Upgrading to landed?

[phantom_opera]

To the thread starter, forgive me of being skeptical. A monthly income of $27,850 is entering the top 5% of family in Singapore based on stats from 2011. Your annual family income of 500-600k means monthly income of 50k ... that easily is top 1-2%. If I were in that situation, I will be surrounded by private bankers or financial consultants and it is probably NOT that difficult to have insider news especially if you work in civil sector. Why seek advice in internet and expose your income unnecessarily?

BTW, median family income per month including employer CPF for those who stay in landed in 2011 is 25k ...

And you said 10y ago your family income is 150k and now is 500-600k ... what sector is this hah? I want my son to be in leh

[new2mondrian]

Seekadvice,

On your poll "whether you aspire towards landed property", I really don't have a straightforward answer for you. I do not aspire to STAY in a landed property, though having said that, landed to me is just like any investment instrument. If it makes money, why not? So if one day, yields make sense vis a vis other classes of assets, I'd say why not. But at current levels of investment outlay versus yields (which is negative taking into account pest control charges for the tenant, exterior painting and replacement of roofing beams/tiles every 15 years or so), I'd say it does not make investment sense. So at the end of the day, the aspiration question only applies to the stayers, not the investors.

Two things which I am curious about, which I hope you don't mind me asking (though if you do mind, you can always choose not to answer)-

1) You mentioned you are a conservative couple and you have waited patiently on the sidelines for 3 years. So what is the trigger event for jumping into a $4m property now? The macroeconomic factors aren't particularly rosy, EU and US are mired in significant sovereign debt, demand drivers seem muted for the short to medium term. India is experiencing countless policy missteps. China is facing external headwinds. So why? Why now? Why $4m and not $2m?

2) For a household with income level of $500-600k, a total savings of $1.5m (since your present condo costs you $550k and you have an additional $1m in savings) after about 20 years of working is not particularly high. I am saying this cos your affordability assumptions for borrowing the next $2m seemed to be based on the number of years the current salary is required to repay, though you might also wish to consider your savings level, household expenditure levels and the sustainability of your current income for the next 20 years esp since you are buying a property for self stay.

Good luck on your bank valn! Do update us.

amk,

I am also keen to get a decent freehold in the ccr of at least 2000sqft of built in space. Actually prices have been softening in this segment, and people often overlook that a large contiguous land plot in the ccr (eg parvis at holland hill has land size of 244k sqft, with only 248 units) with much higher plot ratios and building height limits than landed could sometimes be more attractive.

[new2mondrian]

To the thread starter, forgive me of being skeptical. A monthly income of $27,850 is entering the top 5% of family in Singapore based on stats from 2011. Your annual family income of 500-600k means monthly income of 50k ... that easily is top 1-2%. If I were in that situation, I will be surrounded by private bankers or financial consultants and it is probably NOT that difficult to have insider news especially if you work in civil sector. Why seek advice in internet and expose your income unnecessarily?

BTW, median family income per month including employer CPF for those who stay in landed in 2011 is 25k ...

And you said 10y ago your family income is 150k and now is 500-600k ... what sector is this hah? I want my son to be in leh

Haha it is possible if he's in the Admin Service, a partner in an audit or law firm, or working in the financial sector. But which means his savings rate is not high.

[howgozit]

or loan shark....

Haha it is possible if he's in the Admin Service, a partner in an audit or law firm, or working in the financial sector. But which means his savings rate is not high.

[wind30]

To the thread starter, forgive me of being skeptical. A monthly income of $27,850 is entering the top 5% of family in Singapore based on stats from 2011. Your annual family income of 500-600k means monthly income of 50k ... that easily is top 1-2%. If I were in that situation, I will be surrounded by private bankers or financial consultants and it is probably NOT that difficult to have insider news especially if you work in civil sector. Why seek advice in internet and expose your income unnecessarily?

BTW, median family income per month including employer CPF for those who stay in landed in 2011 is 25k ...

And you said 10y ago your family income is 150k and now is 500-600k ... what sector is this hah? I want my son to be in leh

.... actually it is possible. 500k means 250k per annum each. It is quite high but not that high right.... you say until like mega rich kind.

The industry could have a lot of bonus, stock options, etc. With 4 months bonus + 13 months, that is 17 months. which is like 14.7k monthly....

your maths not too good lah.

