How much savings do you have?

[lazyplane]

I am not too keen at overseas investments at this stage of my life. I dont like the FX impact to SGD and if you see the past 5 years, u really need to get above nominal 3~5% returns just to break even. And i dont need the overseas diversification because it is not like i am huge funds to manage over eg $100 m . But thats my view ok.

Bonds in SG are pathetic. you can refer SGS for latest gov bond prices.
Corporate bonds, well, guess u know that u take the credit risk etc. So if u think they are ok, then go for it. Unfortunately, last time i check, i think there is a MAS cap that prevents individual from investing unless u r deemed "sophisticated" investor and able to shell out around S$250k.

Some good ones will come, but i think that at this preset moment, it is not that good.

Originally Posted by Unregistered

Hi Lazyplane,

Many thanks for your advise I really appreciated it. I have been pondering over what you mention over the weekend, and explain to my wife (she is less savvy) and with some friends. At this stage, I think I will continue to look at investing in stock for passive income, as I am mainly investing in SGX I plan to also look at oversea stock investment (if you have any advise to kickstart a newbie like me it will be great), and also looking at bonds (to balance the risk and exposure in stock only) and wait for opportunity for a second property when timing is right and saving is sufficient (maybe after the ABSD is lifted).

Thanks again, and really appreciate it.

Regards
Cluess daddy.

Single,Early 50s Male
Cash:35k
Investments:1.34m
Total income PA:120k
7 yo porsche 911 fully paid
living with parents in 4 room condo worth 2.2m, 1.8m loan left.

Late 30s, female locum GP
Cash: $50k
Stocks : $40k
Cpf OA and SA: $160k
SRS $20k
1 terrace in Sg bought 1.1 mil, now valued at 1.8 to 2 mil , loan 567k left
1 bedder condo bought $ 636801, loan $380k, due to TOP, hope to rent out , converted to 2 bedder, very near mrt
1 JB semi d, $380k, full equity loan

Hope to semi retire in JB soon and pay off Sg props as much as possible with hubby to get as much rental passive income as possible. Terrace may sell in future if need to send kids overseas for uni...

1. Sell your landed and pay off loan. Prices falling anyway. Say you sell at $1.7m, you get back $1.1m after paying loan.
2. Pay off your 1 bedder loan and your jb house loan. Total $760k. You are left with $373k and invest in good blue chips.
3. Get passive income from 1 bedder ($2k pm) and blue chips. If you get $4k pm and convert to RM and get RM10k, should be ok. When you are 65, you get $2400 pm extra (you and hubby's min sum). And your sons can give you $1k each every month.

What do you think?

Originally Posted by Unregistered

Late 30s, female locum GP
Cash: $50k
Stocks : $40k
Cpf OA and SA: $160k
SRS $20k
1 terrace in Sg bought 1.1 mil, now valued at 1.8 to 2 mil , loan 567k left
1 bedder condo bought $ 636801, loan $380k, due to TOP, hope to rent out , converted to 2 bedder, very near mrt
1 JB semi d, $380k, full equity loan

Hope to semi retire in JB soon and pay off Sg props as much as possible with hubby to get as much rental passive income as possible. Terrace may sell in future if need to send kids overseas for uni...

Originally Posted by Unregistered

1. Sell your landed and pay off loan. Prices falling anyway. Say you sell at $1.7m, you get back $1.1m after paying loan.
2. Pay off your 1 bedder loan and your jb house loan. Total $760k. You are left with $373k and invest in good blue chips.
3. Get passive income from 1 bedder ($2k pm) and blue chips. If you get $4k pm and convert to RM and get RM10k, should be ok. When you are 65, you get $2400 pm extra (you and hubby's min sum). And your sons can give you $1k each every month.

What do you think?

Yes, tempted to retire now by selling off landed...have put it up for sale and had an offer of 1.8 mil but hubby rejected....still having viewers interested...

But we also hope to finance our sons' overseas university if necessary in future and we can only do that by selling our terrace in future as it will likely appreciate by then....

Will see how, if we get a good offer, we might sell....

Originally Posted by Unregistered

Yes, tempted to retire now by selling off landed...have put it up for sale and had an offer of 1.8 mil but hubby rejected....still having viewers interested...

But we also hope to finance our sons' overseas university if necessary in future and we can only do that by selling our terrace in future as it will likely appreciate by then....

Will see how, if we get a good offer, we might sell....

Home prices may drop 20% by 2016: report

Sep 10, 2014

Home prices in Singapore could fall by 20 percent between 2014 and 2016 as economic restructuring, tighter population policies and property measures continue to weigh on the real estate market, according to a Bank of America Merrill Lynch (BOAML) report in the media.

“We believe the fate of the market will depend very much on the direction of policy, particularly on restructuring, immigration and foreign workers, as well as the timing of the relaxation of strict property measures,” wrote economist Chua Hak Bin in the report.

He noted overly tight population policies will limit the number of a younger foreign workforce, and affect property prices. Maintaining the cooling measures would also “imply a greater negative impact from rising mortgage rates and persistence of housing distortions”.

