The Response to Responses of Article #wakeupandsmellthefuckingcoffee

Somehow the post appeared on TRS to my surprise. No, I'm not surprised a post from this site appeared somewhere without my knowing but the fact it appeared elsewhere since it was just schizophrenic self talk in my drunken stupor, nothing noteworthy to be debated about. 

Since I hadn't been in a good mood recently, I thought it was no harm reading the comments of TRS readers for some comic relief. Such as:

Daniel Choy ·  Top Commenter · Works at 沙冈万山福德祠醒狮团 Sar Kong Lion Dance Troupe
Sounds like a pro PAP article telling people how good still Singapore is... knn... my bloody 5rm hdb at sengkang already 500k... cqn the writer tell me Singapore or Australia better?

I did a quick search and found that not a single "Singapore" was used in the entire post. Nothing was mentioned about whether Singapore was better than Australia or not. It was intriguing how this commenter bends his imagination like David Beckham could with a football.

This writer must really have some bad experiences there. He's denting his frustrations by writing this article.I just came back from Melbourne after visiting my friends and relatives ( some living there for more than 30 years). All have positive views living there. They wholeheartedly support me when I mention about migration.


  1. Hi, my thoughts are that money is fungible. It boils down how much Seraphim's property appreciates vs how much is your investment rate of returns.

    The advantage of property investment is that it allows a big leverage when one starts off young. Few other investments allow the same magnitude. The other advantage of property investment is forced savings. For those who are less disciplined, the excess cash from lower rental vs mortgage repayment may find its way to other discretionary expenses.

    To cite your example of running off with 1.4m, the property owner can do similar by selling his property to be on the same position as the renter at retirement. One issue with property ownership is the psychological/emotional attachment to the asset, thereby the need to ensure that it has to be fully paid and passed on as a family heirloom.

    That said, I would agree with you that "a tenant may not be worse off under certain circumstances". One just need to be nimble and flexible.

  2. Hi Nix,

    Are we discussing about buying a land property as a home for our family or as an investment? Because if we are thinking of a home for our family, then landed will always be better than apartment and both landed and apartment will always be better than renting. I'll reply later on why it is so if you are interested in my perspective.

    Since we are talking about money, I'll assume it is from an investment perspective. You are correct in saying that buying a property is not as lucrative as many other investments. However, not all of us are born investment guru and know what to invest in. (Example: yours sincerely) Not to mention having a 7% annual profit. Properties offers one of the most stable yearly increment for an investment and landed properties allows for variables that you can change to make it work for you. (Examples from previous post) Of course, with investment comes risks, however the risk involved are a lot lower and higher in gain compared to many investments. Properties can be sold once you deemed you will make a profit from the sales and it cannot be taxed by the taxation office if you only own 1 property and state that you lives there. And yes, it is actually a loophole in the Australian tax office... And in investment property, you do not spend much on renovation. It is either you tear down the whole building and build a much more expensive one or wait for it to increase in price within 1-2 years and sell it off.

    1. I think my point didn't get across. Be it buying land, a house for living or investment, it can pay off if the conditions behind the purchase are right. Since we have decades of data behind us suggesting a 'most stable yearly increment', it is easy to assume the next decades to come produce the same results.

      Secondly, buying a property with 100% cash down is not the same as borrowing 90% to finance it; and borrowing at an interest rate of 2.5% Singaporeans are used to is miles different from a 5-7%.

      I wrote this to urge for more to think harder and not to argue against property investing nor debate whether it is better to buy a house or rent.

  3. Seraphim,

    Since you claim to be financial illiterate, I will benefit you and my fellow gutsy Singaporean (who have the courage to come here). Forgive my singlish:

    Rise of Auz property:

    1st wave - during the 90s. Due to credit expansion, loan to value ratio (LVR) jump to 80%. Suddenly everyone can buy a house. Price spike. Imagine - at 50% LVR, $10 cash in hand can only borrow another $10, but at 80% LVR, $10 cash in hand allows you to borrow $40. No wonder. Birth of property bubble. Baby boomer all laughing (we will come back to them).

    2nd wave - early 00s. After everybody got a house, price growth slows down but bubble did not pop due to income growth. Economy was good. John Howard wants to buy vote and started negative gearing and 1st home owner grant. House prices spike again.

    3rd wave - pre 2008 Lehman Brothers financial crisis. A time when 'house price will never fall'. LVR was stretch to 99% (some say 110% to cover buying cost). Listen, $10 cash on hand can actually borrow $990. Price kept rising.

    4th wave - Then comes financial crisis. Price didn't drop! Why? Mining BOOM! That means income growth. On one hand earn more money, on the other hand can afford to borrow more, due to record low interest rate. Price keep rising despite crisis!

    Current wave - mining boom is over, economy is in so so shape and so no income growth. BUT, remember the baby boomer? The biggest benefactor of property boom. They are now retiring and they are rich. In the past two years, these people set-up Self-managed super fund (SMSFs) so as to invest in property. Because... HOUSE PRICE NEVER FALL!!! They are the answer to the latest price rise.

    So what now?
    Credit expansion - limit liao.
    Government stimulus - no money liao.
    Mining boom - over liao.
    Income growth - finger cross liao.
    Lower interest rate - near the end liao.
    Baby boomer investment - now holding the market.
    Fellow sinkies, even if cut and run is too radical for you, you certainly should not get in the market now. Please put your money somewhere else.
    Please share this message with fellow sinkies, but please please please don't tell the baby boomers. They created the mess and they should clean up the mess.

    1. Hi slmonk,

      I understand the concept and I also understand why now is not the right time to invest in a property. Perth's main industry is mining and the property prices are dropping along with the mining downturn. And unfortunately/fortunately, I'm not living in western Australia...

      I know about negative gearing and super and how they work. (And about the reduced tax you have to pay, but I'm not paying much tax anyway...)

      On saying that the land the house is built on is the real deal. Yes, I agree that land is the valuable thing in landed property. Location also plays a huge part in the property market as there is no point in buying a large land in the middle of nowhere as an investment, unless you intend to be a farmer or you know there are valuable deposit under that property, like oil and such.

      On the issue on the house being a liability over time. I personally believe that a newly built house is an asset that allows you to sell it off at a higher price than the original one. Which is also why I said the investment property will normally be sold off in 1-2 years. Something like a new product. It starts off at an inflated price and began to drop gradually. If the investor does not have the money or skills to rebuild the house, then they will just wait for the valuation of the land's location to go up and sell it off within the next few years. (Which is to also say you are correct.) And it is the location of the land determines how much value it holds.

      And lastly on me being an investment idiot. I have no idea what to invest in and how to start one. Hence I decide to look into properties, since it is safer than most other investment. I personally see property as an investment that is low risk, high gain, but requires large amount of capital. However, like all other investments, there are things that affect them both positively and negatively. And currently, things looked pretty negative. Recession is looming in Australia and I do agree it is not the time to invest in property. However, it is in no way saying that an investment in property is a bad choice.

      And finally, thanks you for your input, your advice of goodwill and suggestions.

    2. You are welcome.
      I agree with that property is a good investment when not overprice, especially with negative gearing.

  4. Seraphim,

    Forget to tell you. If not sure where to invest, put in your super. Save you lots of money just from tax alone. No other investment can challenge. Of course unless you are not paying much tax.

    $100 income only give you $65.50 to 'invest' in your mortgage (assuming tax rate of 32.5%+2%).
    $100 income will give your super $83.50 to invest if you salary sacrifice into your super (15%+2%).

    Lastly, the house that owner lived in not an investment. The land where your house is build on is an investment. The house is a liability - cost you money to build and maintain and lose value over time.