Tuesday, 31 July 2018

99-year leasehold nothing burger

I was having my usual fun at CW's blog on this topic and hey! This poke is good enough for a post at this watering hole!

Reuse, reduce, and recycle mah!

The issue is not leasehold or freehold.

Whether one treats our homes for speculation or not (not everyone is a panda or koala bear).

The crux is have we OVERPAID or not?

If someone wants to sell HDB 3 room with 10 years lease remaining for $50,000, anyone who can count with primary school math would grab immediately (provided eligible)!

Where to find rent in Singapore for HDB 3 room at below $500 per month!? Some more can lock in the rent for the next 10 year! There goes one inflation concern if one is always fretting about rising prices ;)

Rent and invest the rest? LOL!

Similarly, if one OVERPAID for a investment/rental freehold property - like those Japanese during their housing boom - we may have to pass the "under water" property to our children (maybe our grandchildren even!) to collect enough rent to breakeven one day... Rent as panadols?

I remember someone smart did say IMAGINATION is more imporrant than knowledge. I wonder if this is true on this topic ;)

P.S. temperament, I agree with you. Singaporeans have been "conditioned" to parrot buy is better than rent for our homes. And our collective experience has proven it (so far).

Can anyone show me who bought a HDB flat DIRECTLY from big daddy who lost money? Its like trying to find a unicorn...

Now show me someone who lost money buying HDB flat and I'll show you a "bei kambing" who overpaid buying from the HDB resale market. These "bei kambings" who can't count are the target audience for big daddy when they reminded everyone what's the meaning of 99 leasehold. Wink.

But in Hong Kong, at current property prices and rentals we can get, I would prefer to rent. Buying has become speculation; even its for our own stay.

On the China part, I'll have to respectfully disagree with you. I 100% believe you when you said you "think"... LOL!

Our mainland cousins are sweating more bullets than us!

Renew for lease extention that cost only $1 is one thing. Renew and pay up to 1/3 of current property valuation is another thing totally!

Most of the China residential leases are for 70 years. We are better off with our 99-year leases.
99.9999% (yes, its a poke) of us will not live long enough to face this problem. Its something for our children or whoever is lucky to get this hand-me-down for singles like me ;)


  1. Losing money on property is a big mental issue which most retail property investors cannot take it.

    1. CW,

      That's why even for own housing use and not for speculation, we must still give the biggest purchase of our lives the respect it deserves.

      I've shared in the past where my ex-colleague wasn't feeling too pleased when he found out his neighbour one floor below him has bought the HDB 5 room flat at $100K cheaper from the resale market.

      Both boought from resale market. One bought near the peak; the other near the bottom of the cycle.

      You'll be surprised some people buy T-shirts can comparison shop or search online just to save $5...

      But when it comes to their first property... Just buy! No need to look at the price tag!?

      Maybe that's where penny wise; pound foolish came from?

  2. Get married or buy house during bad recessions! LOL

    Anyway if for own living just treat as long-term rental. Hey it's an expense item you know ;)

    Even stay in cockroach-invested workers dormitory also need pay rent.

    Unless hide in Mandai forest --- free & easy! LOL

    1. Spur,

      Ain't it the truth!

      I turned age 35 end 2002. Bought my HDB 3 room for $125K in 2003 under the singles scheme.

      Talk about pure dumb luck! Its the same year our fisherman friend bought his multi-bagger Keppel, DBS, Sembawang ;)

      2003 is a good year for most asset classes. Same goes for 1997 and 2009.

      I guess it depends a lot whether you were buying or selling ;)

      But having said that, even if our house is for own staying, if we play our cards right, we still can take advantage of big daddy's policy generosity!

      There's the classic 2 bites of the cherry. Yes, its sell high; buy higher. But without the gains from our 2 cherry bites, how else to afford the upgrade to private condo on a middle class shepherd's salary?

      Some of the more sophisticated ones can even parlay their condos into landed properties!

      Now that's what I call a truely hand-me-down to our children :)

      All this without getting involved with speculative 2nd or 3rd investment/rental properties; local or overseas ;)

      All we need is just a willingness to move house every 5 to 10 years.

      If within Singapore not willing to relocate, try getting Singaporeans to work overseas!!!

      Got imagination; see possibilities.

      No imagination; go sign up for courses to be told what to do lor!

  3. temperament,

    Walkup apartments and maisonnette are fun when young. Not when you have bad knees or have to use wheelchair :(

    Some of the younger ones even smarter than us!

    During 2009, instead of playing the "safe" route by applying to HDB BTO, they decided to jump straight to condo first.

    Interest rates low, prices at a bargain from a few years before. If not now? When?

    Stay a few years, sell for capital gains and now renting since rentals have fallen.

    The capital gains can be used as startup capital if they want to do something on their own.

    Or just rotting in bank while waiting for the other shoe to drop.

    They may be young, but they understand market cycles better than most "lau kok kok" like us!


  4. Hi SMOL,

    Meanwhile......some bei kambings are totally oblivious to this 99-years leasehold thing, or so I thought. Give and take another few years before they learn about this "new development"

    I was quite surprised when one of them mentioned "adulting" recently. It may not be long till I hear bursts of outrage regarding this "new development."

