What is the point in buying a home in Singapore?


  • admin

    What is the point in buying a home in Singapore?


  • admin

    There are a few reasons that would motivate a home purchase in Singapore.

    Investment
    The situation you described, where a person takes up a mortgage of a few decades, is but one of a few property-purchasing scenarios in Singapore. In that particular case, it is likely that the person in question probably feels that the property would probably appreciate, and he/she might be able to sell it at a profit in years to come.
    It's worth bearing in mind, though, that even though some people may take up a mortgage payable over the course of decades with a bank, most of them usually sell the property for a profit in the intervening years, pay off the mortgage and pocket the difference.

    Stability
    Another reason for purchasing a home would be to establish a feeling of stability. The psychological aspects of having a place you can call your own, the familiarity of going home to the same place, and the comfort to do as you please in it is a significant attraction to most people.

    Perceived vs. Actual Cost
    The abiding assumption is that property in Singapore is expensive, but it depends on what kind of property one is describing. Is it an HDB flat? Executive condominium? Lease-hold/free-hold apartment? Landed property? The monthly mortgage installments one would pay would, of course, depend on the kind of property purchased.
    I have more than a few friends who have already fully paid off their HDB loan within ten years or less, so it is not always the case that one would be burdened with a mortgage for many years.

    The Trouble with Renting
    The flip side of renting is the fact that one is at the mercy of the landlord. Whether the rental you would pay is less than the monthly mortgage payment would depend on the kind of place that you would be happy staying in. Some things to consider when renting:

    1. Is the property conveniently located (near your workplace and/or amenities)?
    2. Is the landlord a reasonable person?
    3. Are you living there alone or with a family?
    4. Are you renting just a room or the entire property?
      As someone who has lived in rented apartments before, being a tenant isn't always a walk in the park as finding the right kind of place, with the right type of person as your landlord takes a healthy dose of luck.
      Again, depending on one's circumstances and the market, paying rent may cost you less or more than purchasing a place. The advantage of purchasing, though, is that at the end of the day, you will have a place to call your own, as opposed to having to move and finding another place to rent should circumstances change.

    Lifestyle
    While it's true that the money used to pay for a mortgage could be used for traveling, one must bear in mind that life is a long journey and circumstances change. While you may feel now that you'd much instead use the money to travel the world, it's also likely that there may come a time where you would like to settle down and have a place to call home.
    Of course, that's merely one possibility, and only you would know what's most important to you. Still, it's entirely feasible that with careful budgeting and planning, you might even be able to purchase a property and travel at the same time. In any case, asking on Quora is an excellent first step towards evaluating your priorities and also learning more about the considerations associated with purchasing a property in Singapore.

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    You could, but then to rent a decent room in Singapore, it costs about 800 a month. If you do the math, it works out to about 8400 a year. Assuming you start paying rent at 25 and live to 85, which you probably will considering how good Singapore's healthcare system is, that's about 60 years of rent. With that 500,000, you could have just gotten yourself a decent flat with quite a bit of extra cash to spare. Plus, unless you intend to stay single all your life, you'd probably want to get a flat to start a family, or for you and your wife to get some privacy at the very least. Inflation's also going to kick in after a while, and the value of your property would increase, so you could also sell it for a profit. With all these benefits, why wouldn't you want to get a flat?