[phantom_opera]

Haha it is possible if he's in the Admin Service, a partner in an audit or law firm, or working in the financial sector. But which means his savings rate is not high.

sis mondrian, you are very diplomatic .. your two questions also kind of drilling for more explanation why such high flyer family only has 1m saving after donkey years ... because they are so charitable or they suffer big loss in stock market?!

if i am a top banker ... do i really need to seek investment advice here?? if i am in admin service, isn't it easy for me to find out the upcoming TSL / ERL MRT exact location? if top lawyer or top auditor ... so free to TCSS here meh

[wind30]

... therefore isn't it more so that landed are more difficult to move in this market ? phantom may be a little exaggerating by using the word "stuck", but the fact is, large quantum sales are not moving.

"stuck" usually mean someone getting stuck with a property is is underwater and refuses to sell as it would mean losing money.

I am sure you can sell landed easily if you just price is slightly cheaper... which is still higher than what you paid for.

[phantom_opera]

.... actually it is possible. 500k means 250k per annum each. It is quite high but not that high right.... you say until like mega rich kind.

The industry could have a lot of bonus, stock options, etc. With 4 months bonus + 13 months, that is 17 months. which is like 14.7k monthly....

your maths not too good lah.

of course anything is possible, Jim Rogers comes to this forum also is possible i am sure not only me is skeptical ... the whole story from a beginning 10y ago of 150k until now 500k just does not seem to hold ... a condo bought 10y ago for 550k and 10y later thinking of buying 4m landed as family income already X 3.5 if you ask me, I think sis mondrian is much more believable

[howgozit]

could be Yowetan's alter-ego...

[wind30]

of course anything is possible, Jim Rogers comes to this forum also is possible i am sure not only me is skeptical ... the whole story from a beginning 10y ago of 150k until now 500k just does not seem to hold ... a condo bought 10y ago for 550k and 10y later thinking of buying 4m landed as family income already X 3.5

??? I am just saying 500k per annum household income is not really super rich.

You say until like surrounded by private bankers which is totally wrong. I think private bankers will look for bigger fish...

I think two normal people at the peak of their careers can easily earn 15k/month. These people are not top bankers, accountants, etc. They can be just a normal director in an engineering firm.

[phantom_opera]

could be Yowetan's alter-ego...

we need a language analysis on the posts ... if the way he write is like yowetan then

[howgozit]

we need a language analysis on the posts ... if the way he write is like yowetan then

it is even more brilliant!!! .... Yowetan switching writing styles to suit his alter ego... on the internet, anything is possible.

[phantom_opera]

??? I am just saying 500k per annum household income is not really super rich.

You say until like surrounded by private bankers which is totally wrong. I think private bankers will look for bigger fish...

I think two normal people at the peak of their careers can easily earn 15k/month. These people are not top bankers, accountants, etc. They can be just a normal director in an engineering firm.

sure ... I took back my words, not surrounded by private bankers ... and indeed you are right it is possible for both husband and wife to earn 30k per month

Such family is not super rich, but already in top 5%

Eh, dun be so serious, tcss is more fun

[howgozit]

Actually, my only doubt is on the price of this semi-d.

$4m seems a bit on the low side for a semi-d in D15 if it is done up, but too high if not.

The last I checked, those in Siglap is already going for high $4m to low $5m. Don't need to even think about those further East towards Goodman Rd, Jln Seaview... etc

Even Jln Limau Nipis in D16 stood firm at $4.7m ...

Can you give more details of the semi-d you are eying? I am actually quite interested...

[quote=seeksadvice]
It will mean i have to scrimp & save for at least 25 years to fully pay off a house in D15 - going for a cool $4m.
[quote]

[chho]

I suggest you should buy the $4m semi-d now and buy another property for rental collection when the opportunity comes up later.

Your mortgage payment for a $2m 25 year loan is probably around $7000 per month, pocket change for you in the scheme of things. There is more than enough buffer for you even if you factor in the possible increase in interest rates. Value of landed properties will probably hold or pegged to inflation in the next few years but it is unlikely to spike substantially after the recent run-up in price. I think price corrections for landed properties during future economic downturns will become increasing short termed and less severe as supply decreases in relation to condominiums. Maintenance is not very different from what you pay for a similarly sized condo. It will be a more stable asset to own compared to the more speculative condos.

Most Singaporeans will aspire to live in a landed property as it is a general confirmation of material success. Our government is unlikely to change the "locals only" policy as it is their interest that landed properties be owned by the most successful Singaporeans. Can you imagine the scenario of all the rich foreigners staying in landed houses while all the locals stay in condos and flats? It will lead to widespread unhappiness and the PAP will be voted out.

It is always better to buy another property for rental collection if you want to maximize wealth compared to simply staying in one for capital appreciation. But it is very difficult to find the right property now for investment as prices are way too high to justify the potential rental income. It only makes sense to buy a property for your own use rather than for investment in this current environment. I will definitely try to leverage up a little more for another rental property if I have an annual income of more than $500k when the yield spread improves.

