The Rising Property Market And Interest Rates

Most of us would know that housing prices is rising again in Singapore. The sales of new private homes are also going up where we see more and more people getting interested to buy properties now. This seems to be the right time to purchase a property at the right price and also when loans are still cheap.

The following chart shows the SRX non-landed private property index from January 1995 to December 2017. We see a dip in the property market after the high in February 2013. The lowest price recorded was in December 2014 and November 2016. At current prices, it has almost reached the high back in February in 2013. It seems like the property market may breakthrough that level and continue to go higher soon. This explains why many people are entering the private property market now hoping that prices will continue to go higher.

For HDB, it is a totally different picture. Resale prices of HDB seems to be continuing on a downtrend after falling from the high in March 2013. The regulations for HDB flats such as the 5 years minimum occupation period, the limitation of loans to 30% of your gross monthly salary, the maximum loan tenure of 25 years as compared to 30 years for private properties and the restrictions of not being able to rent out your HDB flat even if you purchase a private property makes it hard for the prices to go up.

This is in line with the government's push for affordable public housing in Singapore. I don't see HDB as an investment at all because the main use of it is still for personal accommodation. However, I do foresee that private home prices should continue to go up moving forward with better economic outlook.

For those who already own a property

On the other side, many people would have already bought a property previously. If you've bought your private property at a high back in 2013, the good news is that prices are going above that soon. For HDB, its a different story.

With better economic outlook and rising property prices, interest rates are rising as well. If your housing loan is still currently on a floating rate package, its time to take a look at it before it creeps up. The SIBOR, which is the Singapore Interbank Offer Rate is the most commonly used benchmark for housing loans in Singapore. The 3M SIBOR now stands at 1.42% and the 12M SIBOR is at 1.66% as at 5th January 2018. You can refer to the official SIBOR rates here. The 3M SIBOR has increased more than 0.5% from the previous low.

Interest rates will surely go higher from here. There is no doubt about that. Its just a matter of time interest rates will increase. With the US Federal Reserve hinting on more rate hikes and stock markets across the globe rising to record levels, interest rates should not be remaining low forever.

How Much Your Loan Instalments will Rise? 

If you have a $300,000 loan, a 1% increase in interest rates will result in your monthly instalment increasing by close to $150/month. That is additional $1800/year. For a $500,000 loan, an increase in interest rates of 2% will result in your monthly instalment increasing by about $500/month. This is $6000/year. The higher your loan amount, the greater the impact it will be.

Don't forget that the norm for interest rates were about 3%-3.5% in the past. We should always be prepared for this to happen.


Refinance Your Home Loans to Lessen the Impact now

Fortunately, before the rates rise even higher, we can always refinance our home loans to lessen the impact at least for the next few years. I have worked with banks in Singapore for many years now and always on the lookout for the best loan packages for everyone.

It is recommended to go for fixed rates now and the best I can get is as below:

For both HDB and private property (Min loan amount $200,000)

2 years fixed rate

Year 1: 1.65% (Fixed)
Year 2: 1.65% (Fixed)
Year 3: SIBOR + 0.70%
Thereafter: SIBOR + 1.00%

3 years fixed rate

Year 1: 1.85% (Fixed)
Year 2: 1.85% (Fixed)
Year 3: 1.85% (Fixed)
Thereafter: SIBOR + 1.00%

For the above 2 packages, you can get cash rebate and shopping vouchers as below:

Isetan Shopping Vouchers

* Shopping vouchers applicable for both new purchase and refinancing


Cash rebate

*Cash rebate for refinancing only


If you're interested, you can email me directly at sgyounginvestment@gmail.com

I'm not sure when this fixed rate package will be revised as many banks have already adjusted their fixed rate package upwards in the last few weeks. This is the last one which still has attractive rates.

For those looking to buy a HDB flat or a private property, now is a good time to look at it. If you need assistance in your property purchase such as knowing your loan eligibility or not sure what's the process, you can email me as well. Any other questions you have, I'll try to help as much as possible too.

