WEBVTT - BTO or No: Busting your budget on that first home | EP 3

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<v Speaker 1>this is a C. N. A.

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<v Speaker 2>Podcast.

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<v Speaker 1>We'll go for some quick fire questions in a few words.

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<v Speaker 1>Can you give us your thoughts on the following first

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<v Speaker 1>would be your dream home, my

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<v Speaker 2>dream home, just a simple bungalow,

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<v Speaker 2>which actually I already

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<v Speaker 1>stayed

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<v Speaker 1>buying or renting,

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<v Speaker 2>buying for sure

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<v Speaker 1>BTO or resale flat

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<v Speaker 2>resale flat

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<v Speaker 1>private property or HD be

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<v Speaker 2>private property,

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<v Speaker 1>bank loan or hDB loan.

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<v Speaker 2>Mm hmm. Maybe now. HtV

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<v Speaker 1>low.

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<v Speaker 1>Mhm.

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<v Speaker 1>All of us reach a stage in our lives when

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<v Speaker 1>we want to buy a home but this is not

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<v Speaker 1>just any purchase, it's the biggest of the big ticket

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<v Speaker 1>items will buy in our lives. A typical property mortgage

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<v Speaker 1>in Singapore can set us back by half a million dollars.

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<v Speaker 1>So how does this impact a young couple's financial journey

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<v Speaker 1>and his property a sure bet for the long run

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<v Speaker 1>to answer these questions is a man known to many,

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<v Speaker 1>he is the ceo of Singapore real estate agency prop

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<v Speaker 1>Nick's Ismael Gaffer has witnessed the twists and turns of

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<v Speaker 1>the Singapore property market and together with it, he has

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<v Speaker 1>made his own fortune. So thanks so much for joining

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<v Speaker 1>us today is mild

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<v Speaker 1>now no one can deny that home prices in Singapore

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<v Speaker 1>are not cheap. So could you explain to us why

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<v Speaker 1>it is so and do property prices only go up

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<v Speaker 1>from here.

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<v Speaker 2>Generally speaking, property prices tend to go up, but it

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<v Speaker 2>would be a myth to say it will only go up.

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<v Speaker 2>But if you take it from a very long time

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<v Speaker 2>horizon property prices have to keep going up. The logic

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<v Speaker 2>is very simple, say 20 years ago or 10 years

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<v Speaker 2>ago or for that matter 50 years ago, the salary

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<v Speaker 2>of an architect and engineer is not the same. So

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<v Speaker 2>there's this element known as inflation. So does the cost

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<v Speaker 2>of materials

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<v Speaker 2>goes up

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<v Speaker 2>and in the land scarce Singapore, everything become tight and

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<v Speaker 2>therefore in general to say over a longer period of time,

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<v Speaker 2>property prices will go up is the right way to

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<v Speaker 2>look at it. However, within that longer time horizon

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<v Speaker 2>there will be cycles due to uncertainties. Either it could

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<v Speaker 2>be SARS or it could be some kind of financial

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<v Speaker 2>crisis or for that matter even the very recent covid.

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<v Speaker 2>But I must say even during the covid period our

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<v Speaker 2>real estate market was relatively resilient.

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<v Speaker 1>Some younger people start with a less expensive home first

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<v Speaker 1>and maybe

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<v Speaker 1>pick a non mature estate for example with a few

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<v Speaker 1>rooms and then upgrade as needs change.

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<v Speaker 1>Maybe when you have a child until you start upgrading

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<v Speaker 1>your property. But buying and selling your home is not

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<v Speaker 1>very straightforward. So some younger people start buying a four

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<v Speaker 1>or five room flat, maybe consider a convenient location. So

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<v Speaker 1>for those who are trying to get in this property market,

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<v Speaker 1>get a home that they're going to live in. What

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<v Speaker 1>factors do you think they should consider?

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<v Speaker 2>I think it's very important when we are young sometimes

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<v Speaker 2>because I was young once too we

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<v Speaker 1>can to be

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<v Speaker 2>short term in our considerations.

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<v Speaker 2>Why do I say that for example if a young

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<v Speaker 2>couple who wants to buy a B. T. O. Flat

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<v Speaker 2>built to order flat and you know by today's norm

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<v Speaker 2>it could take anything between 4 to 5 years for

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<v Speaker 2>the constructions to complete

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<v Speaker 2>before you can get the keys and thereafter you have

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<v Speaker 2>another five years minimum occupation period

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<v Speaker 2>and only then after that you're able to sell. Therefore

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<v Speaker 2>there is almost a 9 to 10 years time like

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<v Speaker 2>before you can either downgrade upgrade or move forward. And

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<v Speaker 2>can you imagine you may be young now but in

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<v Speaker 2>10 years time a lot of things can change. Maybe

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<v Speaker 2>two Children you may have made

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<v Speaker 2>and maybe in 567 years down the road, maybe one

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<v Speaker 2>of your parents may be wanting to occupy together with you?

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<v Speaker 2>I'm not so sure. So if you did not put

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<v Speaker 2>any of such consideration and you just say okay I

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<v Speaker 2>just wanted the smallest place in the very right location.

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<v Speaker 2>Doesn't matter even if it costs me because I wanted

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<v Speaker 2>to be in so central and therefore you take a

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<v Speaker 2>three bedroom

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<v Speaker 2>And then you must be mindful the next 10 years

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<v Speaker 2>you are going to be there. So that's what I

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<v Speaker 2>would say here is it's okay to have a smaller

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<v Speaker 2>house but each an individual must have their own planning

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<v Speaker 2>in terms of the time horizon, what is the likely

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<v Speaker 2>family needs a personal needs before your deciding whether you

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<v Speaker 2>want a bigger flat or a small flat.

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<v Speaker 1>So a lot of things to consider not just the

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<v Speaker 1>price it seems,

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<v Speaker 1>but what about those who are not married because their

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<v Speaker 1>options are even more limited. What advice would you give?

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<v Speaker 2>Oh get married.

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<v Speaker 1>Yeah.

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<v Speaker 2>So I think in Singapore's system here is this procreation

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<v Speaker 2>of family something that is very much favored with a

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<v Speaker 2>lot more incentives. But we do respect singles. I think

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<v Speaker 2>with all due rights for their own lifestyle is perfectly okay.

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<v Speaker 2>But until they attain the age of 35 they don't

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<v Speaker 2>have much options because once you're in a single above

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<v Speaker 2>35 you may have got some options

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<v Speaker 2>in terms of buying resale flats or so I generally

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<v Speaker 2>think for the younger and as well as a single,

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<v Speaker 2>the ideal option will be still too

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<v Speaker 2>Take advantage of your parents home. So you don't need

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<v Speaker 2>to pay anything live as long as you're happy. But

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<v Speaker 2>the disadvantage is that sometimes the generation gap you want

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<v Speaker 2>wants privacy and you want to be bold, you want

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<v Speaker 2>to come back home at two am

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<v Speaker 2>and therefore yeah, then you don't have an alternative. The

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<v Speaker 2>other options are obviously

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<v Speaker 2>something becoming more popular. Now here is this co living

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<v Speaker 2>space where the younger generations can live together with a

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<v Speaker 2>communal kind of thing where you don't have a completely

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<v Speaker 2>huge house but there are common toilets, common kitchen and

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<v Speaker 2>you pay an affection of another usual rental of a

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<v Speaker 2>house and

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<v Speaker 2>that would be something nice if they are comfortable. It

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<v Speaker 2>all depends on the individual are the one who is

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<v Speaker 2>very comfortable with strangers to co leave. Obviously the other

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<v Speaker 2>thing here will be for you to just rent a

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<v Speaker 2>room and that gives you all your 100% privacy or

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<v Speaker 2>a smaller apartment like in a one bedroom.

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<v Speaker 2>But all this is going to cost money. So one

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<v Speaker 2>has to be really thoughtful about the fact that as

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<v Speaker 2>long as you are renting

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<v Speaker 2>there's an outflow of your savings or your cash and

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<v Speaker 2>you're basically making the landlord reacher and not yourself. The

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<v Speaker 2>ideal scenario will be for one to get your own house,

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<v Speaker 2>which means your monthly mortgage installment that you're paying is

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<v Speaker 2>something equivalent to your rent is paying towards your own

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<v Speaker 2>property Over time the property is fully paid up with

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<v Speaker 2>their capital appreciation. This would be the best option for

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<v Speaker 2>you to accumulate in terms of your retirement

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<v Speaker 1>Because rent definitely not cheap, especially nowadays. And another factor

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<v Speaker 1>that we need to keep in mind now is rising

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<v Speaker 1>interest rates because mortgage rates have roughly doubled in the

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<v Speaker 1>first six months of this year and that could mean

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<v Speaker 1>a lot more in interest payments. Over time. For example,

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<v Speaker 1>the median two year fixed rate mortgage rose from 1.15%

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<v Speaker 1>in December last year to 2.25% in May. So that's

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<v Speaker 1>a big jump only in six months. How should home

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<v Speaker 1>owners tackle this?

