Unless you are a JPM trader like Daimon or have a crystal ball, you will be better off buying a house rather than renting one... why put yourself at the mercy of rental hike and paying a whole lifetime of rental when the rental paid can actually get you your own house? All the talks about opportunity cost.... machiam like you sure win & huat big time like that.
http://www.theedgeproperty.com.sg/content/one-six-bto-flats-monetised-after-mop
Cashing out of Punggol and Sengkang
The findings are somewhat expected, as Punggol and Sengkang residents might wish to cash out their properties before other BTO projects hit the market upon fulfilling their MOPs.
Currently, Punggol and Sengkang BTO flats also command the highest profit margins. Over the past five years, four-room BTO flats in Punggol and Sengkang have been
yielding an average profit margin of 186% and 164% respectively.
In absolute quantum, they amounted to $320,000 in Punggol and $310,000 in Sengkang. The average profit in each town was computed based on the actual prices of the BTO flats when they were first launched and their resale prices upon MOP.
These gains are expected to shrink when more supply enters the market from subsequent BTO projects. Prices of four-room BTO flats between 2008 and 2013 have jumped 26% to 78% in Sengkang compared with those offered between 2003 and 2005. In Punggol, prices have surged 65% to 96% over the same time period.
Profits aside, residents in non-mature towns might also aspire to upgrade to mature towns or central locations where many popular schools are located, especially as their financial status improves over the years.
The proportion of BTO flats rented out shortly after fulfilling their MOP is relatively small compared with the disposal rate even in mature towns. This sounds counterintuitive, as BTO flats can command an
attractive rental yield of 10%. HDB upgraders could use the rental income to offset their condo mortgage.
It seems that HDB upgraders prefer to dispose of their flats and use the proceeds to purchase a private property. Some upgraders may even split the proceeds as upfront payments for two private properties.
The Secret is not to buy house or car. Put the money into your investment. Rent or stay with parents. Then money will compound. A house is a liability.
When you buy a house, you will need pay up minimum 20% down payment and the rest through bank loan. Lets say, you brought a house for 400k which means you will need to pay 100k in cash assuming not using CPF.
100k you can invest in stocks, bonds etc.
Yes, might seem that if rental 2k per month vs 2k mortgage you would want to buy a house but the main difference here is the lump sum that has already been paid up.
TLDR: Opportunity cost.