On the restructuring front, Chua believes Singapore’s move to a productivity-driven growth model, which is a long-term process, has produced mixed results. Notably, it has reduced the growth of Gross Domestic Product (GDP), while employment growth and total job creation is expected to moderate this year.

“We do not see the government reversing course, but a pause may be in order…as companies, particularly SMEs, are having trouble adjusting to the speed of the tightening,” said Chua.

Any potential relaxation of property cooling measures is likely to happen only in H2 2015, as cyclical property measures such as stamp duties and loan-to-value limits may be relaxed when US interest rates and Singapore mortgage rates start rising.

Though prices may drop in the short term, they will still rise in the long term esp with 6.9mil population coming...

Originally Posted by Unregistered

Though prices may drop in the short term, they will still rise in the long term esp with 6.9mil population coming...

The smart ones take advantage of property cycles.

Let's say you can sell your condo now for $2m and after 2 years if prices fall by 25%, this means prices have fallen by $500k.

So if you sell your condo now and rent for two years (rent a cheap one bedroom unit for two years at $2k per month or $48k for 2 years - you can find many of such condos in Woodlands), then you buy back a similar condo you own previously for $1.5m, this means you would have profited $450k. After transaction costs, maybe your net profit would be $400k. This is a lot of money for many Singaporeans.

If a property is worth $1.8m now, a fall by 25% means a loss in value of $450k.

Landed property prices have also gone up too much over the past few years and likely to fall hardest.

Luxury condo owners cutting their losses.


More luxury condo units sold at loss as resale market ebbs

Tuesday, Sep 16, 2014

Lee Meixian
The Business Times

SINGAPORE - A larger percentage of high-end luxury condo homes on the resale market are being sold at a loss and a smaller percentage at a profit, as the tide of the once-rosy property market recedes and reveals those who have been "swimming naked" - that is, those without adequate holding power for their extravagant purchases.

According to data compiled by STProperty.sg from URA Realis, 7 per cent of transacted units in the prime districts 9, 10 and 11 sold at a loss in the first eight months of this year, up from 5.5 per cent over the same year-ago period.

Fewer people are profiting from their resales too: only 62.2 per cent enjoyed any capital gains - a steep drop from 83.5 per cent a year ago. And 4.5 per cent sold without making a profit or a loss (versus 0.4 per cent a year ago).

Yields are also under pressure. The low-rental environment is leaving more owners struggling to repay their mortgages. Assuming a $1.6 million loan (equivalent to an 80 per cent loan limit for a $2 million property) is taken out at an annual 1.5 per cent interest rate over a 30-year tenure, this would amount to a monthly mortgage of $5,500. Rentals would therefore have to be in excess of this to cover mortgage payments.

"In some cases, the monthly rental cannot cover the mortgage. Take a $5 million Sentosa Cove condo: It would take a monthly rent of $13,800 to cover your loan," said Christine Li, head of research and consultancy at OrangeTee.

"That said, it's quite common that rents cannot cover monthly instalments, especially for bigger units. But those who don't have holding power would have to let go of their units. Others may be forced to do mortgagee sales," she added.

But not all the sellers who were willing to stomach losses were overleveraged. Some could simply want to exit the market because they don't see the cooling measures ending any time soon (meaning, they expect that price recovery is still far off), or just as a way of rebalancing their overall portfolio.

Lee Lay Keng, DTZ's South-east Asia regional head of research, said: "A large proportion of purchases in the prime districts are by foreigners; perhaps they are just pulling out of Singapore. But the fall in demand for private homes makes it harder for sellers to find buyers.

"So if they really need to sell, they will have to lower their prices significantly."

RST Research director Ong Kah Seng said that investors would also have bought into high-end properties in major cities in the United States, Europe and Australia, where there have been exciting properties launched in recent years.

In all likelihood, despite pulling out of Singapore, they might have profited elsewhere, as other countries saw an uptick in residential property prices after the global financial crisis.

Meanwhile, loan curbs and price cutting by developers at new condo launches also continue to sap strength from the resale market.

Condo homes in the prime districts 9 (Orchard Road, River Valley), 10 (Bukit Timah, Holland, Balmoral) and 11 (Novena, Newton, Thomson) have traditionally been purchased as investment homes for capital gains and rental yields.

Buyers bank on demand from expatriate lessees, most of whom enjoy staying near the city. But with corporate housing budgets having shrunk post-financial crisis, these foreign employees are moving instead to the city fringes and suburbs, with some even renting Housing Board flats.

Losses made in resale transactions from January to last month this year range from $9,300 for a unit at The Hillier in Bukit Timah, to $2.06 million for a unit at St Regis Residences in Tanglin. The latter was purchased at $6.8 million in 2007 and sold for $4.7 million in April.

Mine is a freehold landed terrace not a condo....freehold landed supply is very limited now unlike condos sprouting up everywhere, so unlikely to drop in value as much as condos in the longterm...