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<v Speaker 2>Just be happy about it. Not to worry because you

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<v Speaker 2>can't tackle something, it is market norms. But to start

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<v Speaker 2>with

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<v Speaker 2>singaporeans we all need to be very happy about it.

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<v Speaker 2>The fact that

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<v Speaker 2>the 1.2 below 1.5 are not a norm. There MS

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<v Speaker 2>enormous mainly because of the federal interest rates has been

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<v Speaker 2>really near zero due to crisis Covid. And they wanted

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<v Speaker 2>to just encourage more of the spending and so on.

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<v Speaker 2>But that also gives rise to other challenges in America

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<v Speaker 2>where inflation went up to 7 to 8% and that's

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<v Speaker 2>why they have decided to increase the interest rate and

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<v Speaker 2>therefore in my personal view, interest rates or mortgage anything

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<v Speaker 2>up to 3 to 3.5% is a norm. So when

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<v Speaker 2>we take a miss normal

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<v Speaker 2>percentages and then we feel, wow this is 2.5. So

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<v Speaker 2>I'm honestly not worried about that at all for the

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<v Speaker 2>fact that you see any one of us who wants

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<v Speaker 2>to take a loan

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<v Speaker 2>based on the MES guideline,

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<v Speaker 2>you will be assessed as if the mortgage amount given

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<v Speaker 2>to you at the current interest rate of 3.5%

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<v Speaker 2>even though the bank only charges 1.5 or two. Therefore

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<v Speaker 2>this is kind of safety measures

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<v Speaker 2>That you will not be given a loan at a

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<v Speaker 2>very low rate but it is assessed at 3.5. So

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<v Speaker 2>there's an a buffer been in built for prudence and

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<v Speaker 2>why 3.5? I think that is more like a normal rates.

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<v Speaker 2>Therefore the interest rate having gone from 1.25 to 2.25

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<v Speaker 2>and it's not going to stop here. In my view,

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<v Speaker 2>It may hit about three

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<v Speaker 2>and that normalized and I will not pay too much

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<v Speaker 2>attention to this. Honestly,

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<v Speaker 2>We're not talking about five, Then there would be a concern.

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<v Speaker 2>So with such rates, this should not deter any young

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<v Speaker 2>couple to look into it because sometimes we study a

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<v Speaker 2>lot of things and then we look at the headlines,

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<v Speaker 2>it has gone double and by not entering the market,

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<v Speaker 2>the prices that we will eventually end up paying will

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<v Speaker 2>be huge.

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<v Speaker 1>Yeah.

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<v Speaker 1>And it's not going to stop here. As you mentioned.

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<v Speaker 1>So you mentioned dismal that anything under 3% is considered okay.

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<v Speaker 1>We shouldn't be too worried about that. But in the

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<v Speaker 1>past decade and some as you mentioned, rates have been

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<v Speaker 1>so low that

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<v Speaker 1>so many people have turned to bank loans over HDB

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<v Speaker 1>loans because of the difference in in the rates now

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<v Speaker 1>that mortgage rates from the banks are creeping up. Do

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<v Speaker 1>you think it's time to consider HDB loans, especially for

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<v Speaker 1>those who are just about to buy their first property.

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<v Speaker 2>I definitely think yes, because HDB loans are more sheltered

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<v Speaker 2>because I think over the last umpteen, not 10, not 20,

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<v Speaker 2>not 30. Have not put my finger to really go back.

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<v Speaker 2>It has always been fixed at 2.6%. The formula works

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<v Speaker 2>is 0.1 above the ordinary account payment of 2.5. So

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<v Speaker 2>what HDB loan interest rate gives a person here is

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<v Speaker 2>the stability while a bank loan will be quite cyclical

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<v Speaker 2>demand and supply. You would be able to secure the

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<v Speaker 2>entry at below 2%.

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<v Speaker 2>When the rates start to go up, you may end

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<v Speaker 2>up paying more than 3%. Therefore, I think it's perfectly

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<v Speaker 2>okay right now where the interest rates are expected to

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<v Speaker 2>go back to the norms. HDB loan will be more

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<v Speaker 2>attractive for young couples.

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<v Speaker 1>Do you have a preference for floating or fixed rates

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<v Speaker 1>when it comes to bank loans? Because I'm sure a

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<v Speaker 1>lot of mortgage holders in the next few months will

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<v Speaker 1>look at their payments and go, well that's a lot more.

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<v Speaker 2>I think it's very individual. It all depends on the

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<v Speaker 2>risk appetite and how you read the market.

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<v Speaker 2>I've always been more favored towards floating because I think

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<v Speaker 2>I understand the market because I'm always looking at the

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<v Speaker 2>market but myself too. I've also taken fixed rates in

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<v Speaker 2>the past when I know the market is changing towards

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<v Speaker 2>the tide

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<v Speaker 2>where the interest rates are expected to go up then

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<v Speaker 2>by fixing your interest rate. You also

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<v Speaker 2>basically safeguard your commitments.

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<v Speaker 2>So what would one do here? Is it fixed or floating?

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<v Speaker 2>Especially right now. The difference between a floating and fix

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<v Speaker 2>could be almost close to 0.75 because most of the

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<v Speaker 2>banks are already pricing in the future cost. So that

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<v Speaker 2>being the case, I think to an extent floating is attractive,

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<v Speaker 2>but if you are going to be someone who just

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<v Speaker 2>want a peace of mind for next three years then

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<v Speaker 2>you can opt for fixed as well.

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<v Speaker 1>So amid this rising interest rates, if we take a

0:12:38.660 --> 0:12:42.740
<v Speaker 1>look at a broader picture here while some are trying

0:12:42.740 --> 0:12:45.459
<v Speaker 1>to gather enough for their first home, there's a growing

0:12:45.460 --> 0:12:47.850
<v Speaker 1>number of public housing millionaires,

0:12:48.140 --> 0:12:50.880
<v Speaker 1>how should we balance the need for a place to

0:12:50.880 --> 0:12:54.860
<v Speaker 1>live in and the investment opportunity from a home purchase.

0:12:55.540 --> 0:12:59.369
<v Speaker 2>One of the real good things about being Singaporean. And

0:12:59.370 --> 0:13:01.660
<v Speaker 2>I must say it is a commitment of the government

0:13:02.140 --> 0:13:06.329
<v Speaker 2>that every Singaporean will get the first home at a

0:13:06.330 --> 0:13:07.660
<v Speaker 2>very affordable price.

0:13:08.040 --> 0:13:10.650
<v Speaker 2>And I must say that that's a commitment, not just

0:13:10.650 --> 0:13:13.880
<v Speaker 2>by words, but it has been illustrated over the years

0:13:13.880 --> 0:13:17.910
<v Speaker 2>when the government keep increasing the grant, that one can

0:13:17.910 --> 0:13:18.750
<v Speaker 2>qualify

0:13:19.540 --> 0:13:23.350
<v Speaker 2>A couple, even buying a resale flat if the household

0:13:23.350 --> 0:13:27.550
<v Speaker 2>income is below $1,500, which is quite unusual unless they

0:13:27.550 --> 0:13:30.970
<v Speaker 2>are really not working and maybe cleaners. I'm really not

0:13:30.970 --> 0:13:33.760
<v Speaker 2>sure sure at the very lower income bracket,

0:13:34.340 --> 0:13:40.849
<v Speaker 2>The government is prepared to give $160,000 of grant

0:13:41.340 --> 0:13:45.040
<v Speaker 2>to assist them to buy the first property. And that's

0:13:45.040 --> 0:13:47.710
<v Speaker 2>why what I think is is buying a first property

0:13:47.710 --> 0:13:50.250
<v Speaker 2>in Singapore is never a major concern

0:13:50.740 --> 0:13:54.860
<v Speaker 2>Because you know, first and foremost the bto subsidized and

0:13:54.860 --> 0:13:57.780
<v Speaker 2>you also do qualify for some kind of underground depending

0:13:57.780 --> 0:14:00.840
<v Speaker 2>on your income bracket, not everybody gets 160 as your

0:14:00.850 --> 0:14:05.559
<v Speaker 2>household income goes on the upper scale, then the grant reduces.

0:14:05.570 --> 0:14:08.160
<v Speaker 2>So then what is the major concern?

0:14:08.540 --> 0:14:11.689
<v Speaker 2>The major concern here is not about at the entry

0:14:11.690 --> 0:14:17.700
<v Speaker 2>level is the aspiration of some of us, we want

0:14:17.710 --> 0:14:23.530
<v Speaker 2>bigger home, we want lifestyle, we want central location

0:14:23.540 --> 0:14:26.770
<v Speaker 1>closer to parents who are mature estates. That's

0:14:26.780 --> 0:14:29.380
<v Speaker 2>closer to parents, you still got additional ground because you're

0:14:29.380 --> 0:14:30.950
<v Speaker 2>staying closer towards the parents.

