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Singapore Private Property prices still up or down? Part III


pChou
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5 hours ago, ToyotaShuttle said:

Yes, must pay interest. But when interest rate is 0.7% and you get 2.5% from CPF, that's free cash 

Assuming a monthly installment of $2.5k, the bank interest probably $250 per month but the CPF interest of 2.5% is only on $2.5k which is $62.50.  So the net is still losing money based on my method.

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3 minutes ago, awhtc said:

Assuming a monthly installment of $2.5k, the bank interest probably $250 per month but the CPF interest of 2.5% is only on $2.5k which is $62.50.  So the net is still losing money based on my method.

The additional bank interest is also only on the 2.5k leh.

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22 hours ago, ToyotaShuttle said:

How is it free money for the banks? There are many schemes. I am on OCBC - can choose between:

1. Full deferment

2. Pay interest only

I choose #2 as I am renting out the property so can offset income tax with the interest. Interest is also very low - 0.7% only. 

Why do I say it is free money? For my example, I usually pay about 3k per month with CPF. Now I am paying $500, I can put the $2500/month into CPF (repaying whatever I used previously). This $2500 will acrue interest at 2.5% while the $2500 that I am not paying the bank will acrue interest at 0.7% so I get the 1.8% interest FOC. 

Thank you OCBC!

But your extra interest to the bank for deferment is greater than the interest you get for a few months of depositing 2.5k.

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19 hours ago, ToyotaShuttle said:

It wasn't mafan at all. Just an online form (less than 5 mins) and you get the approval via email few days later.

But my point is that people don't bother to apply because they still have strong cashflow and have certainty that they will have cashflow in coming months.

Safety net should be few years if the cashflow can only sustain the coming months then they should be worried🤣

Edited by Ginyu
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55 minutes ago, Karoon said:

But your extra interest to the bank for deferment is greater than the interest you get for a few months of depositing 2.5k.

The extra interest is also based on the 2.5k that you haven't repaid leh. How can it be more?

Bank charge you 0.7%, you receive 2.5%. 

You shoudl think through the concept again.

29 minutes ago, Ginyu said:

Safety net should be few years if the cashflow can only sustain the coming months then they should be worried🤣

Exactly. And if they are worried then shouldn't they sign up for this scheme to secure a few more months of cashflow?

Don't sign up can only mean they are either ignorant (don't know about the scheme, don't know the benefits of the scheme, don't know their own situation - you pick their type of ignorance) or they feel secured as they have a few years of safety net.

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5 minutes ago, ToyotaShuttle said:

The extra interest is also based on the 2.5k that you haven't repaid leh. How can it be more?

Bank charge you 0.7%, you receive 2.5%. 

You shoudl think through the concept again.

 

Are you sure? Think you underestimate banks. This one on MAS website about the covid assistance for mortgagees... 

Quote

MONETARY AUTHORITY OF SINGAPORE


FREQUENTLY ASKED QUESTIONS ON REPAYMENT DEFERMENT FOR RESIDENTIAL PROPERTY LOANS FOR INDIVIDUALS

What are the features of a mortgage repayment deferment?

.....However, you should keep in mind that deferring payments and 
extending your tenure mean that you will be paying more interest 
in total. Therefore, it is better not to defer repayments if you do 
not need to......

Illustrative Example
For a mortgage with $200,000 outstanding and a remaining tenure 
of 20 years, and assuming a 2% interest rate, the extra interest cost 
over the remaining tenure will be about -
 $1,300 for a principal-only deferment period for 9 months, and 
$2,930 if the tenure is also extended by 9 months.
 $1,920 for a principal and interest deferment period for 9
months, and $3,570 if the tenure is also extended by 9 months.

 

 

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17 minutes ago, Karoon said:

Are you sure? Think you underestimate banks. This one on MAS website about the covid assistance for mortgagees... 

Had the impression that loans should be cleared as quickly as possible. Never realized by extending the loan period got benefits🤣

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On 9/21/2020 at 10:35 AM, Wt_know said:

my chittybank apps keep prompting me want to convert my monthly purchases to installments ....

nabei ... i message them I FULL CASH ... lol ... 

what u buy on monthly basis ? 😅 must be a big sum that interest Citi

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8 hours ago, Karoon said:

Are you sure? Think you underestimate banks. This one on MAS website about the covid assistance for mortgagees... 

 

Alamak bro.... seriously, this is pri school maths. Not sure what there is to argue about...

Quote

Illustrative Example
For a mortgage with $200,000 outstanding and a remaining tenure 
of 20 years, and assuming a 2% interest rate, the extra interest cost 
over the remaining tenure will be about -
 $1,300 for a principal-only deferment period for 9 months, and 
$2,930 if the tenure is also extended by 9 months.
 $1,920 for a principal and interest deferment period for 9
months, and $3,570 if the tenure is also extended by 9 months.

1. They assume 2% interest rate (actual is lower of course). 

2. You put the money in CPF and get 2.5% interest

3. 2.5% is higher than 2%

4. you "borrow" money (by deferring payment) at lower interest rate than you loan (by putting into cpf)

5. profit?

Frankly it is one thing to say that the sum is too small and you can't be bothered (not worth your time/effort) but to claim that there is no profit is like being a flat earther.

Edited by ToyotaShuttle
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8 hours ago, Ginyu said:

Had the impression that loans should be cleared as quickly as possible. Never realized by extending the loan period got benefits🤣

A loan is a financial tool - no different from the opposite when you deposit money into bank for interest.

It is how you make use of this tool that matters. Even cash rich companies like apple borrow money to pay dividends even though they have more than enough cash on hand.

