Issue 289

Copyright 2011-2016 www.propwise.sg. All Rights Reserved.

CONTENTS

FROM THE

EDITOR

p2

Should You Buy or Rent? 4 Factors to Consider

p8

Resale Property Transactions

Welcome to the 289th edition of the

Singapore Property Weekly.

Hope you like it!

(November 21 November 25)

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SINGAPORE PROPERTY WEEKLY Issue 289

Should You Buy or Rent? 4 Factors to Consider

By Property Soul (guest contributor)
A friend recently moved from one rented
home to another. The family of four is still
staying in a condominium in the east side of
Singapore, but this time a better one it is
newer, bigger, and at a lower rent too.
How to decide whether to buy or rent?
It is a never-ending debate whether one
should buy or rent. It is very much an
individual choice. As I have mentioned in my
book No B.S. Guide to Property Investment,
the rent or buy decision is often influenced by
four factors: age, lifestyle, finances and the
property cycle.

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SINGAPORE PROPERTY WEEKLY Issue 289

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SINGAPORE PROPERTY WEEKLY Issue 289

Where is the buy-rent breakeven point?
If you are a foreigner in Singapore, your rent
or buy decision can be based on a
comparison on the total costs of the two
options. The buying option involves fixed and
variable costs. The fixed costs of buying a
home include the initial downpayment, buyer
stamp duties, legal fee, renovation, etc.
Variable costs are housing mortgage,
management fee, property tax, etc. On the
other hand, renting a place implies only the
monthly rental.
In Zillow Talk: The Rules of Real Estate, the
authors
Spencer
Rascoff
and
Stan
Humphries introduced a concept called the
buy-rent breakeven horizon the number
of years it would take to make buying
economically preferable to renting the same
home.

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The breakeven point will depend on where

you choose to stay and how long you are
planning to stay there.
Lets look at a real-life scenario. You are
renting a 958 sq ft 2-bedroom unit at
Amaryllis Ville at $4,200 per month. The
market price of the unit is now $1,470,000.
This is your first purchase and you can
borrow 80 percent (or $1,176,000) from the
bank.
Assume that both the management fee and
rent increase at an annual rate of 1.8 percent
(the average inflation rate in Singapore for the
last 25 years). As interest rates and property
taxes fluctuate depending on the market
situation, for this example lets assume some
reasonable figures for the ease of calculation.

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SINGAPORE PROPERTY WEEKLY Issue 289

As you can see from the table, even if we are
comparing only the total variable costs with
the total rent, the buy-rent breakeven horizon
falls between the 23rd and 24th year. In other
words, it will take 24 years to make buying
more economical compared with renting the
same place.

Even after 30 years, the total fixed and

variable costs of owning the 2-bedroom unit
($2.3 million for a Singaporean) is still higher
than renting it for 30 years ($1.98 million).
Of course, compared with renting, you own
the place after you pay back the bank. But
there is also the opportunity cost of the huge
initial investment you put in to buy your home.
Not to mention paying $482,067 in total
interest to the bank over 30 years.

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SINGAPORE PROPERTY WEEKLY Issue 289

Property prices and rents can go up and
down over the years. The question should
be when you should buy and when you
should rent. After all, the key to win the
property game is to buy at the right time
and the right price.
Why home purchase cant be a rational
decision?
For emotional matters like a relationship or
marriage, you dont do cost-benefit or
breakeven analyses. You listen to your heart
and make decisions based on what feels
right. The same applies to buying a home.
It is part of the Asian culture to associate
getting married with settling down and buying
your own place. You need the feeling of home

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or sense of belonging. Nothing beats coming

back to the same place that is renovated to
your own taste. One day when you retire, you
can go back to a place that is fully paid for.
Singapore is a property-obsessed nation. The
Singapore dream is to upgrade and stay in a
condominium. As Rascoff and Humphries
pointed out in the book: The upshot is that
our homes are now much more than the
places where we lay our heads at night. And
they arent just where the heart is anymore,
either. Homes are the object of our hearts
desire.
You may be very sure that you wont be
wasting money to rent no matter what. But
wait.

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SINGAPORE PROPERTY WEEKLY Issue 289

There is one last thing that Rascoff and
Humphries highlighted in their book that might
change your mind: A US survey showed that
tenants have higher weekly sexual activity
compared with owners across all age groups
until they reach the age of 60. No?