0:14:31.140 --> 0:14:34.500
<v Speaker 2>I mean obviously if my parents are staying in downtown

0:14:34.500 --> 0:14:37.070
<v Speaker 2>or for that matter in Queenstown, I would prefer to

0:14:37.070 --> 0:14:39.790
<v Speaker 2>buy a property because not only I can visit them,

0:14:39.790 --> 0:14:42.580
<v Speaker 2>but even when I have a child there's someone to

0:14:42.580 --> 0:14:43.860
<v Speaker 2>look after. But

0:14:44.240 --> 0:14:47.260
<v Speaker 2>then the question here will be, what about

0:14:47.640 --> 0:14:53.200
<v Speaker 2>affordability? For example, a four bedroom in the central location,

0:14:53.210 --> 0:14:54.660
<v Speaker 2>A B. T. O.

0:14:55.140 --> 0:14:59.470
<v Speaker 2>Can be anything between 600 over $1000 in a central location.

0:14:59.470 --> 0:15:04.240
<v Speaker 2>I'm talking about Queenstown blanca and so on versus a

0:15:04.250 --> 0:15:06.750
<v Speaker 2>four room at let's say yee shun

0:15:07.140 --> 0:15:11.770
<v Speaker 2>or the outlying area is 400 plus for 50 plus

0:15:11.770 --> 0:15:16.050
<v Speaker 2>minus on average. So one has to pay a premium

0:15:16.440 --> 0:15:18.960
<v Speaker 2>to buy a very central location.

0:15:19.340 --> 0:15:23.010
<v Speaker 2>But then if they cannot afford that premium to buy

0:15:23.010 --> 0:15:26.770
<v Speaker 2>a forum, some of them compromise to buy a smaller flat,

0:15:26.780 --> 0:15:30.740
<v Speaker 2>maybe a tree room in Queenstown, which will cost 400 over,

0:15:30.750 --> 0:15:31.660
<v Speaker 2>but you could have

0:15:32.040 --> 0:15:36.210
<v Speaker 2>Bought a four room elsewhere. So this is a compromise.

0:15:36.220 --> 0:15:38.090
<v Speaker 2>But as I said at the start, when we talked

0:15:38.090 --> 0:15:41.760
<v Speaker 2>about it, young couples have to really think about what

0:15:41.760 --> 0:15:44.510
<v Speaker 2>is it, they truly one and not only for now,

0:15:44.520 --> 0:15:47.530
<v Speaker 2>but for the next 10 years. Is it space more

0:15:47.530 --> 0:15:50.460
<v Speaker 2>important or is it locality more important?

0:15:50.640 --> 0:15:52.260
<v Speaker 2>Or is it lifestyle

0:15:52.840 --> 0:15:54.360
<v Speaker 2>like an executive condominium?

0:15:55.510 --> 0:15:58.260
<v Speaker 1>But what do you think about

0:15:58.840 --> 0:16:03.700
<v Speaker 1>people who are eyeing properties in certain locations with the

0:16:03.700 --> 0:16:05.820
<v Speaker 1>potential investment return in

0:16:05.820 --> 0:16:09.880
<v Speaker 2>mind. I totally can understand that and that's why, you know,

0:16:09.890 --> 0:16:13.560
<v Speaker 2>for all the video flats in the very central locations,

0:16:14.040 --> 0:16:19.800
<v Speaker 2>the subscription rates are much higher because it is human,

0:16:19.810 --> 0:16:23.460
<v Speaker 2>it's nothing wrong about people desiring to have a place

0:16:23.460 --> 0:16:27.310
<v Speaker 2>there because they achieve two things. One, the convenience of

0:16:27.310 --> 0:16:28.050
<v Speaker 2>the location

0:16:28.640 --> 0:16:31.830
<v Speaker 2>And in time to come. Such properties tend to sell,

0:16:31.830 --> 0:16:34.500
<v Speaker 2>as you said, $1 million dollar ticket. Why don't I

0:16:34.500 --> 0:16:37.760
<v Speaker 2>stay enjoy the convenience and yet

0:16:38.140 --> 0:16:43.320
<v Speaker 2>enjoy the better capital appreciation in comparison to the outlying areas.

0:16:43.330 --> 0:16:45.980
<v Speaker 2>So I think it's a good idea that a lot

0:16:45.980 --> 0:16:46.570
<v Speaker 2>of people

0:16:46.940 --> 0:16:48.110
<v Speaker 2>tend to go for this,

0:16:48.740 --> 0:16:52.420
<v Speaker 2>but they must also understand when the subscription rates are

0:16:52.420 --> 0:16:58.480
<v Speaker 2>so high, your chances of you getting one is very slim.

0:16:58.490 --> 0:17:02.650
<v Speaker 2>The government realized this after so long that there seems

0:17:02.650 --> 0:17:06.980
<v Speaker 2>to be like a lottery effect. People who bought pinnacle

0:17:06.980 --> 0:17:08.170
<v Speaker 2>some time back

0:17:08.240 --> 0:17:09.050
<v Speaker 2>and today

0:17:09.240 --> 0:17:12.430
<v Speaker 2>almost most units that goes well above a million dollars

0:17:12.430 --> 0:17:15.900
<v Speaker 2>and people do make an a sizable appreciation. That's why

0:17:15.900 --> 0:17:18.270
<v Speaker 2>now the government has come up with more restrictions in

0:17:18.270 --> 0:17:20.310
<v Speaker 2>the M. O. P. Is beyond five years to extend

0:17:20.310 --> 0:17:23.450
<v Speaker 2>to 10 years and restrictions and things like that so

0:17:23.450 --> 0:17:27.320
<v Speaker 2>that people who are buying don't come from investment angle hugely,

0:17:27.330 --> 0:17:30.460
<v Speaker 2>but more of a livable space at

0:17:30.460 --> 0:17:33.320
<v Speaker 1>Least for the first property at least. Do you think

0:17:33.320 --> 0:17:36.120
<v Speaker 1>it's fair though that public housing is going for at

0:17:36.119 --> 0:17:38.100
<v Speaker 1>least $1 million dollars in some places?

0:17:38.109 --> 0:17:41.560
<v Speaker 2>I think it's fair. I think in life we can't

0:17:41.560 --> 0:17:44.360
<v Speaker 2>say it's fair or not fair for many instances,

0:17:45.640 --> 0:17:48.420
<v Speaker 2>but when you look at for example, a spin nickel

0:17:48.430 --> 0:17:51.760
<v Speaker 2>or Queenstown or downtown or rocco or boogies,

0:17:52.340 --> 0:17:55.000
<v Speaker 2>If you want to live there and have the convenience

0:17:55.000 --> 0:17:57.910
<v Speaker 2>of everything that comes with it and if you want

0:17:57.910 --> 0:18:01.350
<v Speaker 2>to buy a private property per square foot can cost

0:18:01.350 --> 0:18:05.859
<v Speaker 2>you $3,000 just a square foot of a space while

0:18:05.859 --> 0:18:07.760
<v Speaker 2>even $1 million dollar property,

0:18:08.240 --> 0:18:10.760
<v Speaker 2>But square foot is not even $1,000.

0:18:11.140 --> 0:18:14.810
<v Speaker 2>So it's less than one third of a surprise. But

0:18:14.820 --> 0:18:16.640
<v Speaker 2>on the other hand if he said no, no, we

0:18:16.640 --> 0:18:19.179
<v Speaker 2>have to be fair because it's public housing every place

0:18:19.180 --> 0:18:19.960
<v Speaker 2>also then

0:18:20.440 --> 0:18:23.840
<v Speaker 2>whether you are staying at inn or boogies, it must

0:18:23.840 --> 0:18:26.380
<v Speaker 2>be the same price. But it doesn't work that way

0:18:26.380 --> 0:18:28.670
<v Speaker 2>because the demand and supply in the resale, people will

0:18:28.670 --> 0:18:32.260
<v Speaker 2>be willing to pay a higher price for central locations.

0:18:32.640 --> 0:18:36.709
<v Speaker 1>We're going for a short break, we'll be right back. Hi,

0:18:36.710 --> 0:18:39.449
<v Speaker 1>I'm Adrian Tan and I'm Christina robert. We are the

0:18:39.450 --> 0:18:42.340
<v Speaker 1>host of a new podcast called working, We're here to

0:18:42.340 --> 0:18:44.790
<v Speaker 1>get into the essential things that no one tells you

0:18:44.790 --> 0:18:48.210
<v Speaker 1>about working and company culture from office politics to dealing

0:18:48.210 --> 0:18:51.220
<v Speaker 1>with burnout. If you've ever wanted to eavesdrop on an

0:18:51.230 --> 0:18:54.860
<v Speaker 1>interesting conversation by the water cooler. This podcast is for

0:18:54.859 --> 0:18:58.860
<v Speaker 1>you look out for our episodes wherever you get your podcast,

0:19:01.340 --> 0:19:05.730
<v Speaker 1>you have a very inspiring story. You lived in a

0:19:05.730 --> 0:19:09.520
<v Speaker 1>rental flat, you're running Singapore's largest real estate agency and

0:19:09.520 --> 0:19:14.120
<v Speaker 1>you've also invested in property yourself and you've grown your

0:19:14.119 --> 0:19:18.480
<v Speaker 1>real estate portfolio. Do you think your property investment roadmap

0:19:18.480 --> 0:19:19.850
<v Speaker 1>is still feasible today?