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Setting My Directions And Goals For 2018

2018 came as a bad start for me as I experienced the loss of someone close to me. You can read this episode of my life here. My world view has changed because of this. Nevertheless, I am still living in this world and will still be setting my goals for this year.

Life is really short and this has kept me thinking what kind of goals should I set for myself this year. I should be asking what kind of thing I want to do so that I do not take life for granted and make an impact as much as possible. This sets the directions for my goals this year.

My Goals for 2018

1. Helping more people

The first goal which I want for this year is to help more people. There are many ways to help people but the best way is to enjoy doing it rather than helping for the sake of helping. When it comes to helping people, most people think of volunteering. While that is one way to contribute back to society, we can also help people through our own life.

For instance, blogging has allowed me to help more people than I can ever imagined. Since the start of my blog, I've replied to all emails as much as I can to answer any questions which readers might have. I enjoy doing it because I get to help someone out there. For the year 2018, I will continue to do that and reply to all emails which anyone sends asking for advise or help. I also thank the readers who have contacted me to tell me how my blog has benefited you personally. This keeps me going as the motivation of this blog is to help as many people as possible.

I have also helped people through my expertise in housing matters. Since 2 years ago, I started a free mortgage advisory service on my blog where I personally advise people on housing matters including how much loan one can take and also the best loan to take for housing. I also work with law firms to do the conveyancing. I am happy to say that I will continue to do this for this year. I will continue to give my best advice for any housing matters.

Lastly, I'm thinking of setting up additional complimentary services to alleviate the pain and problems which people will normally face on another aspect of life. This is a project in progress and will be revealed when its ready.


2. Do at least one thing I've never done before in life

Yes life is short and this made me want to experience life as much as possible. I've done many things in my close to 30 years of life but I want to set myself a goal to do something I've never done before this year.

Honestly, I have no idea what I really want to try or experience but I will give it a good thought in the next few months. Hopefully by the end of the year when I review back my goals, I can then write what I have done differently in year 2018.


3. Spend more quality time building relationships

Relationships become even more important after the death of a close cousin of mine. I still remembered the last words I told him was to meet up after he comes back from his overseas trip. In the end, he never made it back... It was quite a shock to me.

There are so many relationships which we may take for granted especially our family members. I always value family a lot because as time goes by, I realised my parents are getting old and time is running short. All of us have limited time in our life. With work taking up most of the time in life, what we are left with is just that few hours a day to spend time on friends and family. Not forgetting spending time with our love partner if we are attached or married.

With limited time, the key is spending quality time with our loved ones. This include friends too. Quality is the key for me this year as I refocus to build quality relationships too with friends and family members.


4. Achieve $20,000 passive/other income 

Money may not be everything but everything needs money. I'm still on a mission to replace my active income as much as possible so that I can get more time by making money work hard for me. To have the freedom of time to do what we love is always a dream for many. To make it happen, it requires deliberate planning and execution and patience to see through it. 


Because of certain things that happened, money is needed more than ever before. Even though my goals is not just to make money for the sake of it but it is to make sure there is enough for the future.

In 2017, I manage to create $19k+ in passive/other income. For 2018, I think it would be good if I can just maintain it.

You can read this post on how I manage to create the $19K+ passive/other income.


5. Planning for the future 

Lastly, and the most important one, is to plan for the future with my partner. We are still in the process of trying to get a flat and also trying to plan for wedding and all the necessary stuff for our future.

It has not been an easy time in 2017 and even going to 2018 as many things happened. I pray that 2018 will be a better year for me as well as my loved ones. This sets the direction of my life in 2018.

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Life Is Too Short - Experiencing The Pain Of Life

This week has been an extremely tough week for me as well as my family. On new year's eve, I received information that my cousin could have got into an accident. Moments later, his passing away was confirmed which was a devastating news for me personally. He was only 27 years old and just celebrated his birthday a few days before the incident happened.

