Housing Investment- how good is return rate?
Singaporeans are obsessed with housing as an investment. Considering the large number of people scrambling to buy a house even during such times are telling signs that you can know nothing about equities, forex, commodities and derivatives, but you can never miss out on properties. “Land is scarce, so property is a sure win bet here” are one of the main reasons why the HDB auntie next door and the lawyer opposite are saving hard to fund their next property. I rarely hear people asking how much they will be yielding on their housing investment if you buy and rent for 20 years. Many are simply just interested in the absolute gain. The absolute monetary gain (if any), is likely to be large as housing like derivatives are leveraged products! Before I comment further, let’s do some maths here to see if it is really worth our while to buy a 2nd property for investment. Assumptions: 35 year old Mr. Tan just bought a new 99 year leasehold, 1000 square feet property beside Kovan MRT station, fo