0:19:20.640 --> 0:19:25.760
<v Speaker 2>I wish it is feasible but unfortunately you will have

0:19:25.760 --> 0:19:30.800
<v Speaker 2>to overcome hurdles that are much more harder than during

0:19:30.800 --> 0:19:33.270
<v Speaker 2>my time because the government have

0:19:33.640 --> 0:19:37.980
<v Speaker 2>putting a lot more cooling measures loopholes that people do

0:19:37.980 --> 0:19:40.640
<v Speaker 2>take advantage in the past. Maybe it is not even

0:19:40.640 --> 0:19:43.400
<v Speaker 2>seen as a loopholes the government has made it, that

0:19:43.410 --> 0:19:46.580
<v Speaker 2>property is something that a lot more people should benefit

0:19:46.590 --> 0:19:49.130
<v Speaker 2>and that's why people who are buying a second property

0:19:49.130 --> 0:19:51.550
<v Speaker 2>of third property, even if you're a singaporean,

0:19:51.640 --> 0:19:55.190
<v Speaker 2>You're subjected to additional stamp duties. And then you have got.

0:19:55.190 --> 0:19:57.730
<v Speaker 2>Now total debt servicing ratio. If you want to buy

0:19:57.730 --> 0:20:00.780
<v Speaker 2>a second property, the amount of loan that you get,

0:20:00.780 --> 0:20:03.100
<v Speaker 2>for example the first property the bank is prepared to

0:20:03.100 --> 0:20:06.790
<v Speaker 2>give you 75% loan. But if it is the second property,

0:20:06.790 --> 0:20:09.360
<v Speaker 2>the bank can only give you a 60% loan. But

0:20:09.359 --> 0:20:13.530
<v Speaker 2>during my era our parents era for those young people

0:20:13.530 --> 0:20:14.260
<v Speaker 2>who are listening,

0:20:14.440 --> 0:20:15.460
<v Speaker 2>we had to benefit

0:20:15.540 --> 0:20:17.720
<v Speaker 2>because whether I buy the first or the second or

0:20:17.720 --> 0:20:20.119
<v Speaker 2>the third property, I don't need to pay additional stamp duties.

0:20:20.130 --> 0:20:24.740
<v Speaker 2>Neither the loans discriminate or there's a differentiation in terms

0:20:24.740 --> 0:20:27.740
<v Speaker 2>of a lower quantum but put all those things aside,

0:20:27.750 --> 0:20:31.130
<v Speaker 2>we have to only look at squarely what is available

0:20:31.130 --> 0:20:31.669
<v Speaker 2>right now.

0:20:32.040 --> 0:20:34.450
<v Speaker 2>Very briefly if I talk about my journey, I started

0:20:34.460 --> 0:20:40.160
<v Speaker 2>my first property was a hdB three room resale flat,

0:20:40.170 --> 0:20:42.270
<v Speaker 2>stayed there for a couple of years,

0:20:42.740 --> 0:20:45.560
<v Speaker 2>accumulated some money, sold a flat

0:20:45.940 --> 0:20:48.360
<v Speaker 2>and bought a private apartment

0:20:49.440 --> 0:20:52.050
<v Speaker 2>and stayed in that apartment for some time to

0:20:52.440 --> 0:20:55.340
<v Speaker 2>enjoyed it with the lifestyle and facilities with a swimming

0:20:55.340 --> 0:20:56.370
<v Speaker 2>pool and so on

0:20:56.840 --> 0:21:00.960
<v Speaker 2>and we sold that and we had some little tidy

0:21:00.960 --> 0:21:04.469
<v Speaker 2>profit and capital appreciation and the fact that myself and

0:21:04.470 --> 0:21:06.909
<v Speaker 2>my wife, we worked and our income have also gone

0:21:06.910 --> 0:21:11.550
<v Speaker 2>up and we decided to upgrade to a small landed

0:21:11.560 --> 0:21:15.260
<v Speaker 2>inter terrorists property. So I'm just trying to tell each

0:21:15.260 --> 0:21:15.950
<v Speaker 2>and everyone

0:21:16.740 --> 0:21:19.580
<v Speaker 2>dreaming is one thing is good to have the castle

0:21:19.580 --> 0:21:20.460
<v Speaker 2>that we want.

0:21:21.040 --> 0:21:22.359
<v Speaker 2>But we have to take the first step

0:21:22.740 --> 0:21:27.470
<v Speaker 2>and the first step has to be within our means. Yeah,

0:21:27.480 --> 0:21:29.570
<v Speaker 2>that's perfectly okay, you see. But one of the things

0:21:29.570 --> 0:21:33.060
<v Speaker 2>that I normally used to share to the first time

0:21:33.060 --> 0:21:35.669
<v Speaker 2>buyers or the younger couples will be,

0:21:36.640 --> 0:21:39.480
<v Speaker 2>it is not a good idea to save money for

0:21:39.480 --> 0:21:41.770
<v Speaker 2>your dream home which may not materialize.

0:21:42.540 --> 0:21:45.000
<v Speaker 2>Why do I say that you said that? No, no, no,

0:21:45.000 --> 0:21:46.360
<v Speaker 2>I do not want an H. T. B. I want

0:21:46.359 --> 0:21:48.980
<v Speaker 2>to straightaway go into a private property. That's the lifestyle

0:21:48.980 --> 0:21:51.680
<v Speaker 2>I won and therefore I will save and accumulate enough

0:21:51.680 --> 0:21:52.950
<v Speaker 2>money to pay the down payment

0:21:53.440 --> 0:21:57.200
<v Speaker 2>While you are saving the property prices keep going up.

0:21:57.200 --> 0:21:59.699
<v Speaker 2>Let's say in the next 5 to 8 years what

0:21:59.700 --> 0:22:02.040
<v Speaker 2>you could have bought right now, you plan at a

0:22:02.040 --> 0:22:05.590
<v Speaker 2>million dollars in 8, 10 years down the road, it

0:22:05.590 --> 0:22:08.489
<v Speaker 2>could be 1.4 million. So what you have saved 2,

0:22:08.490 --> 0:22:12.609
<v Speaker 2>300,000 inflation would have creeped up and entry into the

0:22:12.609 --> 0:22:13.359
<v Speaker 2>macro be tough.

0:22:13.440 --> 0:22:15.220
<v Speaker 2>So my suggestion here is

0:22:15.540 --> 0:22:18.169
<v Speaker 2>as long as you are ready

0:22:19.240 --> 0:22:22.060
<v Speaker 2>enter the market regardless of the size of the uni

0:22:22.540 --> 0:22:24.460
<v Speaker 2>and that become your foothold

0:22:24.840 --> 0:22:28.669
<v Speaker 2>and that property keep pace with inflation doesn't matter if

0:22:28.670 --> 0:22:31.710
<v Speaker 2>you bought it for 400 in eight years down the road,

0:22:31.720 --> 0:22:35.410
<v Speaker 2>in the 400,000 property goes up to 55 50 you'd

0:22:35.410 --> 0:22:39.550
<v Speaker 2>have attained a capital appreciation of 100 over 1000 plus

0:22:39.550 --> 0:22:43.350
<v Speaker 2>your savings. Then you use all the accumulated

0:22:43.440 --> 0:22:47.320
<v Speaker 2>CPF and your capital appreciation to upgrade to the next property.

0:22:47.330 --> 0:22:50.590
<v Speaker 2>Because over the next 56 years your income should have

0:22:50.590 --> 0:22:51.929
<v Speaker 2>probably gone up as well.

0:22:52.730 --> 0:22:57.670
<v Speaker 1>Some people think that investing in a property is out

0:22:57.680 --> 0:22:59.850
<v Speaker 1>of their reach and their focus is simply just

0:23:00.340 --> 0:23:03.409
<v Speaker 1>getting your first home and staying there. Do you think

0:23:03.410 --> 0:23:07.600
<v Speaker 1>that property should always be part of someone's investment mix?

0:23:08.440 --> 0:23:13.340
<v Speaker 2>I would always encourage everyone to look at your property

0:23:13.350 --> 0:23:15.550
<v Speaker 2>from an investment angle,

0:23:16.240 --> 0:23:18.270
<v Speaker 2>even though it's a public housing,

0:23:19.140 --> 0:23:22.350
<v Speaker 2>I know it's a very clear direction from the authorities.

