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Is sg property cheap now?
Yesterday, 04:47 PM.
Post: #31
RE: Is sg property cheap now?
(Yesterday, 11:03 AM)specuvestor Wrote: I think own use property is generally prepaid expense. Value of pre-paid expense going up means cost of living going up, and a comparable switch to other dwelling may not be beneficial unless one switches between pte -HDB L99. Expense is actually still expense, just that the annual rate is locked in when you purchase the HDB.

https://www.valuebuddies.com/thread-4574...#pid149062

Probably only FH can be considered Asset per se, though I know many argue on the gazette possibility.

There is a difference between HDB 99 years and Private Condo 99 years. 

For Private Condo, you own the strata title which means u own a percentage of the land the condo is on. This also means any private entitle can come in to enbloc. Not only that, anyone in this world can buy ur unit(more demand). Because it has amenities and ample carpark, expats would prefer renting a condo unit. There is no rental restriction and soon the rental tenure may get shortened even more from the existing 3 months(air bnb).

For HDB, you dont own any strata title, means you dont own the land underneath(hence its cheaper). Which means no private entity can enbloc ur area and even if gov comes in the sers, the common area will not be included and the premium will very likely be thin. For HDB only PR and Sgreans can buy(much less demand), there is also a quota for race when you rent(numerous restrictions). HDB is subsidies affordable housing, gov will do all they can to keep the price down and affordable(decoupled from private market)

If we are talking about the diff kinds of condo rental assets. My view is freehold near mrt is better than leasehold near mrt is better than freehold far from mrt is better than leasehold far from mrt. Ultimately for condo, if your location is good, maintenance fee will creep up after 20 years to an amount that is hard to swallow, then developers will come in to enbloc. So depreciation of land value for a private condo is not a big problem if its an investment asset.

Own view

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Yesterday, 05:24 PM.
Post: #32
RE: Is sg property cheap now?
Just to clarify my context is own-use property. Capital value means little in terms of actual expense, it is more the location, convenience etc that is more important. You "make money" in one property just to pay heightened expense in another property (assuming similar). If one is thinking of selling, enbloc etc there is an investment component in the decision making. It's like some people buying (say similar) sedans using the residual value of their older car as deposit and constantly taking more loans and feeling good about it.

To paraphrase Buffett if we consume burgers we rather burger price stay low, unless we sell burgers for a living. Property/ land is a factor of production which adds to the costing of the goods and service. That's the problem when you have asset inflation (post 2009) but not corresponding real economic output increase.
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4 hours ago.
Post: #33
RE: Is sg property cheap now?
(Yesterday, 08:49 AM)Porkbelly Wrote: It is unwise to consider the home we live in as an asset.

It might be useful to know its market value, just for knowledge.
In any circumstance, we need shelter. Selling our home for a gain will
very likely cost a similar amount to replace.

Unless the replacement home is in an area that has low values.
It would also very likely have poorer amenities and further away from
central areas. School ( if there are kids ) will be further away too.


Or a smaller home in the same area. Which means discarding furnishings and
coping with a smaller home.

I consider a home to be a personal sanctuary. Having the home being sold
as en bloc or SERS can be a bonus but the process of getting a replacement can be
very tiring, with anxieties. It may also come at a time when we are much older and
loans may not be so easy.

Smile

An asset is an asset. Whether is a personal sanctuary or not. Not one expecting it to be sold because it is classified as such.
Is just a measure of what you have.

For example, if you just need a lifestyle of 5K monthly worth property, having a home that can command a rental value say 10K is expensive and do not makes financial sense. Having it as an asset gives you a good view on how to manage all your asset. It doesn't mean you have to touch it. Some may says there is personal attachment to the property of 10K worth. Then we need to be aware we are "spending" 10k monthly for it. Is perfectly fine that we can afford it. Is just an irreplaceable asset for those who can afford but nevertheless an asset.
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1 hour ago.
Post: #34
RE: Is sg property cheap now?
(4 hours ago)corydorus Wrote:
(Yesterday, 08:49 AM)Porkbelly Wrote: It is unwise to consider the home we live in as an asset.

It might be useful to know its market value, just for knowledge.
In any circumstance, we need shelter. Selling our home for a gain will
very likely cost a similar amount to replace.

Unless the replacement home is in an area that has low values.
It would also very likely have poorer amenities and further away from
central areas. School ( if there are kids ) will be further away too.


Or a smaller home in the same area. Which means discarding furnishings and
coping with a smaller home.

I consider a home to be a personal sanctuary. Having the home being sold
as en bloc or SERS can be a bonus but the process of getting a replacement can be
very tiring, with anxieties. It may also come at a time when we are much older and
loans may not be so easy.

Smile

An asset is an asset. Whether is a personal sanctuary or not. Not one expecting it to be sold because it is classified as such.
Is just a measure of what you have.

For example, if you just need a lifestyle of 5K monthly worth property, having a home that can command a rental value say 10K is expensive and do not makes financial sense. Having it as an asset gives you a good view on how to manage all your asset. It doesn't mean you have to touch it. Some may says there is personal attachment to the property of 10K worth. Then we need to be aware we are "spending" 10k monthly for it. Is perfectly fine that we can afford it. Is just an irreplaceable asset for those who can afford but nevertheless an asset.

Yep this concept is known as imputed rent in Economics, whether people realise it or not there is a cost attached to staying in your own owner occupied home and that cost is the market rent.

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