Is it a good time to buy a landed property to stay now?

[Throttle2]

Tadao Ando inspired theme?

Yes correct

Edited June 10, 2019 by Throttle2

[GEBuyingAgent]

My folks thinking about purchasing a landed (F/H) property now (to stay). It's about 980K. Land size 1300 sqft, built up about 1500 sqft. Is it wise for them to get it now? Is the price okay?

 

Thanks.

In my opinion, if you buy to stay, it would be better to buy the house, not the land. In addition, the re-sale house will be cheaper in this current market. Hope this help.

[Throttle2]

Don't think it is a big loan but the leverage has definitely went up. I think he is expecting to work another 10 years to pay down the loan but i think he has a good job and i am sure he has done his maths. He doesn't believe in financial instruments, so his primary residence is also his biggest investment asset.

One mistake which people make is to take their primary residence as investment.

 

Yes sure, it can be sold when the time comes but at what price or should i say cost?

 

Just like a cow which you raise from a calf, even that is not easy to slaughter

Especially when you are not a farmer with loads of cows.

 

Similarly if you dont have many properties, selling the only primary one is not easy.

It become more of a last resort.

 

However, i also do beleive that he must have worked it out.

Whether it will eventually go in line with his calculations is another thing.

[Voodooman]

One mistake which people make is to take their primary residence as investment.

 

Yes sure, it can be sold when the time comes but at what price or should i say cost?

 

Just like a cow which you raise from a calf, even that is not easy to slaughter

Especially when you are not a farmer with loads of cows.

 

Similarly if you dont have many properties, selling the only primary one is not easy.

It become more of a last resort.

 

However, i also do beleive that he must have worked it out.

Whether it will eventually go in line with his calculations is another thing.

If wrong, he probably won't have to join one MCFer at Bedok reservoir, I guess.

 

When younger, my primary residence was also part home, part investment. Now I see it more as a consumption item as it is hard to liquidate. Too old for that downgrade shit.

 

I am actually quite curious how much of middle class SGeans networth (after adjusting for debt) are tied up in their primary residence, given the high property prices here. Is 50% too much or it should be closer to 30%, which I read from some financial gurus is the right level. Think 30% will be tough for many here, save for the elites and business owners.

[Throttle2]

If wrong, he probably won't have to join one MCFer at Bedok reservoir, I guess.

 

When younger, my primary residence was also part home, part investment. Now I see it more as a consumption item as it is hard to liquidate. Too old for that downgrade shit.

 

I am actually quite curious how much of middle class SGeans networth (after adjusting for debt) are tied up in their primary residence, given the high property prices here. Is 50% too much or it should be closer to 30%, which I read from some financial gurus is the right level. Think 30% will be tough for many here, save for the elites and business owners.

Yes , i truly think that your estimation is definitely leaning towards the correct angle.

I would in fact, say that its higher than 50% for most. The reason is probably, singaporeans take very big bites on Property and it is the easiest asset to leverage on.

 

In my opinion 50% is quite a good balance in SG due to the high cost of properties yes.

In other countries i would believe that ihat would be closer to 25-30% for middle class.

[Volvobrick]

If wrong, he probably won't have to join one MCFer at Bedok reservoir, I guess.

 

When younger, my primary residence was also part home, part investment. Now I see it more as a consumption item as it is hard to liquidate. Too old for that downgrade shit.

 

I am actually quite curious how much of middle class SGeans networth (after adjusting for debt) are tied up in their primary residence, given the high property prices here. Is 50% too much or it should be closer to 30%, which I read from some financial gurus is the right level. Think 30% will be tough for many here, save for the elites and business owners.

 

My gut feel is at least 70%-80% or even more than 100% of net worth.

 

Let's say someone has a 1M property and 50% paid up leaving loan of 500k.  Plus cash in bank 100K, shares 200K, car 100K fully paid.  We don't count CPF as those are not liquid.  Net assets/worth would be 900K (1.4M - 0.5M),  

 

Property as a percentage of net worth 1M/900K = 111%

 

Unless the property is (almost) fully paid, it is likely to be more than 100% of net worth!

[Ct3833]

My gut feel is at least 70%-80% or even more than 100% of net worth.

 

Let's say someone has a 1M property and 50% paid up leaving loan of 500k. Plus cash in bank 100K, shares 200K, car 100K fully paid. We don't count CPF as those are not liquid. Net assets/worth would be 900K (1.4M - 0.5M),

 

Property as a percentage of net worth 1M/900K = 111%

 

Unless the property is (almost) fully paid, it is likely to be more than 100% of net worth!