0:23:23.140 --> 0:23:26.109
<v Speaker 2>Public housing is not meant to be an investment and

0:23:26.109 --> 0:23:27.460
<v Speaker 2>I agree to that as well.

0:23:27.840 --> 0:23:30.340
<v Speaker 2>But why do I say that for all young couple

0:23:30.340 --> 0:23:33.380
<v Speaker 2>when you buy a property, please do have some element

0:23:33.380 --> 0:23:37.330
<v Speaker 2>of investment in your mind simply because even if you're

0:23:37.330 --> 0:23:38.960
<v Speaker 2>buying in an outlying area,

0:23:39.340 --> 0:23:42.670
<v Speaker 2>If the lease of the property is going to be

0:23:42.680 --> 0:23:45.550
<v Speaker 2>only 70 years or 65 years

0:23:46.340 --> 0:23:48.750
<v Speaker 2>You must understand if you buy a property that has

0:23:48.750 --> 0:23:51.180
<v Speaker 2>got balance 65 year lease and you're going to stay

0:23:51.180 --> 0:23:53.900
<v Speaker 2>there for 15, 20 years and the balance least only

0:23:53.900 --> 0:23:57.640
<v Speaker 2>goes to 40 over years. That property capital appreciation is

0:23:57.640 --> 0:24:01.330
<v Speaker 2>so much muted or it may go into the negative

0:24:01.340 --> 0:24:01.959
<v Speaker 2>slide

0:24:02.840 --> 0:24:04.830
<v Speaker 2>and the fact that you live in that place for

0:24:04.830 --> 0:24:08.670
<v Speaker 2>the last 15, 20 years, paying your hard earned CPF money,

0:24:08.680 --> 0:24:11.670
<v Speaker 2>why don't you buy a property that has got while

0:24:11.670 --> 0:24:13.990
<v Speaker 2>you stay there for the next 10, 15 years. And

0:24:13.990 --> 0:24:17.090
<v Speaker 2>yet the property can have some form of capital appreciation

0:24:17.090 --> 0:24:19.810
<v Speaker 2>which is from an investment angle. So that's why I

0:24:19.810 --> 0:24:22.620
<v Speaker 2>always encourage young couple to say that don't be too

0:24:22.619 --> 0:24:24.169
<v Speaker 2>emotional about properties,

0:24:24.640 --> 0:24:27.230
<v Speaker 2>look at the property for what it is right now

0:24:27.240 --> 0:24:30.180
<v Speaker 2>and whether it caters to your needs, the space, the

0:24:30.180 --> 0:24:30.960
<v Speaker 2>location

0:24:31.340 --> 0:24:33.560
<v Speaker 2>and at the same time pause a moment

0:24:34.040 --> 0:24:37.450
<v Speaker 2>to think about say come 10 to 15 years and

0:24:37.450 --> 0:24:39.770
<v Speaker 2>why do I say 10 to 15 years by and

0:24:39.770 --> 0:24:42.550
<v Speaker 2>large for most singaporeans. I think 10 to 15 years

0:24:42.560 --> 0:24:50.420
<v Speaker 2>your family composition may change your income may change your job,

0:24:50.430 --> 0:24:51.770
<v Speaker 2>place may change

0:24:51.840 --> 0:24:54.640
<v Speaker 2>and therefore it may be good for you to reorganize

0:24:54.640 --> 0:24:56.550
<v Speaker 2>your property portfolio or even shift

0:24:56.640 --> 0:25:00.270
<v Speaker 2>And that's why you must always take into consideration whatever

0:25:00.270 --> 0:25:03.699
<v Speaker 2>I buy now when I want to exceed in 10 years,

0:25:03.710 --> 0:25:06.560
<v Speaker 2>what would be the value of my property for all

0:25:06.560 --> 0:25:08.470
<v Speaker 2>the money that I'm committing in the next 10 years.

0:25:08.480 --> 0:25:11.470
<v Speaker 2>So that's a very worthwhile in depth thinking to do

0:25:11.480 --> 0:25:14.960
<v Speaker 1>so it means we should mentally be prepared to

0:25:15.140 --> 0:25:17.660
<v Speaker 1>move houses throughout our life.

0:25:17.740 --> 0:25:20.350
<v Speaker 2>Yeah, I think I've spoken to many young couple,

0:25:20.940 --> 0:25:23.290
<v Speaker 2>it goes with the same thing when we get married,

0:25:23.300 --> 0:25:25.949
<v Speaker 2>we say for life or grave we are together

0:25:26.440 --> 0:25:28.860
<v Speaker 2>but you and I know how many marriages last.

0:25:29.640 --> 0:25:31.990
<v Speaker 2>That's the truth of the matter and same thing. Most

0:25:31.990 --> 0:25:33.510
<v Speaker 2>people when they buy a property, they say this is

0:25:33.520 --> 0:25:36.459
<v Speaker 2>our home for our life. But it will not be

0:25:36.460 --> 0:25:39.459
<v Speaker 2>the case. But it's not as bad as marriage not working.

0:25:39.460 --> 0:25:41.699
<v Speaker 2>But I think in a home when you ever change

0:25:41.700 --> 0:25:44.410
<v Speaker 2>is a positive thing in my view. Either you write

0:25:44.410 --> 0:25:48.180
<v Speaker 2>size it or you up size it or downsize it.

0:25:48.180 --> 0:25:51.830
<v Speaker 2>It really doesn't matter based on your needs at that time,

0:25:51.840 --> 0:25:54.980
<v Speaker 2>based on what you've invested. Right now, if you take

0:25:54.980 --> 0:25:59.630
<v Speaker 2>a 600,000 mortgage, it will always be a very daunting

0:25:59.640 --> 0:26:03.040
<v Speaker 2>thought for a young couple to take a $600,000 loan.

0:26:03.050 --> 0:26:06.010
<v Speaker 2>I mean you're so young you say that what should

0:26:06.010 --> 0:26:08.360
<v Speaker 2>I even take a $600,000 loan.

0:26:09.040 --> 0:26:10.270
<v Speaker 2>It all depends on the income

0:26:10.840 --> 0:26:14.459
<v Speaker 2>Who qualifies to take a $600,000 loan for public housing.

0:26:15.140 --> 0:26:18.170
<v Speaker 2>There is AM. S. R. of 30% of your income,

0:26:18.540 --> 0:26:22.170
<v Speaker 2>A 600,000 loan over a period of 30 years

0:26:22.940 --> 0:26:26.169
<v Speaker 2>at average let's say 2% interest rate. Currently

0:26:26.740 --> 0:26:30.140
<v Speaker 2>The monthly installment is going to be about 2200, which

0:26:30.140 --> 0:26:34.270
<v Speaker 2>means the household income between the couple has to be

0:26:34.270 --> 0:26:38.170
<v Speaker 2>about 7005. If someone earns $7,500,

0:26:38.740 --> 0:26:43.360
<v Speaker 2>They do qualify to get a $600,000 loan comfortably to

0:26:43.359 --> 0:26:44.350
<v Speaker 2>buy a property

0:26:45.540 --> 0:26:47.960
<v Speaker 2>and monthly they have to fork out

0:26:48.340 --> 0:26:52.690
<v Speaker 2>Only $500 cash because the rest come from their CPF

0:26:52.700 --> 0:26:53.770
<v Speaker 2>ordinary account.

0:26:54.440 --> 0:26:57.530
<v Speaker 2>If the couple says no, I don't want this commitment

0:26:57.540 --> 0:27:00.859
<v Speaker 2>of a $500 monthly. Then

0:27:01.540 --> 0:27:04.860
<v Speaker 2>The household income of the couple has to be $10,000

0:27:05.240 --> 0:27:09.369
<v Speaker 2>If they earn 5000 each and they got $10,000 and

0:27:09.369 --> 0:27:13.470
<v Speaker 2>they take a $600,000 loan over 30 years. The full

0:27:13.480 --> 0:27:16.460
<v Speaker 2>amount can be paid through your ordinary account CPF

0:27:16.840 --> 0:27:20.350
<v Speaker 2>and you don't come out cash a dollar. Therefore don't

0:27:20.350 --> 0:27:23.680
<v Speaker 2>be so worried about taking loan. As long as you know,

0:27:23.680 --> 0:27:26.930
<v Speaker 2>you have a stable career in whatever trade you are.

0:27:26.940 --> 0:27:29.790
<v Speaker 2>You know, there's a demand and you can be employed.

0:27:29.800 --> 0:27:33.680
<v Speaker 2>It's okay to take a loan and buy the right property.

0:27:33.690 --> 0:27:36.380
<v Speaker 1>Yes, don't be afraid of loan but not too much

0:27:36.380 --> 0:27:36.600
<v Speaker 1>to

0:27:36.600 --> 0:27:36.850
<v Speaker 2>write.

