We've been living in Singapore now for two years, and have watched the rental market spiral out of control. We currently rent a condo apartment in Woodsvale, and the monthly payment is absolutely exorbitant. I am here as a P1 Employment Pass Holder.We made the decision at the last renewal of our lease, that one more year is enough. Our plan is to apply for our permanent resident status over the next couple of months, which is academic as far as the approval. Once we have our PR and our current lease expires, we are eligible to purchase a resale HDB (Housing Board).
Initial calculations indicate that by going down this avenue, show that we can purchase quite a large flat in a relatively 'opulent' zone, and we will still reduce our monthly expenditure on housing by almost a half. Unbelievable!!
It seems like we are not the only people doing this. Interestingly enough, the latest reports from local property agencies show that almost one in five HDB flats sold recently went to PRs.
Housing experts attribute this to a combination of rising rents and low interests rates as the driver of this demand.
According to PropNex chief executive Mohamed Ismail, the number of apartments sold to permanent residents is a two-fold increase from a year ago, when PRs bought up 10 to 15 per cent of homes sold.
It will be interesting what will happen to the rental market over the next couple of years - personally, I HOPE IT SENDS MY CURRENT LANDLORD BROKE - GREEDY PEOPLE!!!
Property Prices Are Destined To Plunge
(EXTRACT courtesy of Salary.SG)
The STI stock market index has plunged about 20% from its peak, but the URA property index still seems to move up exponentially.
How can this be?
Let’s study the STI graph superimposed over the URA property index graph. Both graphs are scaled such that their time axes coincide, and their Asian financial crisis bottoms & dotcom peaks are at the same levels. STI is indicated by the dark blue line, while the pink line with blue crosses is for the URA index for condominiums (the other lines are for detached, semi-detached, terrace and apartments):
You should be able to see from the 2 graphs that the property bottom in end 1998 lagged the stocks bottom by about a quarter (i.e. 3 months). Similarly, the property peak in mid 2000 also lagged the stocks peak by about 1 to 2 quarters.
Now, fast forward to end 2007. The stock market has clearly tanked, amidst high inflation and comparatively stagnant salaries. But property is apparently still moving up, up and up! This can’t continue.
Property prices must plunge by at least 20%.
Want more evidence? In February, property developers were so spooked by the worsening economy that they launched only 343 units in the whole country, out of which only a miserable 170 got sold (excluding ECs).
So the one of the first questions might be, "why don't you buy a private property instead of HDB?"... Well, let me make it quite clear dear readers, that our decision to buy as opposed to rent is a 'no brainer' - as I've written in so many of my other articles, when we moved to Singapore, we wanted to plant out roots and integrate into the local community - hence our decision to move to Woodlands. However, condo living just doesn't allow us to mix the way we want and to breathe the local lifestyle... yes, we could opt for private property, but it is our intention - actually our complete desire - to move to a HDB estate, where we can truly feel localized and offer the local community and the wonderful people of Singapore all of which we have to offer!!
5 comments:
I don't know Pete, let me explain. I was talking to a banker recently. According to the banker, the housing loans are down rather than up when it should be up due to demand and such. The recent shortage of apartments is due to foreigners buying up most of the high-end units leading to such this state of affairs. Yes, the market price increase was due to foreigners too though local speculators did play a part. The rental part was affected by the en-bloc sales when people buy heavily leading to a shortage of available units, thus. Quoting you, 'I HOPE IT SENDS MY CURRENT LANDLORD BROKE - GREEDY PEOPLE!!!' I think you are barking up the wrong tree here. I doubt if you can blame the market on landlords when the causes are foreign in origin.
Hi mate, I didn't actually write too much about the situation when we renewed our lease - our landlords (PRs from China), are doing some illegal things when it comes to their property ownership in SG.
We only recently discovered this. On top of this, when it was time to renew, they expolited the market increase by increasing our rent by more than the market value. Due to our travel and other commitments, we were not in a position to move home at that time - we were just to busy, and they knew this.
We did negotiate somewhat, but we are still today paying around 1/3 higher than any of the other tenants in our block.
The way they have conducted business is downright greed driven, and I will in no way go back on my comment. You show me anyone else in Woodlands paying around $3500 for month on a 3-room apartment.
I agree on your synopsis on foreign property investment. It supports my article - however the reason behind the rental increase has nothing to do with my landlords' greed.
Holy Crap ! $3500 in Woodlands ?? good god ! you guys are seriously ripped off ! However rental rates for the past years had been lower than what owners could have got from the fixed deposits. Don't know about now though...
Hi Pete. I saw a link to this article on some guy's forum. Looks like he's got way too much time on his hands. I know you and your family, I know how much effort you put in volunteering in the community here at Sengkang West, and as a Singaporean just wanted to offer up my support against any negativity these kind of people use to try and get under your skin. I've told you before - with what you give back to the community, you are more Singaporean than most Singaporeans. :)
Thanks for the kind words, Joanne - interestingly enough, this is still getting air play so many weeks later - not sure what the trolls are trying to prove. Anyway, for the record (since I wrote this response both here and my star blog, I've had a literal outpouring of support from so many wonderful Singaporeans - it's extremely heartening and I'm touched to know that the anti-foreigners and trolls are really just the minority in Singapore - one of the reasons we love our home so dearly - the beautiful, kind hearted majority that make up the people of SG!!):
http://www.aussiepete.com/2011/12/we-love-singapore-for-record.html
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