It depends on the age of the person also, as one gets older , his risk appetite and financial position will be very different from a relatively younger person. The ratio will drop drastically towards one's retirement age. Edited June 13, 2019 by Ct3833

[Ct3833]

Not everyone so lucky. When I got mine, the previous owner owned it for 13 years and still sold it at a loss and it was a forced sale by his bank. He was unlucky to have bought when property price was at a peak.

 

My plan has been to sell off mine when near retirement and buy a HDB or condo. No need such a big space anymore by then.

My plan is to stay till I leave this world. Landed offers very big floor space , condo of the same floor space would cost a lot more and in fact wont find a condo of the same floor space. I want to have enough space when my grandchildren start visiting me during weekend or major occassions like new year or public holiday next time. Yes I may get money selling off landed, can even buy condos to rent out, but those money wont give me happiness, it is the family bonding, the family happiness that keeps me happy. I am the old style thinking type.

 

And I want to borrow these quotes from T2.......

"

How do we spend the money to balance our lives?

How do we use the money to gain happiness in the form of comfort and time saved.

How do we use the money to improve the life experiences of first and foremost our loved ones?

"

Well said.

Edited June 13, 2019 by Ct3833

[Throttle2]

My plan is to stay till I leave this world. Landed offers very big floor space , condo of the same floor space would cost a lot more and in fact wont find a condo of the same floor space. I want to have enough space when my grandchildren start visiting me during weekend or major occassions like new year or public holiday next time. Yes I may get money selling off landed, can even buy condos to rent out, but those money wont give me happiness, it is the family bonding, the family happiness that keeps me happy. I am the old style thinking type.

 

And I want to borrow these quotes from T2.......

"

How do we spend the money to balance our lives?

How do we use the money to gain happiness in the form of comfort and time saved.

How do we use the money to improve the life experiences of first and foremost our loved ones?

"

Well said.

 

[Voodooman]

My gut feel is at least 70%-80% or even more than 100% of net worth.

 

Let's say someone has a 1M property and 50% paid up leaving loan of 500k. Plus cash in bank 100K, shares 200K, car 100K fully paid. We don't count CPF as those are not liquid. Net assets/worth would be 900K (1.4M - 0.5M),

 

Property as a percentage of net worth 1M/900K = 111%

 

Unless the property is (almost) fully paid, it is likely to be more than 100% of net worth!

The CPF of most locals are in their primary residence actually. One illiquid asset for another. Lol

[Throttle2]

The CPF of most locals are in their primary residence actually. One illiquid asset for another. Lol

You very bad leh, pointing out the painful truth.

Muayhahaha

[Voodooman]

You very bad leh, pointing out the painful truth.

Muayhahaha

Yup, if the primary residence is also paying for retirement as CPF accounts are totally drained, something has got to give? Maybe that is also why we have more and more asset rich folks asking for handouts, ie rebates, which is not right.

[Jamesc]

I agree with everyone here.

 

If you have the money spent and enjoy.

 

 

I don't have money but I still spend and enjoy.

[Throttle2]

Yup, if the primary residence is also paying for retirement as CPF accounts are totally drained, something has got to give? Maybe that is also why we have more and more asset rich folks asking for handouts, ie rebates, which is not right.

Yes totally

 

Its not easy to sell one's primary

[blueunicorn]

Property prices appreciate in due time so it is best to purchase while it's still being developed and within reasonable price. But it's price would depend certain factors such as location, accessibility, commercial development within the area and other factors. Here's an article about Property Auctions to give you an insight.

[Ct3833]

I agree with everyone here.

 

If you have the money spent and enjoy.

 

 

I don't have money but I still spend and enjoy.

Haha cant be real but good joke. And for once you did not quote that 3 magic letters. keep it up!

Every day is a good day to buy landed.

 

If can afford should buy one every day.

 

Good joke also and so true

[Jamesc]

Haha cant be real but good joke. And for once you did not quote that 3 magic letters. keep it up!

Good joke also and so true

The 3 letters most hated by people in MCF that cause so much suffering to everyone here?

 

You mean COE?

 

[Ct3833]

The 3 letters most hated by people in MCF that cause so much suffering to everyone here?

 

You mean COE?

 

Haha ok ok. I realise it depends on who, different people have different 3 letter word......for me, it is 人之初。。。

By the way, in case you want to buy landed so often, remember to pick 999 or FH only.

Edited August 16, 2019 by Ct3833