't sell it. I need a roof (2) It's worth 0 after 99 year lease

This wrong believe will destroy my life. If I get richer, I may buy a landed property for $3million and considered it as a Asset
I FEEL rich. But most people will never generate any income for it, and their finance will get wracked by it due to higher upkeep cost & higher expectation from people around you.

Conclusion - It's wrong to classify own-stay property as Asset in our Own Financial planning. Just ignore those accounting rules you read from books. They are only theories.

[corydorus]

Seriously I don't get it. A HOME 10M. Is an asset whether you want to sell it or not, rent to or not. If you need to, you can sell it, why not ? It only tells you there is such an asset valued at 10M. And you can buy a 1M for replacement. Why would valuation of your asset mark to market destroy your life ？  I don't buy it just because you don't count towards your net worth that you do not know is worth 10M.  And you can downgrade it if need to. 😂

How many out there really don't change home in your lifetime ？

[Scg8866t]

The reason why asset backed coys are resilient is because the intrinsic value of the asset they own is real and independently valued yearly. If they need cash, they can take up a secured overdraft against their asset for cash from the banks.

You are truely in trouble if u go the asset light route vis a vis a pure tenant kind of guy that owns zero asset. Becasue if u have cf issues, you have nothing to back u up. That is the definition of going the "pre paid expense route", ie no home, no equities, no nothing just forking out cash to rent.

Its not right to say your home even if its for own stay is not an asset because, it is a good hedge against inflation, you can rent our numerous rooms in your unit or even draw out a loan from ur home if you wish too. Even for HDB, after MOP from a bto, most owners will make money from it be it directly via a sale or indirectly via capital appreciation. The potential and the capital appreciation is there. For freehold private prop, you own a percentage of the land underneath and that land can be purchased by developers via enbloc.

Even if u are not renting, just because u are not receiving income on a monthly basis doesn't mean its not an asset when the potential of a sale can reap u a handsome gain over time(likewise for non div paying counters like FB, Berkshire etc). Just look at all the btos and enbloc in singapore.

[Temperament]

Aiya,

anyone can say what he likes about his residence is not counted as one of his assets, when it's "the end of the road for him"(touch wood), he will squeeze it like lemon for the last drop of juice.

It is really an asset that almost all people don't want to use but have to use when there is nothing valuable left for him to squeeze out some cash.

But i may agree it is best not to think of it as an asset even it is FH 10 million property unless, U are starting or joining a business which needs new cash injection.

If U own a FH 10 million property, U should be quite successful in managing your money already.

Why need to sell then unless calamity strikes?

Touch wood.

[blackclock]

Most people won't downgrade own stay property, because of "face". That's the problem

[Bibi]

Most people won't downgrade own stay property, because of "face". That's the problem

I would say most retiree previously staying in condos will downgrade to hdb to unlock some cash. Already a few in my companies did it preparing for their retirement. My mama new neighbour downgraded from condo to 3 room hdb flat with lease left about 50 years.

[Temperament]

I would say face or no face when U need FCF, U need FCF at your de-accumulation phase.

And as U are born with nothing, those who aim to go with nothing if don't need to leave a legacy behind, are the smart people.

[Scg8866t]

Not forgetting hk residential land is at most 70years lease, while sg land has freehold option ie no depreciation in land value over time.

Cant compare with Malaysia as Sg is AAA credit rated with a much higher gdp per capita coupled with a very small land which I feel matches HK the most in terms of land size, chinese predominant, corporate governace and international attractiveness. Foreigners now i feel prefer sg to hk because many westerners dont like to put their money under indirect watch of China.

Sg has 1trillion usd in foreign reserve there abt, dont think its fair to compare it with any asean countries ard it. In terms of sg’s location, i think its one of the best in the world, thats why our ports are still one of the busiest in the world. Own view.

Some Hong Kong tycoons have started moving personal wealth offshore as concern deepens over a local government plan to allow extraditions of suspects to face trial in China for the first time, according to financial advisers, bankers and lawyers familiar with such transactions.

http://bit.ly/2XJWooF

Hk tycoons moving wealth to Singapore due to the potential extradition law in HK. If this continues on a larger scale it might affect sg property prices hmm.

[karlmarx]

Every tangible object that a person holds in possession can be considered an asset.

But whether a person actually includes them in the calculation of his/her net worth is up to said person. Regardless of the decision -- whether to include home property in the calculation of net worth -- a person's financial situation/well-being does not change.

Since there is no tangible change in one's financial situation as a result of one's 'accounting policies,' the debate here about whether to consider the home property as an asset, and the implication of whether they should be considered in a person's net worth, is therefore not very productive.

Certainly, a more 'aggressive accounting policy' will show one to have a higher net worth. But what is the utility in doing so? To make one feel better about oneself, in relation to others? Maybe. In any case, I don't think there is anything wrong in doing so. We are free to do whatever that pleases ourselves. But I think it is important to understand why we do what we are doing, and decide whether there is merit in our decisions.

[weijian]

Most people won't downgrade own stay property, because of "face". That's the problem

I would say most retiree previously staying in condos will downgrade to hdb to unlock some cash. Already a few in my companies did it preparing for their retirement. My mama new neighbour downgraded from condo to 3 room hdb flat with lease left about 50 years.

When one is younger, probably the worries are different - Ego and "face" are good masks or substitutes.
As one gets older, our worries shift from the external to mainly the internal - Can we sleep well? Do i have any chronic pain? Will i be able to live an independent life with dignity?

@karlmarx, our own "aggressive accounting policies" remind me of companies that do MTM (mark to market) OR cost, for their fixed assets (mainly properties) on the BS. As i understand more about investing, it becomes life in general (they are simply mirror images)