By guest contributor Property Soul, a

successful property investor, blogger, and
author of the No B.S. Guide to Property
Investment.
Back to Contents

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SINGAPORE PROPERTY WEEKLY Issue 289

Non-Landed Residential Resale Property Transactions for the Week of Nov 21 Nov 25
Postal
Project Name
District
1 EMERALD GARDEN
2 ALTEZ
3 HARVEST MANSIONS
4 MARINA COLLECTION
4 CARIBBEAN AT KEPPEL BAY
5 HERITAGE VIEW
9 OUE TWIN PEAKS
9 OUE TWIN PEAKS
9 THE RITZ-CARLTON RESIDENCES SINGAPORE CAIRNHILL
9 OUE TWIN PEAKS
9 LA CRYSTAL
10 TOMLINSON HEIGHTS
10 PARVIS
10 LATITUDE
10 GALLOP GABLES
10 PINEWOOD GARDENS
10 SIGNATURE AT LEWIS
10 SPANISH VILLAGE
10 CITY TOWERS
11 SOLEIL @ SINARAN
11 STRATA
12 THE ARTE
12 SHAW PLAZA - TWIN HEIGHTS
12 RAJAH TOWERS
14 MORO MANSIONS
15 THE BELVEDERE

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Area
(sqft)
969
549
947
2,788
1,281
1,206
1,055
549
3,057
1,604
1,076
2,551
990
1,324
2,852
2,056
980
1,163
1,701
506
506
1,528
1,421
2,207
936
1,302

Transacted
Price ($)
1,460,000
1,100,000
950,000
5,000,000
1,820,000
1,270,000
2,859,100
1,464,000
8,000,000
4,126,300
1,585,000
7,653,000
1,950,000
2,300,000
4,300,000
2,980,000
1,410,000
1,590,000
1,950,000
950,000
850,000
1,890,000
1,420,000
1,900,000
850,000
2,080,000

Price
Tenure
($ psf)
1,507 999
2,004 99
1,003 99
1,793 99
1,421 99
1,053 99
2,710 99
2,667 99
2,617 FH
2,573 99
1,473 FH
3,000 FH
1,969 FH
1,737 FH
1,507 FH
1,449 FH
1,439 FH
1,368 FH
1,147 FH
1,878 99
1,680 FH
1,237 FH
999 FH
861 FH
908 FH
1,597 FH

Postal
Project Name
District
15 THE SEAFRONT ON MEYER
15 THE SEAFRONT ON MEYER
15 CAMELOT BY-THE-WATER
16 COSTA DEL SOL
16 BAYSHORE PARK
16 CASAFINA
18 SAVANNAH CONDOPARK
18 MELVILLE PARK
19 THE SCALA
19 THE YARDLEY
19 RIVERSAILS
19 CENTRAL VIEW
20 GOLDENHILL PARK CONDOMINIUM
20 GRANDEUR 8
21 GARDENVISTA
21 PARC PALAIS
21 PANDAN VALLEY
22 CASPIAN
22 PARK VIEW MANSION
23 PALM GARDENS
26 CASTLE GREEN
28 SELETAR PARK RESIDENCE
28 SUNRISE GARDENS

Area
(sqft)
2,314
1,066
2,637
1,313
936
1,313
1,755
1,464
829
1,302
883
980
936
1,227
1,173
1,238
2,024
1,432
1,335
1,216
1,152
840
1,690

Transacted
Price ($)
3,580,000
1,600,000
3,830,000
1,570,000
810,000
1,100,000
1,180,000
935,000
1,130,000
1,450,000
910,000
865,000
1,235,000
1,285,000
1,400,000
1,165,000
1,755,000
1,500,000
770,000
850,000
965,000
1,050,000
1,200,000

Price
Tenure
($ psf)
1,547 FH
1,501 FH
1,452 99
1,196 99
865 99
838 99
673 99
639 99
1,363 99
1,113 FH
1,031 99
883 99
1,319 FH
1,047 99
1,193 99
941 FH
867 FH
1,048 99
577 99
699 99
838 99
1,251 99
710 99

NOTE: This data only covers non-landed residential resale property

transactions with caveats lodged with the Singapore Land Authority.
Typically, caveats are lodged at least 2-3 weeks after a purchaser
signs an OTP, hence the lagged nature of the data.
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