0:27:37.040 --> 0:27:38.500
<v Speaker 2>I always never worried about

0:27:38.500 --> 0:27:40.550
<v Speaker 1>loan.

0:27:40.840 --> 0:27:41.060
<v Speaker 2>What

0:27:41.060 --> 0:27:44.560
<v Speaker 1>happens if you have people in properties

0:27:45.040 --> 0:27:48.930
<v Speaker 1>that they are not appreciating for different reasons or they're

0:27:48.930 --> 0:27:52.379
<v Speaker 1>not appreciating as much as they would like it to

0:27:52.380 --> 0:27:53.460
<v Speaker 1>be or needed to be.

0:27:53.470 --> 0:27:56.419
<v Speaker 2>Very good question. Sarah, I really like that. And that's

0:27:56.420 --> 0:28:00.459
<v Speaker 2>why I always advocate all listeners not to take

0:28:00.840 --> 0:28:02.060
<v Speaker 2>your current property

0:28:02.740 --> 0:28:04.959
<v Speaker 2>as a property. That's forever

0:28:05.440 --> 0:28:08.920
<v Speaker 2>Because a property when we purchased five or 10 years ago,

0:28:08.930 --> 0:28:12.950
<v Speaker 2>it could have been an asset, but over time it

0:28:12.950 --> 0:28:15.670
<v Speaker 2>could have muted capital appreciation

0:28:16.140 --> 0:28:18.770
<v Speaker 2>or it may even end up as a liability.

0:28:19.140 --> 0:28:20.359
<v Speaker 2>So what should one do?

0:28:20.840 --> 0:28:24.900
<v Speaker 2>I think one should take an active approach to evaluate

0:28:24.910 --> 0:28:30.220
<v Speaker 2>your existing property portfolio to understand how it has performed

0:28:30.220 --> 0:28:33.340
<v Speaker 2>over the last 5, 10 years. What is the expectations

0:28:33.340 --> 0:28:36.740
<v Speaker 2>in the next 10 years? Has there been a break

0:28:36.750 --> 0:28:40.300
<v Speaker 2>in terms of capital appreciation? And if that is the

0:28:40.300 --> 0:28:43.270
<v Speaker 2>case this is the right time to offload

0:28:44.140 --> 0:28:48.460
<v Speaker 2>and get something else that's still in its life cycle

0:28:48.470 --> 0:28:53.540
<v Speaker 2>has got further growth. So this is something is very actively.

0:28:53.550 --> 0:28:56.770
<v Speaker 2>Some savvy investors does

0:28:57.340 --> 0:29:01.600
<v Speaker 1>what makes a home an asset and a liability. When

0:29:01.610 --> 0:29:03.709
<v Speaker 1>should alarm bells start ringing in our

0:29:03.710 --> 0:29:07.060
<v Speaker 2>head? It is an ally ability in my view,

0:29:07.440 --> 0:29:11.870
<v Speaker 2>if you buy something and for all what you have

0:29:11.880 --> 0:29:12.360
<v Speaker 2>paid

0:29:12.740 --> 0:29:16.580
<v Speaker 2>and for whatever reason when you decide to downsize or

0:29:16.590 --> 0:29:20.010
<v Speaker 2>when you want to cash out the property is not

0:29:20.020 --> 0:29:23.340
<v Speaker 2>at that moment worth what you have paid for. That

0:29:23.340 --> 0:29:25.850
<v Speaker 2>means the property has not worked as hard as it should.

0:29:26.440 --> 0:29:29.850
<v Speaker 2>In my view is in fact a liability because if

0:29:29.850 --> 0:29:32.200
<v Speaker 2>you continue to stay there for another 10 years instead

0:29:32.200 --> 0:29:35.440
<v Speaker 2>of getting let's say 400,000, another 10 years stated is

0:29:35.440 --> 0:29:37.860
<v Speaker 2>only going to give you 300,000. Yeah,

0:29:38.240 --> 0:29:40.700
<v Speaker 2>so it may not be seen directly as a liability.

0:29:40.700 --> 0:29:43.390
<v Speaker 2>Probably you may have paid up the full mortgage loan.

0:29:43.400 --> 0:29:46.180
<v Speaker 2>But the mere fact that at any time when you

0:29:46.180 --> 0:29:49.120
<v Speaker 2>want to visit it is not going to give you

0:29:49.120 --> 0:29:52.460
<v Speaker 2>a better return from what it is today. The longer

0:29:52.460 --> 0:29:53.060
<v Speaker 2>you stay there,

0:29:53.440 --> 0:29:56.979
<v Speaker 2>then I think it is a liability obviously from the

0:29:56.980 --> 0:29:59.520
<v Speaker 2>other aspect, it could be a liability is for those

0:29:59.520 --> 0:30:03.290
<v Speaker 2>people who own more than one properties and you're dependent

0:30:03.290 --> 0:30:06.540
<v Speaker 2>on the rental yield from your tenant to pay the

0:30:06.540 --> 0:30:10.400
<v Speaker 2>monthly installment. But somehow with the interest rates going up

0:30:10.410 --> 0:30:12.270
<v Speaker 2>and your monthly mortgage installment,

0:30:12.540 --> 0:30:14.360
<v Speaker 2>the rent don't seem to be going up

0:30:14.440 --> 0:30:16.900
<v Speaker 2>and what do you collect from the tenant is not

0:30:16.910 --> 0:30:18.270
<v Speaker 2>even sufficient

0:30:18.640 --> 0:30:22.220
<v Speaker 2>to pay your monthly installment in overtime. The gap widens

0:30:22.230 --> 0:30:24.160
<v Speaker 2>then I think it is a liability to

0:30:24.540 --> 0:30:28.050
<v Speaker 2>in all fairness a lot of young couple can read

0:30:28.060 --> 0:30:31.770
<v Speaker 2>from internet and many of those digital platforms,

0:30:32.340 --> 0:30:34.820
<v Speaker 2>but it would be good if you have someone who

0:30:34.820 --> 0:30:36.750
<v Speaker 2>has been in the market for a good 5 to

0:30:36.750 --> 0:30:40.740
<v Speaker 2>10 years, who understand who have got data and statistics

0:30:40.740 --> 0:30:43.050
<v Speaker 2>to show you for example,

0:30:43.540 --> 0:30:45.330
<v Speaker 2>we would be able to track if you say that

0:30:45.330 --> 0:30:49.540
<v Speaker 2>I'm staying in condo A versus condo B and Condo C.

0:30:49.540 --> 0:30:51.060
<v Speaker 2>And we can just plot

0:30:51.440 --> 0:30:55.460
<v Speaker 2>The last 10 years, capital appreciation or price movement or

0:30:55.460 --> 0:30:59.040
<v Speaker 2>the demand. So what would be able to visually see

0:30:59.040 --> 0:31:01.640
<v Speaker 2>is the property has got potential or not. So, but

0:31:01.640 --> 0:31:03.680
<v Speaker 2>you need some experts to come in to help you

0:31:03.680 --> 0:31:04.270
<v Speaker 2>and guide you.

0:31:04.840 --> 0:31:08.030
<v Speaker 1>A lot of people right now look to the older

0:31:08.030 --> 0:31:10.910
<v Speaker 1>generation and look at the gains that they've got from

0:31:10.910 --> 0:31:15.160
<v Speaker 1>property as Singapore's property market boomed during the early years

0:31:15.160 --> 0:31:20.140
<v Speaker 1>for example. But now those gains might be less likely

0:31:20.140 --> 0:31:22.770
<v Speaker 1>because Singapore now is a mature economy and we won't

0:31:22.770 --> 0:31:23.170
<v Speaker 1>see

0:31:23.360 --> 0:31:26.310
<v Speaker 1>that big of a jump in the economy and in

0:31:26.310 --> 0:31:27.650
<v Speaker 1>the property prices.

0:31:27.840 --> 0:31:31.460
<v Speaker 1>So what does that mean then for the younger generation,

0:31:31.760 --> 0:31:33.360
<v Speaker 2>you're absolutely right,

0:31:33.840 --> 0:31:38.040
<v Speaker 2>that's life. But having said that property still makes sense

0:31:38.050 --> 0:31:41.850
<v Speaker 2>if someone invests a second property million dollars

0:31:42.340 --> 0:31:46.190
<v Speaker 2>And you come out even of 40% down which is

0:31:46.190 --> 0:31:49.030
<v Speaker 2>400,000 and you take a loan of 600,000 over a

0:31:49.030 --> 0:31:50.050
<v Speaker 2>20 year period

0:31:50.440 --> 0:31:51.850
<v Speaker 2>And the next 20 years

0:31:52.740 --> 0:31:56.840
<v Speaker 2>You have been renting it out and the 10ant pays

0:31:56.840 --> 0:31:58.260
<v Speaker 2>the monthly mortgage.