    1. Unintelligent Nerd,


      If they do not know what cannot be done, maybe some will do the unthinkable thing by moving out of their parent's home by renting a place for themselves BEFORE marriage!?

      What? Cash flow out? How to save for opportunity fund like that!?

      Well, my money is on that 20 something who is independent enough to live on his/her own over a 30 something still living with mom and dad ;)

      When one has little savings and need to come up with next month's rent, no choice but to get creative on how to EARN more!


      P.S. Now to poke myself: I'm 51 and living with mom... Ouch!

      Well, at least I'm not a virgin!


  5. I still hear a lot of these:

    Buy now, children cannot affOrd them when its their turn.
    Buy properties sure win
    Buy properties got holding power sure win.

    1. Sillyinvestors,

      During my time in Shanghai, when new records in opening of new brokerage accounts were broken every week during 2007, my company driver was boasting to me Beijing will not let the stock market crash DURING the Beijing Olympics 2008.

      All of sudden I remembered the story about receiving stock tips from shoeshine boys...

      True enough, China's stock market crashed BEFORE the Beijing Olympics.

      And if you bought China stocks near the top during 2007, you still have not broken even after 10 years despite all the money printing and stimulus by Beijing...

      We get a lot in Singapore that this and that company is Temasek linked... Won't fail one...

      This despite big daddy selling off Chartered Semi-Conductor and NOL... Yeah, didn't fail, but if you OVERPAId, don't expect big daddy to bail you out...

      You practice buy and hold; Temasek didn't.

      Big daddy has a tireless time "intervening" in Singapore's property market.

      Hello! How can $800K for new condo with 70 years lease be "cheaper" than $1 million with 99 years lease?

      Hey! Who will buy or rent that shoebox apartment in "ulu" suburbia? You never studied or worked overseas is it?

      There people rent shoebox apartments INSIDE the city as they are willing to sacrifice space for proximity convenience.

      In suburbia, your targeted (not well off) tenants would probably prefer to rent from HDB flats instead! Same rent; bigger space. What thinking you?

      When vested interests talk up the property market; big daddy added cooling measures.


  6. Problem is the same as of all.makets, bull, buy high sell higher, buy higher sell even higher. Elevated tp guru status,

    1. Sillyinvestor,

      That's why in retail we say a merchandise well bought is a merchandise well sold.

      My retail background has worked well in my trading.

      I buy paper assets with the ultimate goal of selling for a profit.

      Buy-and-hold "investors" are like art or antique collectors...


      Bad examples. Art and antique collectors DO sell part of their collections to fund new acquisitions ;)

      Marriage? Surely that's buy-and-hold?

      Eh... If we can be wrong about a person we can touch and feel, what makes you think our convictions on a paper asset will be any better?

      Singapore must be buy-and-hold! Just like the British Empire, the sun will never set...

      OK, OK. I better stop poking ;)


  7. Hi SMOL,

    I think the prospect theory can explain this.

    Loss aversion.

    Any outflow of money being framed as expenses will induce pain.

    People don't realise it is just semantics.

    Buy term insurance and invest the rest now becomes very compelling because the perceived loss is compensated by some promising gains. Try changing it to buy term and spend the rest! LOL.

    When we consider opportunity cost, things that can't be counted in dollars and cents might well be more important than those that we can count.

    But for parrots, their vocal chords are way bigger than the size of their brains. Easy to mimick than think. :P

    1. Endrene,

      Its just a flesh wound!

      Unrealised losses don't count.

      I'm a LONG term investor; I always triump!

      A lot of bad advice comes from well meaning, but clueless friends.

      Its like those who just converted into a new religion, all of sudden now becomes a know-it-all and "authority" on that religion!?

      Makes a fool of themselves and then go to their "if you believe me follow me" guru and ask, "How do I convince my..."

      The guru must be secretly thinking, "Hello! If you can easily turn anyone you talk to, I'll be out of a job!"


  8. temperament,

    I see you are quoting Dr Tan Kee Wee ;)

    We know the similar "truth" as we have legions of battle scars on our bodies to show, and having swallowed our fair share in lumps of coal down our throats...

    I no study and no papers. What I say carries no weight ;)

    I'm shallow like piss on the sidewalk.

    I wonder how many will brush off a Phd holder, someone who advises institutional clients, and teaches economics at our local U ;)

    LOL! Dr Tan also thinks 90% of retail "investors" lose money!?

    What's the difference between a retail "investor" and retail trader?

    The former can say, "Its just a flesh wound!"

    While the latter don't have that luxury...

    Not when you have busted your trading account; your broker will kick you out of the playground!

    That's cold :(

    Where is the love?

  9. SMOL,

    No paper qualification is secondary. The most important thing is life experience. 51 years of life experience not an easy feat. Must milk more "juices" from your insights.


    1. Ben,

      I'm an old goat.

      Even if you want to milk my "juices", I won't let you.

      Unless you woman ;)

      My "juices" are for women only. C'mon baby you can light my fire!


  10. SMOL,

    Old Goat is equivalent to antique-brewed wine. The longer the duration, the more authentic and unique the "juices".

    Too bad, I am not a woman and privileged and entitled for the "prize"



    1. Ben,

      Unless you are as "pretty" as those ladyboys in Thailand ;)



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