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13 hours ago, ToyotaShuttle said:

Alamak bro.... seriously, this is pri school maths. Not sure what there is to argue about...

1. They assume 2% interest rate (actual is lower of course). 

2. You put the money in CPF and get 2.5% interest

3. 2.5% is higher than 2%

4. you "borrow" money (by deferring payment) at lower interest rate than you loan (by putting into cpf)

5. profit?

Frankly it is one thing to say that the sum is too small and you can't be bothered (not worth your time/effort) but to claim that there is no profit is like being a flat earther.

Some people need to put scenario 1 next to scenario 2, side by side compare the actual cash flow then can understand.  

There are also others who just can’t believe (either due to ignorance or just can’t be bothered to go and find out and understand) there are schemes out there that can be beneficial.  They instead cast doubts or scepticism to something that seems too good to be true.  

For all my investment properties, I did the same too...service the interest, defer the principal and tenure. After all, the extra buffer can be used to buy time in the greater scheme of things to wait out whatever crisis one may face now or in the future.  What’s there not to like?

Kudos to you for sharing.....   

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3 hours ago, F10_Blackhawk said:

Some people need to put scenario 1 next to scenario 2, side by side compare the actual cash flow then can understand.  

There are also others who just can’t believe (either due to ignorance or just can’t be bothered to go and find out and understand) there are schemes out there that can be beneficial.  They instead cast doubts or scepticism to something that seems too good to be true.  

For all my investment properties, I did the same too...service the interest, defer the principal and tenure. After all, the extra buffer can be used to buy time in the greater scheme of things to wait out whatever crisis one may face now or in the future.  What’s there not to like?

Kudos to you for sharing.....   

I resisted helping show them the actual cash flow side by side because as I said, it is pri sch math!

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10 minutes ago, ToyotaShuttle said:

I resisted helping show them the actual cash flow side by side because as I said, it is pri sch math!

are you sure its pri school math?

my son is just starting to be introduced to simple interest concepts in sec 1 in his non elite school

😬

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16 minutes ago, Enye said:

are you sure its pri school math?

my son is just starting to be introduced to simple interest concepts in sec 1 in his non elite school

😬

You can try testing him.

Bank loan to you at 0.7% and you can deposit and gain 2.5%. Is it free money? 😁

Let us know what he says.

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https://www.straitstimes.com/politics/singapore-sees-its-population-fall-for-first-time-in-10-years

As the Covid-19 pandemic closed off borders and shuttered businesses, Singapore saw its population dip for the first time in 10 years as many foreign workers left after losing their jobs.

There was movement in the other direction too, as many Singaporeans who had been living overseas, decided to head back home.

The number of Singaporeans abroad fell from 217,200 last year to 203,500 this year. The decline was more pronounced among those who are 20 to 24 years old.

Singapore's non-resident population - the foreigners who are here as students or on work passes, among others - shrank by nearly 35,800, on the other hand, to 1.64 million. This was a 2.1 per cent decline and the decrease outstripped the drop in overseas Singaporeans.

The result of this flux was that Singapore's total population dipped by around 17,800 over the past year to 5.69 million, the annual Population in Brief report said.

Foreign employment in the service sector was reduced, with work permit holders seeing the largest drop, the report added.

It noted that since the tightening of Singapore's immigration framework in late 2009, the country has accepted about 30,000 new permanent residents a year.

It said: "This keeps the PR population size stable, and provides a pool of candidates who may be suitable for citizenship. The majority of our PRs are aged between 25 and 59 years."

The pace of immigration will be kept measured and stable, said the report.

The number of citizens grew by 0.6 per cent to reach 3.52 million in June, while the PR population remained stable at 0.52 million.

Last year, 22,714 individuals were granted citizenship and 32,915 were granted permanent residency - numbers that have been largely stable for the last 10 years.

5.69 million Singapore's total population, which dipped by around 17,800 over the past year, the annual Population in Brief report said.

1.64 million Singapore's non-resident population. It shrank by nearly 35,800, a 2.1% decline and outstripped the drop in overseas Singaporeans.

Of the new citizens, 1,599, or 7 per cent, were children born overseas to Singaporean parents.

The population growth rate over the past five years was also slower compared with the previous five-year period.

With increasing life expectancy and lower fertility rates, the proportion of citizens aged 65 and above is rising, and at a faster pace compared with the last decade.

The proportion of citizens aged 65 and above increased from 10.1 per cent in 2010 to 16.8 per cent this year. This figure is projected to climb to about 23.7 per cent by 2030.

The median age of citizens also inched up from 42 years to 42.2 years over the past year.

Sociologists were struck by Singapore's ageing society and the reduction in the number of work permit holders.

National University of Singapore sociologist Tan Ern Ser observed that the decline in the non-resident population is largely due to work permit holders, who take up jobs which Singaporeans are not particularly keen on in the first place.

More importantly, he said, it signals that some sectors of the economy are not doing well. "The issue of foreigners in our midst cannot be addressed simply by cutting down their numbers, without negative consequences for our economy."

Singapore Management University dean of students and professor of sociology Paulin Straughan, told The Straits Times that in the long run, this could indicate that Singapore should be less dependent on manpower, and rely more on mechanisation and digitalisation.

"That may be a good thing because of our manpower constraints, greying population and sustained low fertility rate."

She added that more attention should be paid to unlocking the potential of older Singaporeans.

"This is a group of potential volunteers and drivers of community-based self-help initiatives," she said, adding that economic activities should be curated that will leverage their skills and life experiences.

Edited by Nostalgia
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