You have been under living your life. It is time to enjoy life a little. You can afford it. Really.

Hi this is my first posting. Not quite sure if this question has been asked before?

I am currently living in a surburbia condo & hoping to sell it (fully paid) for a mil, top up with another hard-earned million, take a loan of $2m, to upgrade to a landed property.

It will mean i have to scrimp & save for at least 25 years to fully pay off a house in D15 - going for a cool $4m.

At the rate property prices are going, my palms get sweaty just thinking about it. Yet, a piece of advice that keeps reverberating in my head says to take the plunge, as landed supply can only decrease. And at these prices, some owners are prepared to let go & u can finally find something u really like, instead of settlng on smallish inter- terraces (looking at semi-d).

Is this sound advice? Someone else said i could buy a 2-3mil condo of 1,500-1,800sf in d10,11,15 for self stay while retaining my current condo. I get rental income & don't overstretch myself.

Who is right?

At this point, u might say "depends on your objective & holding power".

I think these are my objectives ( from most to least important):

1. Wealth maximisation....tend to believe in capital appreciation then rental. Hv heard plenty of horror stories from landlords. Also expat frens tell me they are spoilt for choices when they come to spore except agents always try to push D10

2. Maintenance costs & fuss...hv nvr lived in landed before but heard of roof leaks, pipes leaks, lack of carpark space, pests etc.

3. Space...living with parents, maid, wife & teen daughter....getting a bit crowded

4. Amenities & transport...D15 ...katong area seems quite promising even though mrt is a bit far to walk. In fact, quite the opposite, i hope eastern region line won't mean SERs for the house i am looking at.

If u are reading this, pl take a minute to respond:
1. Do u aspire towards landed ultimately?
2. Do u think landed over a 10 yr timeframe will yield better returns than the 2nd strategy above - buy bigger condo & rent out existing one?
3. Do u think spore govt will ever allow foreigners to buy landed, outside sentosa?

Thanks.





fears ....property correction, nightmare tenants, landed maintenance, etc.

[andy]

I suggest you should buy the $4m semi-d now and buy another property for rental collection when the opportunity comes up later.

Is Now a good time to buy landed? Whilst everyone can agree that over the longer term there will be appreciation but the prices now are at the stratosphere levels.

[howgozit]

IMHO,

if you are buying for investment, I think any property at current levels are hard pressed for decent returns in near future

Is Now a good time to buy landed? Whilst everyone can agree that over the longer term there will be appreciation but the prices now are at the stratosphere levels.

[chho]

The current economic environment is a complex one. On one hand you have people arguing that property prices will fall because of Europe and US, on the other hand interest rates are so low and are likely to remain low for the next couple years. Singaporeans have also generally done quite well in the last few years and so many people have stashed away some money to buy another property in the event of a downturn. Recent published reports all show that we are one of the richest countries in the world. How much will prices fall when everybody is waiting to buy? On top of that, the government has so many measures that they have rolled out to prevent an asset bubble which they can easily roll back during a downturn. It is not in their interest to see a crash in the property market.

I think the market is just going to "muddle through" over the next few years. It is neither going to boom nor bust. It is probably a good time to buy something for own use since the loans are dirt cheap. The guy makes more than $500k annually and he is staying in fully paid up a suburban condo???

Seeksadvice aspires to stay in a landed property. Obviously $2m is not going to get him much in today's market, definitely not in the East. I think he can afford to enjoy himself.

Seekadvice,

On your poll "whether you aspire towards landed property", I really don't have a straightforward answer for you. I do not aspire to STAY in a landed property, though having said that, landed to me is just like any investment instrument. If it makes money, why not? So if one day, yields make sense vis a vis other classes of assets, I'd say why not. But at current levels of investment outlay versus yields (which is negative taking into account pest control charges for the tenant, exterior painting and replacement of roofing beams/tiles every 15 years or so), I'd say it does not make investment sense. So at the end of the day, the aspiration question only applies to the stayers, not the investors.

Two things which I am curious about, which I hope you don't mind me asking (though if you do mind, you can always choose not to answer)-

1) You mentioned you are a conservative couple and you have waited patiently on the sidelines for 3 years. So what is the trigger event for jumping into a $4m property now? The macroeconomic factors aren't particularly rosy, EU and US are mired in significant sovereign debt, demand drivers seem muted for the short to medium term. India is experiencing countless policy missteps. China is facing external headwinds. So why? Why now? Why $4m and not $2m?

2) For a household with income level of $500-600k, a total savings of $1.5m (since your present condo costs you $550k and you have an additional $1m in savings) after about 20 years of working is not particularly high. I am saying this cos your affordability assumptions for borrowing the next $2m seemed to be based on the number of years the current salary is required to repay, though you might also wish to consider your savings level, household expenditure levels and the sustainability of your current income for the next 20 years esp since you are buying a property for self stay.