0:31:58.640 --> 0:32:00.700
<v Speaker 2>The man at the end of 20 years, the Tenant

0:32:00.700 --> 0:32:02.960
<v Speaker 2>has paid the entire 600,000.

0:32:03.540 --> 0:32:06.760
<v Speaker 2>So the property you bought 20 years ago was a million.

0:32:06.770 --> 0:32:10.459
<v Speaker 2>Your equity was 400,000, you took a loan of 600

0:32:10.460 --> 0:32:13.400
<v Speaker 2>over 20 years and the tenant pays off after 20

0:32:13.400 --> 0:32:15.660
<v Speaker 2>years and after 20 years

0:32:16.040 --> 0:32:19.290
<v Speaker 2>Assuming the property price, what do you reckon it be

0:32:19.300 --> 0:32:25.550
<v Speaker 2>assuming it is even 1.6 million or two million

0:32:26.140 --> 0:32:29.260
<v Speaker 2>5% inflation. And if it's not even compounded.

0:32:29.740 --> 0:32:30.610
<v Speaker 2>So if it is

0:32:31.040 --> 0:32:31.850
<v Speaker 2>two million,

0:32:32.240 --> 0:32:38.410
<v Speaker 2>Your 400,000 equity has gone 500% or even if it

0:32:38.410 --> 0:32:41.840
<v Speaker 2>has just gone to 1.6 million, it has gone your

0:32:41.840 --> 0:32:44.780
<v Speaker 2>400 because when you sell at the end of 20 years,

0:32:44.790 --> 0:32:48.170
<v Speaker 2>the $1.5 million dollar check is all to you.

0:32:48.740 --> 0:32:52.540
<v Speaker 2>So it still makes sense. It still makes sense even

0:32:52.540 --> 0:32:56.250
<v Speaker 2>compared to our earlier parents time and now because property

0:32:56.260 --> 0:32:59.610
<v Speaker 2>generally keep pace with inflation but as long as you

0:32:59.610 --> 0:33:02.230
<v Speaker 2>enter the right property, what I can agree with you

0:33:02.240 --> 0:33:07.850
<v Speaker 2>here is people who bought a landed property in the 1960s,

0:33:08.340 --> 0:33:09.660
<v Speaker 2>$30,000. I

0:33:09.670 --> 0:33:11.060
<v Speaker 1>can't imagine that now.

0:33:11.070 --> 0:33:15.770
<v Speaker 2>Um 4500 in the eastern part of Singapore today. The

0:33:15.770 --> 0:33:18.870
<v Speaker 2>same condition of the house, the same condition

0:33:18.870 --> 0:33:19.930
<v Speaker 1>no enough has

0:33:19.930 --> 0:33:20.670
<v Speaker 2>been done.

0:33:21.540 --> 0:33:25.600
<v Speaker 2>That piece of land today is no less than six million.

0:33:25.610 --> 0:33:30.410
<v Speaker 2>A 30,000 has gone to six million. No less. It's

0:33:30.410 --> 0:33:31.770
<v Speaker 2>likely to be better to be higher.

0:33:32.140 --> 0:33:34.170
<v Speaker 2>So um 10fold. Are we talking about

0:33:34.740 --> 0:33:36.860
<v Speaker 2>Many, many 400 awful

0:33:37.240 --> 0:33:39.570
<v Speaker 2>such things are not likely to happen as you rightly

0:33:39.570 --> 0:33:44.250
<v Speaker 2>qualified by saying that Singapore was a growing economy. If

0:33:44.250 --> 0:33:47.500
<v Speaker 2>you want to wish to have such kind of growth

0:33:47.500 --> 0:33:50.260
<v Speaker 2>potential then go and buy Myanmar

0:33:50.840 --> 0:33:53.630
<v Speaker 2>But to be there and I would advise no better

0:33:53.630 --> 0:33:56.940
<v Speaker 2>not because the risk is too high. Same thing when

0:33:56.940 --> 0:33:59.160
<v Speaker 2>those people who bought it in the 50s and 60s

0:33:59.160 --> 0:34:01.460
<v Speaker 2>in Singapore, they also took a risk.

0:34:01.940 --> 0:34:06.290
<v Speaker 2>We are today stable that was all the formative stages

0:34:06.300 --> 0:34:10.250
<v Speaker 2>but all said, I still think property does make sense.

0:34:10.840 --> 0:34:14.210
<v Speaker 1>Are there any other myths that you think people have

0:34:14.219 --> 0:34:18.100
<v Speaker 1>that you'd like to debunk or maybe areas that they

0:34:18.110 --> 0:34:20.259
<v Speaker 1>are not completely informed about.

0:34:20.640 --> 0:34:23.649
<v Speaker 2>Ah I mean one of the things that we already

0:34:23.650 --> 0:34:26.420
<v Speaker 2>talked about, you want to save enough to buy a

0:34:26.420 --> 0:34:27.960
<v Speaker 2>dream home that will never

0:34:28.440 --> 0:34:31.120
<v Speaker 2>materialize in my view. I always think that it's good

0:34:31.120 --> 0:34:33.480
<v Speaker 2>to have a foothold in the market to keep pace

0:34:33.480 --> 0:34:36.710
<v Speaker 2>with inflation. May be another example if I may give

0:34:36.710 --> 0:34:39.279
<v Speaker 2>here is some of them always like to buy the

0:34:39.290 --> 0:34:44.360
<v Speaker 2>biggest home because they like space, they're like lifestyle.

0:34:44.840 --> 0:34:48.110
<v Speaker 2>But I would say if you have a very big house,

0:34:48.120 --> 0:34:49.460
<v Speaker 2>one house

0:34:50.040 --> 0:34:53.690
<v Speaker 2>and you're so busy working so hard. The only person

0:34:53.690 --> 0:34:56.210
<v Speaker 2>who enjoyed the houses your mate and the dog.

0:34:56.219 --> 0:34:57.350
<v Speaker 1>That's a good point.

0:34:57.360 --> 0:35:01.030
<v Speaker 2>Yeah. So by necessarily buy two houses by one that

0:35:01.040 --> 0:35:03.820
<v Speaker 2>you don't need to be stressed and buy another one

0:35:03.820 --> 0:35:07.870
<v Speaker 2>like the earlier example I give that somebody pays the

0:35:07.870 --> 0:35:09.169
<v Speaker 2>monthly installment

0:35:09.340 --> 0:35:10.960
<v Speaker 2>and at retirement

0:35:11.140 --> 0:35:15.740
<v Speaker 2>you can travel the world. Yeah. So one will have

0:35:15.739 --> 0:35:17.860
<v Speaker 2>to understand what are your needs. As I said

0:35:18.340 --> 0:35:20.700
<v Speaker 2>when we are young we don't tend to think long

0:35:20.700 --> 0:35:23.480
<v Speaker 2>term but people who think of long term they do

0:35:23.489 --> 0:35:24.620
<v Speaker 2>benefit hugely.

0:35:24.630 --> 0:35:27.839
<v Speaker 1>Yeah. So we can talk about buying your first home

0:35:27.840 --> 0:35:30.390
<v Speaker 1>without touching on this is male. What do you think

0:35:30.390 --> 0:35:33.460
<v Speaker 1>should come first? Video application or a marriage proposal.

0:35:33.840 --> 0:35:35.160
<v Speaker 1>Mhm.

0:35:35.840 --> 0:35:37.670
<v Speaker 2>I think um

0:35:38.540 --> 0:35:41.270
<v Speaker 2>wow. I said that if you want to talk about

0:35:41.270 --> 0:35:42.859
<v Speaker 2>a video application,

0:35:43.239 --> 0:35:45.719
<v Speaker 2>how is your marriage don't even take place. But I

0:35:45.719 --> 0:35:47.740
<v Speaker 2>think it's the right thing to do if you're really

0:35:47.739 --> 0:35:51.299
<v Speaker 2>definitely quite agreed upon that you are the life partner

0:35:51.300 --> 0:35:54.090
<v Speaker 2>going to be for each other. My strong suggestion is

0:35:54.090 --> 0:35:56.750
<v Speaker 2>go ahead and apply the BTU because it is going

0:35:56.750 --> 0:35:59.850
<v Speaker 2>to take a good four or five years. But I

0:35:59.850 --> 0:36:02.010
<v Speaker 2>really want to encourage people to look at the other

0:36:02.010 --> 0:36:02.460
<v Speaker 2>option

0:36:02.730 --> 0:36:03.700
<v Speaker 2>and believe me

0:36:03.930 --> 0:36:06.950
<v Speaker 2>I think this is a superior option for most people

0:36:06.950 --> 0:36:10.420
<v Speaker 2>but not everyone to look at resale flat. Why do

0:36:10.420 --> 0:36:12.150
<v Speaker 2>I say that? I think about it

0:36:12.730 --> 0:36:15.130
<v Speaker 2>when you buy a resale flat you get the case

0:36:15.130 --> 0:36:19.350
<v Speaker 2>within three months and you do qualify for higher grant

0:36:19.730 --> 0:36:22.190
<v Speaker 2>compared to Bto Bto. The ground is not so much.

