Sorry for the lack of update folks. The last several months have been very crazy for me and the hubs because we’ve been house hunting in Singapore!
As you know, my hubs and I bought HH as our first home in 2011 due to the ridiculously high property prices in SG and have been staying here since. We’ve been really happy living in Malaysia, but with our family, friends and work in Singapore, we’ve always felt that it would be good to be able to own a piece of property in Singapore. Just in case, you know?
And so in December 2015, we finally bought an apartment in Singapore.
Initially, we thought we would move back to Singapore. Living in JB always felt like a temporary thing, and that we would eventually go back to Singapore to be closer to our friends and family. However, after doing some calculations (it’s a occupational hazard), we realised that we are by far better off staying in JB. Here’s why:
- It took us between 3 – 5 years to save up enough money for the downpayment of our private apartment in Singapore. We can’t buy a HDB without selling HH, in case you were wondering.
- Because we bought a super old apartment,the interior needs to be gutted out and be completely redone. Wiring, piping, flooring, ceiling….everything. Given the size of the place and the very extensive work required, renovation costs + furnishings + appliances will probably be upwards of S$150k to $200k. So, it will take us another 3 – 5 years to save up enough money to pay for the renovation.
- Adding the downpayment and reno costs together, we would have spent a total of 6 – 10 years to save up for, and buy, an apartment in Singapore.
- If we were to live in this apartment, this piece of property in Singapore then cannot be considered a true asset as it wouldn’t earn us any money. I know for a fact that I dislike moving, and downsizing my property when I’m older for cash isn’t an option that I want to entertain. I like my creature comforts now and I think I will only get fussier when I am older.
- Comparing the monthly mortgage instalment amount between HH and the SG Apt, the SG Apt costs 50% more. Ouch.
- Which also means that because I have to pay 50% more, I will be able to save less for my other financial goals and also have less to discretionary income to spend, affecting my lifestyle. Things are also more expensive in Singapore, thereby affecting my ability to save further.
- Property in Malaysia is hard to rent and the rent may not cover the mortgage loan instalment, which means that a part of our income will have to go into servicing the loan.
This has led us to the conclusion that if we choose to stay in a nice private apartment in Singapore, we would have pushed back saving for our retirement by at least 10 years. And the next earliest time we will only be able to do lump sum investment will be in 15 years time.
OMG…when looking at a SG property from this light, the opportunity cost to live in an apartment in Singapore is very high, right? Or is it just the occupational hazard/finance geeks in me and my husband talking? LOL.
My goal is to retire by 40 and my husband 45. And from our calculations, this can’t be done by living in a super expensive home in Singapore that literally eats up all our income. Glad to say, we’ve now built enough assets, to be at the 50% mark and we managed to do this by living in JB and keeping our costs low.
Have you read about Winnie Tseng and Jeremy Jacobson, the couple who retired in their 30s and who are now travelling the world? The article really resonated with me when I read it as I see a number of similarities between what they’ve done and what we are now doing. Are any of you doing the same too? If yes, I’d love to hear from you.
I suppose you might be wondering why did we choose to invest in a property in Singapore rather than Malaysia? There are a whole bunch of reasons in addition to the above, but I’ll save it for another post as this post has become rather epic already. Till then!