#398: Monopoly Singapore
This post is not about the famous boardgame but general concepts apply.
In land-scare Singapore, its amazing how Property has become one of the main sources of generating a huge amount of money over time. Sadly, this is a game that is played by the rich ones where the poorer part of the nation continues in the day-to-day earnings as an employee..
Way back in early 2006, wifey and i had confirmed our HDB flat at 217,000. That's quite alot of money for a 16th floor, 4-room, 93sqm HDB flat located in Punggol, a relatively "ulu" and facilities-lacking location back then..
Fast forward to 2010 and here we are, done with renovations and house-cleaning and having spent a little over a month in the new house, we have somewhat adjusted to this new life in our new home. What has changed though, is that the 217,000 house we paid for is worth some 280,000 now. Just for calculation sake, the jump of $60,000 over 4 years is about $15,000 increase yearly. 5 years down(HDB rules states new flats can only be sold after 5 years occupancy), this figure is bound to increase and a sale, if any, of my flat will probably give me a return in the return of $100,000. Not. Bad. At. All.
Changing scenarios, the very same model applies to buyers of private properties. Condominums, Penthouses, you name it. Proceeds from sale alone is not the only source of income, instead, something quite more powerful is the rental market. A good condo conveniently located can rake in some $4,000 a month.. that's more money than i and a large part of Singaporeans earn on a monthly basis!
This brings us to the question as to who can afford to buy a condo and rent it out: The Rich. As the rich get richers buy renting out $4,000/month condos.. the monthly generated helps to fund other investments to ready for the next property buy.
On another end of the spectrum, friends who are getting hitched are searching for a place to call home. Resale flats offers good locations and matured facilities while renovation cost and cash downpayment tips the balance. New flats are hard to come by and BTO flats results in homelessness for 3-4 years.
"Build more houses (Buy in SG's context) and collect rent. This is the way to win Monopoly."
In land-scare Singapore, its amazing how Property has become one of the main sources of generating a huge amount of money over time. Sadly, this is a game that is played by the rich ones where the poorer part of the nation continues in the day-to-day earnings as an employee..
Way back in early 2006, wifey and i had confirmed our HDB flat at 217,000. That's quite alot of money for a 16th floor, 4-room, 93sqm HDB flat located in Punggol, a relatively "ulu" and facilities-lacking location back then..
Fast forward to 2010 and here we are, done with renovations and house-cleaning and having spent a little over a month in the new house, we have somewhat adjusted to this new life in our new home. What has changed though, is that the 217,000 house we paid for is worth some 280,000 now. Just for calculation sake, the jump of $60,000 over 4 years is about $15,000 increase yearly. 5 years down(HDB rules states new flats can only be sold after 5 years occupancy), this figure is bound to increase and a sale, if any, of my flat will probably give me a return in the return of $100,000. Not. Bad. At. All.
Changing scenarios, the very same model applies to buyers of private properties. Condominums, Penthouses, you name it. Proceeds from sale alone is not the only source of income, instead, something quite more powerful is the rental market. A good condo conveniently located can rake in some $4,000 a month.. that's more money than i and a large part of Singaporeans earn on a monthly basis!
This brings us to the question as to who can afford to buy a condo and rent it out: The Rich. As the rich get richers buy renting out $4,000/month condos.. the monthly generated helps to fund other investments to ready for the next property buy.
On another end of the spectrum, friends who are getting hitched are searching for a place to call home. Resale flats offers good locations and matured facilities while renovation cost and cash downpayment tips the balance. New flats are hard to come by and BTO flats results in homelessness for 3-4 years.
"Build more houses (Buy in SG's context) and collect rent. This is the way to win Monopoly."
posted by klayhead at 11:30 am
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