0:36:22.200 --> 0:36:25.350
<v Speaker 2>The government deliberately give higher amount of ground because of

0:36:25.350 --> 0:36:28.460
<v Speaker 2>the price difference. What is your first advantage

0:36:28.830 --> 0:36:32.110
<v Speaker 2>Your marriage and your privacy and to leave your home

0:36:32.110 --> 0:36:36.879
<v Speaker 2>start immediately not five years later. # two your minimum

0:36:36.880 --> 0:36:39.350
<v Speaker 2>occupation period starts the day you collect the keys.

0:36:39.730 --> 0:36:41.160
<v Speaker 2>I mean five years down the road

0:36:41.530 --> 0:36:42.850
<v Speaker 2>you can

0:36:43.230 --> 0:36:47.470
<v Speaker 2>reorganize your portfolio. Either sell the resale flat and by

0:36:47.469 --> 0:36:51.279
<v Speaker 2>an executive condominium or something else. As opposed to a

0:36:51.280 --> 0:36:53.600
<v Speaker 2>Bto flat. You're stuck for 10 years, five years of

0:36:53.600 --> 0:36:56.190
<v Speaker 2>construction plus another five years of M. O. P. So

0:36:56.190 --> 0:36:58.860
<v Speaker 2>you can't manure. Not forgetting the fact if you're going

0:36:58.860 --> 0:37:01.650
<v Speaker 2>to be 28 30 10 years is 40.

0:37:01.830 --> 0:37:04.580
<v Speaker 2>So that five years lead time can mean a lot

0:37:04.580 --> 0:37:05.250
<v Speaker 2>of things.

0:37:05.730 --> 0:37:08.669
<v Speaker 2>So as I said I'm not suggesting everybody should look

0:37:08.670 --> 0:37:11.160
<v Speaker 2>at resale flat. If you can afford

0:37:11.530 --> 0:37:15.029
<v Speaker 2>if you think your aspiration is now, just for the

0:37:15.030 --> 0:37:18.040
<v Speaker 2>next five years or six years to have a decent

0:37:18.040 --> 0:37:21.870
<v Speaker 2>flat without waiting too long for your marriage, go for

0:37:21.880 --> 0:37:22.540
<v Speaker 2>a resale.

0:37:23.030 --> 0:37:25.420
<v Speaker 2>But on the other hand, you said, hey, resale is

0:37:25.420 --> 0:37:27.170
<v Speaker 2>going to be a bit more hefty because the resale

0:37:27.170 --> 0:37:31.420
<v Speaker 2>prices are definitely higher than B. T. O. And video

0:37:31.430 --> 0:37:34.709
<v Speaker 2>much cheaper and it's brand new. Fine. Then you must

0:37:34.710 --> 0:37:36.900
<v Speaker 2>be mindful of the fact that if you apply for

0:37:36.900 --> 0:37:40.000
<v Speaker 2>the video, apply early, if you intend to get married

0:37:40.000 --> 0:37:41.960
<v Speaker 2>in 23 years better apply now

0:37:42.030 --> 0:37:44.969
<v Speaker 2>so that at least halfway through after you got married,

0:37:44.980 --> 0:37:46.250
<v Speaker 2>you don't need to wait too long,

0:37:46.630 --> 0:37:49.690
<v Speaker 1>smell one question before we let you go. So we

0:37:49.690 --> 0:37:53.120
<v Speaker 1>all know you've made quite a hefty sum in the

0:37:53.120 --> 0:37:56.089
<v Speaker 1>property market. Can you give our listeners your view of

0:37:56.100 --> 0:37:58.550
<v Speaker 1>money and what you learned when you had little? And

0:37:58.550 --> 0:37:59.460
<v Speaker 1>when you had a lot

0:38:00.219 --> 0:38:01.239
<v Speaker 2>lot of people may not

0:38:01.620 --> 0:38:02.339
<v Speaker 2>really

0:38:02.820 --> 0:38:04.040
<v Speaker 2>maybe agree with me

0:38:05.320 --> 0:38:07.650
<v Speaker 2>to me. Money has only got that much value,

0:38:08.420 --> 0:38:11.500
<v Speaker 2>honest truth. Probably a lot of people will say when

0:38:11.500 --> 0:38:13.580
<v Speaker 2>you have a lot of people tend to talk like that,

0:38:13.590 --> 0:38:15.140
<v Speaker 2>maybe I'm not so sure

0:38:15.620 --> 0:38:17.980
<v Speaker 2>you have all the money. But if you don't have

0:38:17.980 --> 0:38:19.750
<v Speaker 2>the heart to give it to

0:38:20.420 --> 0:38:24.980
<v Speaker 2>your own loved ones, including your parents, including whoever who

0:38:24.980 --> 0:38:28.900
<v Speaker 2>is in need because you start to halt money because

0:38:28.910 --> 0:38:30.649
<v Speaker 2>money is so important to you

0:38:31.120 --> 0:38:35.390
<v Speaker 2>somehow money won't come to you much because you have

0:38:35.390 --> 0:38:38.190
<v Speaker 2>an affiliation with the money. That money is all paramount

0:38:38.190 --> 0:38:40.790
<v Speaker 2>to you. I'm not saying that just be free and

0:38:40.790 --> 0:38:42.450
<v Speaker 2>just be spent with no

0:38:42.820 --> 0:38:45.149
<v Speaker 2>when you work hard and

0:38:45.520 --> 0:38:48.160
<v Speaker 2>you give money where it is due to make a

0:38:48.160 --> 0:38:50.500
<v Speaker 2>difference in the life of other people as well. But

0:38:50.500 --> 0:38:52.540
<v Speaker 2>it all starts with your own family first.

0:38:53.320 --> 0:38:55.239
<v Speaker 2>I think somehow money has got more meaning

0:38:55.719 --> 0:39:00.850
<v Speaker 2>because it is not about you have multiple millions and

0:39:00.850 --> 0:39:04.230
<v Speaker 2>you still feel that it is not enough versus you

0:39:04.230 --> 0:39:08.900
<v Speaker 2>have enough and you feel so happy that you're rich,

0:39:08.910 --> 0:39:12.250
<v Speaker 2>the state of happiness is in the mind,

0:39:12.920 --> 0:39:16.540
<v Speaker 2>but all said is it's equally important. You must have money,

0:39:17.020 --> 0:39:17.650
<v Speaker 2>work hard,

0:39:18.219 --> 0:39:19.030
<v Speaker 2>earn the money,

0:39:19.520 --> 0:39:22.790
<v Speaker 2>but pure money doesn't give you happiness using the money

0:39:22.790 --> 0:39:25.190
<v Speaker 2>with the right cost, bring greater joy and that's how

0:39:25.190 --> 0:39:25.540
<v Speaker 2>I feel.

0:39:26.120 --> 0:39:29.680
<v Speaker 1>Yeah, that's a great advice. Think long term when it

0:39:29.680 --> 0:39:33.180
<v Speaker 1>comes to your property, don't wait until you've saved all

0:39:33.180 --> 0:39:36.629
<v Speaker 1>the money you need for your dream home. And remember

0:39:36.630 --> 0:39:40.310
<v Speaker 1>that over a long period of time, home prices do

0:39:40.310 --> 0:39:43.799
<v Speaker 1>go up though, there are cycles in between. Thanks so

0:39:43.800 --> 0:39:44.580
<v Speaker 1>much for joining us

0:39:44.590 --> 0:39:45.950
<v Speaker 2>appreciate it. Thank you.

0:39:46.020 --> 0:39:46.230
<v Speaker 1>Okay,

0:39:48.219 --> 0:39:50.930
<v Speaker 1>we hope you enjoyed this episode of money talks the

0:39:50.930 --> 0:39:54.380
<v Speaker 1>team behind this podcast is hope a name, Danieli, Christina

0:39:54.380 --> 0:39:57.719
<v Speaker 1>robert and you've got a refreshed slate of audio material

0:39:57.719 --> 0:40:00.540
<v Speaker 1>you can listen to on your commute or your workout,

0:40:00.920 --> 0:40:02.859
<v Speaker 1>go to the C. N. A. Website or app. Look

0:40:02.860 --> 0:40:05.830
<v Speaker 1>for the listen button and subscribe to the podcast. See

0:40:05.830 --> 0:40:08.800
<v Speaker 1>like if you have thoughts, ideas or even stories you'd

0:40:08.800 --> 0:40:11.480
<v Speaker 1>like to share, please write to us. The details are

0:40:11.480 --> 0:40:15.140
<v Speaker 1>in our episode notes. Until next time. This is Sarah apology.

0:40:17.420 --> 0:40:17.650
<v Speaker 1>Mhm.