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You must also adjust for all costs, including taxes. Unlike SGX-listed stocks, private real estate holdings in Singapore are subject to stamp duties (real estate transfer taxes) and property taxes (a form of wealth tax). Rental income is subject to personal income tax.
Real estate is also subject to tenanting expenses, maintenance, and insurance costs. Even if you are managing the property, your time is worth something and should be costed in some reasonable way.
For SGX-listed stocks, you would have some small broker commissions (including exchange and GST charges) and perhaps an annual management charge (as on a STI ETF). There aren't really any compositional issues since you'd just buy a STI ETF, typically, and let the manager (the keeper of the index) worry about that. Dividends and capital gains are tax free in Singapore.
Do all that math, to calculate total returns net of all costs, and you'll most likely find that real estate investing was reasonably attractive for the first half of Singapore's national history, but SGX-listed stocks have handily outperformed real estate in Singapore's second half and to date.
In my view it's quite reasonable to acquire one owner-occupied housing unit, especially if the government is helping (HDB), and to invest in a low cost global stock index fund. "Some of both."
Bear in mind that stocks, especially in Singapore, have ample real estate exposure already. If you buy the STI (and/or a global stock index fund), you're buying part of CapitaLand, for example. That's real estate, of course. When you think about it (and it doesn't require much thought), the STI is basically the real estate market, the financing and insuring of that real estate market (banks, insurance companies), and the telecommunications for those homes and businesses (Singtel, StarHub). Singapore's stock market is really quite limited in many ways, and you need not worry that you lack exposure to real estate with a STI index fund. Oh boy, do you have real estate exposure in that.
Real estate is also subject to tenanting expenses, maintenance, and insurance costs. Even if you are managing the property, your time is worth something and should be costed in some reasonable way.
For SGX-listed stocks, you would have some small broker commissions (including exchange and GST charges) and perhaps an annual management charge (as on a STI ETF). There aren't really any compositional issues since you'd just buy a STI ETF, typically, and let the manager (the keeper of the index) worry about that. Dividends and capital gains are tax free in Singapore.
Do all that math, to calculate total returns net of all costs, and you'll most likely find that real estate investing was reasonably attractive for the first half of Singapore's national history, but SGX-listed stocks have handily outperformed real estate in Singapore's second half and to date.
In my view it's quite reasonable to acquire one owner-occupied housing unit, especially if the government is helping (HDB), and to invest in a low cost global stock index fund. "Some of both."
Bear in mind that stocks, especially in Singapore, have ample real estate exposure already. If you buy the STI (and/or a global stock index fund), you're buying part of CapitaLand, for example. That's real estate, of course. When you think about it (and it doesn't require much thought), the STI is basically the real estate market, the financing and insuring of that real estate market (banks, insurance companies), and the telecommunications for those homes and businesses (Singtel, StarHub). Singapore's stock market is really quite limited in many ways, and you need not worry that you lack exposure to real estate with a STI index fund. Oh boy, do you have real estate exposure in that.
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