How much are you earning per annum?

My wife and I planning to retire in Penang. We need RM6k pm to retire

Rental (brand new 3 room condo) RM1k pm
Food RM2k pm
Holidays RM2k pm
Misc RM1k pm

Total RM6k pm

RM6,000 pm = S$2,222 pm.

You should not have any problem getting this amount of passive income. If your 4 room HDB flat is paid up, you can rent it out for at least S$2,500. Enjoy retiring in a condo!

Interesting to note that it is so cheap to rent a condo in Malaysia as they have a massive oversupply of condos, especially in Johor. If you go to Propertyguru Malaysia, you can find so many condos for sale and rent. There are many empty condos there. It is better to rent the condos than to buy. The resale market there is very, very tough due to the oversupply.

Originally Posted by Unregistered

My wife and I planning to retire in Penang. We need RM6k pm to retire

Rental (brand new 3 room condo) RM1k pm
Food RM2k pm
Holidays RM2k pm
Misc RM1k pm

Total RM6k pm

Originally Posted by Unregistered

My wife and I planning to retire in Penang. We need RM6k pm to retire

Rental (brand new 3 room condo) RM1k pm
Food RM2k pm
Holidays RM2k pm
Misc RM1k pm

Total RM6k pm

Why Penang? Not boring meh?

Time of the month again.... How much would COE continue to rise this bidding exercise?

Exciting to see. Huat ah!!

Originally Posted by Unregistered

Why Penang? Not boring meh?

Why Penang? I love the nice beaches, food is cheap, condo rent is very cheap, crime is much lower than KL & Johor (Johor is worst), relaxed pace of life suitable for retirees. From Penang, I can easily fly to neighboring countries for holidays.

The Dynamics of the COE market in Singapore

Demand for new cars and COEs = fn (replacement demand, household income, stock market, property market, unemployment rate, job security, political and social stability, good government, economic growth, population, consumer preference and attitudes, expectation of future prices)

Supply of COEs and new cars = fn (replacement COE (determined by car deregistrations) + 0.25% annual growth rate)

Price of COEs is therefore determined by BOTH demand and supply functions (fn) and NOT just supply.

We have seen recently why even though the supply of COEs released into the market has increased, prices of COEs did not fall much and in fact continue its rising trend. This is not strange or unbelievable. Many commentators, who may not be trained in the Economics sciences, just look at the supply of COEs to wrongly conclude that prices of COEs will fall.

The fact that COE prices continue to remain firm and continue rising concludes that DEMAND is STRONG, VERY STRONG. It shows that people who scrapped their old cars will buy new cars. This REPLACEMENT DEMAND takes up the REPLACEMENT COE SUPPLY. The fact that COE prices rise means that ADDITIONAL DEMAND for new cars and COEs is FAR GREATER than the 0.25% annual growth of COEs.

What determines the strong REPLACEMENT DEMAND and ADDITIONAL DEMAND for new cars and COEs?

There are many factors and these are listed in the demand function above.

1. Household income – A rising household income in Singapore means that households can afford to own cars. Household incomes have generally increased over the past 10 years. It is common today for households with working couples to earn a combined $100,000 per annum. With such income, owning a $100,000 brand new car is not difficult as this means they are only spending $10,000 per year to own a car. This is only 10% of their income. If they spend another $10,000 per year on road tax, ERP charges, insurance, parking, maintenance and petrol, this is another 10% of income. Therefore the total cost for owning and using their car is only 20% of income. Compare this with taking the taxi. If each person spends $40 per day (go to work and back including booking fees), the couple would have to spend $19,200 per year. So, the opportunity cost of owning a car versus taking the taxi is small. On top of that, they will benefit from convenience and time savings. Private car ownership and usage is affordable, relative to today’s household income and taxi expenses.

2. Stock market and property market – When the stock market and property market do well, households can monetise their gains and use proceeds of their gains to buy new cars. Many people flip their properties, especially those who bought highly subsidised BTO flats, to earn big profits and hence enabling them to buy new cars. Eligible Singaporean households can buy cheap BTO flats TWICE. So lucky.

3. Low unemployment rate, job security, political and social stability, good government and healthy economic growth – These factors have given Singapore consumers the confidence to buy new cars.

4. Population – Higher population will translate to higher demand for new cars.

5. Consumer preference and attitude – New cars are generally seen as luxury goods for most people. Many people aspire to own cars, in particular new cars. Families with new cars gain respect from neighbours and family members. To be able to own a new car is a manifestation of success and social status. This has always been the case and will always be. More families are also buying two or more cars per household, given their needs. For instance, a professional couple may own two cars as each of them earn a high salary and they may need to move around in their respective jobs.

6. Expectation of future prices – In the immediate term, the expectation of a rise in car prices due to changes in the CEV scheme will drive many people at the sidelines to head to the showrooms to book their new cars now rather than in July 2015. In the longer term, there is also the expectation that COE prices will rise significantly in 2019 onwards due to the expected drought of COEs by then. Hence, those who want to avoid paying for $100, 000 Cat A COEs will change to new cars NOW rather than in 2019 to avoid the scenario.

I hope this brief economic analysis helps those with little or no Economics knowledge in understanding how COE prices are determined. In summary, COE prices are determined by BOTH demand and supply and NOT just supply. Hence, COE prices will likely continue to remain firm and continue rising, assuming no major global economic shocks in the foreseeable future.

Originally Posted by Unregistered

Time of the month again.... How much would COE continue to rise this bidding exercise?

Exciting to see. Huat ah!!

Originally Posted by Unregistered

Time of the month again.... How much would COE continue to rise this bidding exercise?

Exciting to see. Huat ah!!

Car dealer's PMS period is here again.

PMS makes car dealers go crazy and that's why world wide, car dealers rank as the most unethical profession beating politicians and journalists.

You can google "unethical car dealers" and read up on ethics surveys...

Originally Posted by Unregistered

Car dealer's PMS period is here again.

PMS makes car dealers go crazy and that's why world wide, car dealers rank as the most unethical profession beating politicians and journalists.

You can google "unethical car dealers" and read up on ethics surveys...

Hmm... Seems like a PMS poster than anything else, every trade has black sheeps that's life. Don't degrade others while you actually degraded yourself

Originally Posted by Unregistered

Time of the month again.... How much would COE continue to rise this bidding exercise?

Exciting to see. Huat ah!!

Mr car salesman you are back! So good to hear from you again. I missed you so much. You never fail me to get me excited, hard and wet. Please share more juicy news and analysis on COE.

HUAT HUAT HUAT!

Originally Posted by Unregistered

Hmm... Seems like a PMS poster than anything else, every trade has black sheeps that's life. Don't degrade others while you actually degraded yourself

You are right. Every profession will have some black and and some white sheep.

BUT have you ever wondered why some professions have a HIGHER percentage of black sheep than others?

Check out Gallup's ethics survey at the link below....

://.gallup.com/poll/1654/honesty-ethics-professions.aspx