Last night, I met up with my friend, CH, for a catch-up dinner at a local Chinese restaurant in the Tiong Bahru neighborhood. CH is originally from Kuala Lumpur in Malaysia. He came to Singapore in 2010 and naturalized as a Singaporean citizen in October 2022 after being a permanent resident for several years.
One of the first major things CH did after becoming a citizen was to buy a publicly subsidized apartment, known as an HDB unit, built by the Housing Development Board of Singapore. The property he bought is located in a relatively central area of the city, within walking distance from the subway station. It has a floor size of around 950 square feet (88 square meters), and cost him around SGD 825,000 (USD 634,000) before the renovation expenses.
CH paid SGD 325,000 (USD 250,000) in cash, and took out a mortgage for the remaining SGD 500,000(USD 384,000), payable over the next 15 years. That represents a monthly payment of SGD 3,400 (USD 2,600). Assuming he gets around SGD 2,000 (USD 1,500) in CPF, Singapore’s mandatory social security savings scheme jointly funded by the employer and employee, he only needs to pay SGD 1,400 (USD 1,100) out of his take-home salary.
This is quite a reasonable sum to pay for an apartment of such a comfortable size. CH is also wise in that he didn’t overleverage himself in buying this property. He and I are about the same age, having less than 15 years to go until the retirement age. While leveraging can be good for you if the market swings in your favor, the opposite can also be true, so we need to be cautious. I’m happy for him that he found such a good buy.
Having said that, the downside for CH of buying this property is that his commuting time has gotten much longer than before. Currently he commutes to work and back spending 70 minutes each way, significantly eating into his precious hours of sleep every night. As I require a sufficient amount of sleep to function properly at work, I probably wouldn’t be able to cope with such an exacting schedule.
My plan is to keep renting a centrally-located apartment, so long as I remain employed. I spend around 20 minutes on my way to work and 30 minutes on the way back, a reasonable amount of commuting time. While I don’t consider myself obsessed with money and professional success, one thing I do appreciate is the value of time, so it’s imperative that I live in a place close to my workplace.
After I retire, I’ll no longer have to worry about living close to work, affording me more flexibility in choosing a property of my liking. Even after becoming location-independent, my top priority in selecting a place would still be proximity to the nearest subway station and supermarket, as I’ll need to cater for my physical strength, which will inevitably weaken as I age.
Unlike other metropolises in Asia such as Tokyo, Shanghai, and Beijing, the beauty of living in Singapore is that the city-state is so compact-sized that you can get to most places within an hour by train, no matter where you live. It also helps that Singapore’s subway network is still expanding, bringing even more convenience to residents. As such, I’m not too concerned about which locality to live in, so long as my place is close to a subway station.
Although I’m not in a hurry to buy a place, property investment remains a fascinating topic for me, and I never get tired of checking out property listings on the Internet. I’ll spend the next few years saving up more cash and reading more books on the subject. Undoubtedly, it will be the biggest purchase I’ll ever make, so I’m determined to do it justice by preparing fully.
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