This cousin was close to me, very close in fact. 2 days before his passing on, we still communicated on the phone and I said that when he comes back from his overseas trip, we can arrange a time to meet. But, he didn't manage to come back. The whole of this week was very tough. We tried to help out for his wake as much as possible. It was an emotional 3 days as his friends came one after another. Hundreds of them came from all across Singapore. Some gave their eulogy and I could sense my cousin made an impact in his short 27 years of his life.

It is painful to lose someone close to you in life. We grew up in the same neighbourhood together for the past 20 over years. I would go over to his house and he to my house as we stayed quite nearby. A lot of things I do now still reminds me of him. Even going to the gym this morning reminds me of him because we went to gym together before and he would always encourage me to do more sets and tell me how the exercises should be done. We also had late night chats at one of the benches at the sports complex. Its hard to forget someone close and really now I understand what it means to lose someone.

My cousin was special. He was passionate about finance and investments as well. We often talked about life, about investments and the dreams he had to have his own business. Knowing I had a financial blog, he got me involved in the investment club he was in at NTU. I attended a few events organised by NTU interactive investment club back in 2015 such as FINEX which is a financial amazing race style event, Singapore Financial conference and lastly the National Cashflow competition. Some of you may have attended these events too as I posted it on my blog.

The national cashflow competition used the financial boardgame cashflow 101 for many years but some of the concepts were not that applicable in the Singapore context. One of his NTU professors whom he respected a lot came for the wake. The professor said he was a special student, often standing out among the class. When the professor said maybe we should have a Singapore version financial board game, my cousin was quick to take up the task and created a whole new financial board game for use for the competition. To this day, I'm impressed with the concepts he came out, the game flow and the many late nights he spent just to complete the board game in time for the competition. The financial board game was named Asset Finesse which means having the skills and ability to manage our assets with ease. I was told by the professor that the game is still used in the national cashflow competition till this day. He has indeed left a legacy behind.

As you can see, the board game was played by hundreds of students all across Singapore, 500 to be exact every year. I am proud of the achievements he has made. Even though he is no longer in this world, the ideas he left behind is still making an impact.

He was also very hardworking in his life. He made it to the deans list during his studies in a local Polytechnic. In army, he made it as an officer. In University, he was actively involved in the investment club and still got a first class honours for his degree despite his busy schedule. At work, he got a scholarship from Spring Singapore and started work in an SME under their management associate program. For his life, I would think he has lived a fruitful one. He went to Indonesia to start a business for 6 months and he managed to speak fluent Bahasa Indonesia in a short time. He also went travelling to many countries, making new friends and was also able to pick up and speak fluent Japanese.

I'm sure he is in a better place now with no sorrows or worries or burden. We are both Christians and we believe in eternity. When I received news of his passing on, a passage from the bible just pop up in my mind which I reproduce below:

A Time for Everything

For everything there is a season, a time for every activity under heaven. 

A time to be born and a time to die. 
A time to plant and a time to harvest. 
A time to kill and a time to heal. 
A time to tear down and a time to build up. 
A time to cry and a time to laugh. 
A time to grieve and a time to dance. 
A time to scatter stones and a time to gather stones. 
A time to embrace and a time to turn away. 
A time to search and a time to quit searching. 
A time to keep and a time to throw away. 
A time to tear and a time to mend. 
A time to be quiet and a time to speak. 
A time to love and a time to hate. 
A time for war and a time for peace. 

What do people really get for all their hard work? I have seen the burden God has placed on us all. Yet God has made everything beautiful for its own time. He has planted eternity in the human heart, but even so, people cannot see the whole scope of God’s work from beginning to end. So I concluded there is nothing better than to be happy and enjoy ourselves as long as we can. And people should eat and drink and enjoy the fruits of their labor, for these are gifts from God. And I know that whatever God does is final. Nothing can be added to it or taken from it. God’s purpose is that people should fear him. What is happening now has happened before, and what will happen in the future has happened before, because God makes the same things happen over and over again.

Ecclesiastes 3:1-15


Life is short. Experiencing this episode has changed the way I see life from now onward. Who would have expected that a young man in his 20s would pass away so quickly. Rest in peace my dear cousin and till we meet again in heaven.