Since our move to Singapore last year and the realization that the rental prices are just simply phenomenal as compared to the time when Nil and I first met, we had been toying with the idea of buying a place to stay in and then later, for future investment. Those thoughts became more real when we explored the option of me going back to work a few months after arriving (and settling down) in Singapore. When I finally bit the bullet and started job-hunting, it was also then that we decided that we would invest in a place.
Our reasons are as follows (in case you’re thinking of coming down to Singapore to stay in the long run):
- Rental – Currently, I’m paying about $1.4K every month to stay in a two-bedroom unit that is around 80 sqm. It’s just nice for two people but it’s a lot, frankly for a small place. If I rent the place for two years, I’d end up spending at least $34K. And this is just for a HDB unit. If you’re thinking of renting a two-bedroom condo, be prepared to fork out at least $2.5K in rental. Your housing loan, on the other hand, will be around $1.5-2-5K depending on how much you take out and how long your loan is for.
- Future investment – By renting, I have nothing to show for the amount I pay. At the end of the day, everything belongs to the owner – from the walls to the mosaic tiles, fixtures and so forth – not me. If it were my own home, I can sell it or do what most people here do – rent it out. The Singapore rental market is always alive and at the moment, it’s booming. With careful selection, you can purchase a property that will never run out of tenants and I am not stupid to avoid doing just that. Also, putting my money to rest in a savings is a safe move but it’s not a smart one especially considering that interests in the bank is not even 2% but rental yield for a lot of properties are around 4% or higher.
- Rising prices – The property market here is booming. If I don’t buy now, I’ll never be able to afford a place. I’ve been monitoring the market for close to half a year and talking to people in the business. I know it well enough to know that renting is foolish despite what some people may think. In a country where the rental is higher than the loan, if you’re staying here for over one year and am with a family, buy a place.
Note that this applies to people like Nil and myself – family units. If you’re a singleton whereby your rental is affordable and cheaper than a loan, of course, it makes much more sense to rent a place. But for a good many of us who have families – Nil and myself, our friends with babies and all – buying is still a better option.
Over the coming few weeks, I’ll cover a series of entries dedicated to property hunting here in Singapore, my own experiences with procedures and the legalities. I figured that it’d shed some light into the whole process, especially for people who are not familiar with the Singapore real estate market. And yes, if you haven’t guess, we have found a place and started the paperwork. More on that – hunting down your dream home – in the next entry!