Good luck on your bank valn! Do update us.

amk,

I am also keen to get a decent freehold in the ccr of at least 2000sqft of built in space. Actually prices have been softening in this segment, and people often overlook that a large contiguous land plot in the ccr (eg parvis at holland hill has land size of 244k sqft, with only 248 units) with much higher plot ratios and building height limits than landed could sometimes be more attractive.

[chho]

Prices for landed properties are now at historical high. The question is what will trigger a fall in price? And if it does, by how much? Nobody knows what is going to happen in the short term but it is quite safe to assume that prices will only go up in the face of dwindling comparable supply in the long run. I definitely will not buy one to invest for rental income or capital appreciation now but I may buy one for own use given the cheap loans, depending on individual economic circumstances.

Is Now a good time to buy landed? Whilst everyone can agree that over the longer term there will be appreciation but the prices now are at the stratosphere levels.

[howgozit]

I think it is onerous to shift to one place to "try try to see how" and then trade up later when able. Furthermore, an inter-terr is a totally different experience from a Semi-D.

If anything... it will be the frustration of not buying a semi-d in the first place.

TS and spouse are already in their 40s... one kid already in her high teens, if they can afford it, they should just do it... like Nike says (oops.. phantom doesn't like this slogan, I may incur his wrath).

Rental return rates at today's prices are abysmal and... price appreciation/depreciation works either ways whatever you buy anyway... might as well enjoy your life...

In this respect, why not get a smaller (and cheaper) landed at $2.2-2.5m first? Landed living is not everyone's cup of tea. If it is, he remains vested in the game to trade up; if it isn't, well it is always easier to dispose of a $2.5-2.7m property than a $4.5m one (assuming break even at 10% margin).

[focus]

Has there been any experience of landed crashing due to high interest rates? i have not been in the market long enough to understand this.

But I would've thought that given the relatively illiquid nature of landed properties, the larger monthly commitment involved, landed owners will be one of the most prudent in doing their sums. For example, in my calculations, I've factored in scenarios where interest rates go up to 5%.....and hence, even considering 5-yr fixed rate packages....sadly these come with punitive prepayment fees.

Never say never.
Raine Wong(a seminar speaker cum lawyer) .. spoke of his 1997 experience with his multiple inte-terraces investments. I think he made quite a heavy loss on those.

[fclim]

You have been under living your life. It is time to enjoy life a little. You can afford it. Really.

How is it that living in a landed with a $2M loan considered enjoying life a little? I fail to understand.

[fclim]

Has there been any experience of landed crashing due to high interest rates? i have not been in the market long enough to understand this..

There has been no precedent because landed prices have generally been low, psf and quantum wise in the past. But not so, in the last 3 years or so. Landed has increased so much in the past 3 years not because of a real increase in the value of the land, but due to sentiments and beliefs like all properties now. In the worst of times, your $4M semi D will be competing with your neighbour who bought his semi D at $1.5M in the Eighties.

[howgozit]

Part of enjoying life is about living in a home of that you aspire to own... and that could be a landed, PC or for that matter even HDB... in this case it just happens to be a landed...

and with a $500-600k per annum income, surely you can understand that a $2M loan is not really a stretch don't you think?

How is it that living in a landed with a $2M loan considered enjoying life a little? I fail to understand.

[789]

You czn also hve fuly paid off landed owning PCs.

you can start a poll asking how many landed property owners here own more than 1 property.

[789]

??? I am just saying 500k per annum household income is not really super rich.

You say until like surrounded by private bankers which is totally wrong. I think private bankers will look for bigger fish...

I think two normal people at the peak of their careers can easily earn 15k/month. These people are not top bankers, accountants, etc. They can be just a normal director in an engineering firm.

Then perhaps, most friends and your family members are abnormal people because they dont earn $25K per month.

[samuelk]

You could be right too. People with high income or many properties do not need to tell everyone. Do you still remember this guy who said he has a household income of $800k a year. Came and gone quickly. .

bro. That newbie that starts with a Decksxxxxx is the real deal.

unless someone duplicate his nick

[789]

bro. That newbie that starts with a Decksxxxxx is the real deal.

unless someone duplicate his nick

I know that chap. super how lian guy. freeload at folks place, or course or money to how lian lah.

[samuelk]

I know that chap. super how lian guy. freeload at folks place, or course or money to how lian lah.

his character was not brought up for review. But his financial well beng was been question.

[carbuncle]

500k pa... every year can buy one MM in full cash wowwwwww