Tuesday, June 27, 2017

Your House Is Not Really Your Asset - How a HDB flat might depreciate over time?

Recently, a particular news shocked many people in Singapore. For the first time, the government has confirmed to take back 191 plots of land in Geylang Lorong 3 when their 60-year lease expires in 2020. For a long while, many people do not believe their housing price will go to zero when the lease expires. This is a confirmation of what is to happen in decades to come for the other housing estates which will have their leases expire in the future.

SLA has said no compensation will be given and no extensions are allowed. Unlike land acquisition by the Government, where compensation is given for the remaining lease, Geylang Lorong 3 residents will not get any since the lease will have run out in 2020, said the Law Ministry's deputy secretary Han Kok Juan.

Your House Is Not Your Asset In Singapore

This is quite scary for many Singaporeans who thought their house is their asset and they can cash out of it when they are old. This can only happen if your house still has a long lease left. To put the matter into perspective, let's see what happens to the value of your house as the lease gets lesser and lesser.

Adapted from The Straits times
Click to enlarge

The Straits times has a very good chart to show the value of a HDB flat depreciating as the lease expires. There are a few critical points before the value of the flat goes to zero. If your HDB flat or any leasehold property has 45 years or less lease currently or reaching the 45 years mark, its time to take note of what is going to happen should you still decide to hold it.

1. No Bank loans with less than 35 years lease left

Banks do not lend out for properties with less than 35 years lease left. This means if your property is less than 35 years lease now, a person who buys your property cannot loan from the bank. This is a very big restriction for any buyers of your property and if they do not have cash to pay for your property, they can't buy it as well. This makes it very difficult for you to sell your property to potential buyers. As such, at the 35 years lease mark, the value of the property greatly depreciates.

2. With less than 30 years lease left

At the 30 years lease mark, the property value greatly depreciates again. This is due to the fact that CPF cannot be used for any downpayment and mortgage servicing. On the other hand, HDB loan is still available if remaining lease covers the buyer up to age 80.

3. With less than 20 years lease left

With less than 20 years lease left, both bank loans and HDB loans are not available. It is almost impossible to sell your property at a high price now as buyers can't get any loan financing from anywhere in Singapore. If a buyer wants to buy your house, they will have to pay all in cash.

Flats with leases expiring in Singapore

National development minister Lawrence Wong said in a blogpost in March cautioning people that "As the leases run down, especially towards the tail-end, the flat prices will come down correspondingly, So buyers need to do their due diligence and be realistic when buying flats with short leases. This is especially important for young couples, who have to plan for a much longer future." He said.

For young people, it is especially important to plan ahead when buying a house especially if you're considering a resale flat. If you buy a BTO, it won't be a cause of concern as BTOs start with 99 year lease.

There are many old estates in Singapore which are in prominent locations around Singapore. These are especially popular for young people because of the location. But, the lease expiry is a concern now as confirmed by the news of the flats being taken back by the government at Geylang Lorong 3 and also how the value of the HDB flat depreciates over time.

To check the leases of HDB flats in Singapore, you can refer to HDB website here. I will list down some of the areas that has lesser leases in Singapore.

1. Toa Payoh (Lor 4) - 50 years lease left

Some flats in Toa Payoh has about 50 years lease left. If a buyer buys a flat here and takes a bank loan, he can only get a loan tenure of up to 20 years (to 30 years lease). In 15 years, no buyers can take a bank loan for the properties here anymore.
Click to enlarge

2. Queenstown (Stirling Road) - 50 years lease left

Another estate with 50 years lease left is Queenstown. This is similar to Toa Payoh.
Click to enlarge

3. Geylang (Kallang Bahru) - 55 years lease left

Click to enlarge

4. Serangoon (Lor Liew Lian) - 59 years lease left

Click to enlarge

The above are some of the estates with HDB flats less than 60 years lease. In Singapore, out of about 1 Million HDB flats, 70,000 are more than 40 years old and about 280,000 are 30 years to 40 years old. This puts their remaining lease at about 69 years or less remaining. As a young person, if I want to stay in the house for the next 30 years, I better not buy a HDB flat that has less than 65-70 years lease. It will be very difficult to sell the flat at that time and the property price will depreciate greatly as well.

What about the Selective En bloc Redevelopment Scheme (Sers)?

Most people are still willing to pay a high price for a low lease flat because of the hope that their old flats will be redeveloped under the SERS scheme. If you're hoping your old flat will go under this scheme, it is timely to take note that it may not happen.

Since the Sers was launched in 1995, only 4% of HDB flats have been identified for Sers and the government will continue to maintain the strict selection criteria for blocks eligible for Sers. This is reiterated by Minister Lawrence Wong in his blog post in March 2017. You can read it here.

Which HDB flat should a young couple buy?

With all the above information, as a guide, a 30 year old couple should consider a HDB flat with more than 65-70 years remaining lease. This would ensure we do not meet into problems at later stages of our life.

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Thursday, June 22, 2017

Gold Coast, Brisbane, Sunshine Coast and Noosa - Day 2 & 3

Day 2 and Day 3 in Australia

Read more on day 1 and planning tips for my Australia trip here.

Day 2

For day 2, it was whale watching in the morning and sea world in the afternoon. We cooked some simple breakfast before going to the ferry terminal for the whale watching cruise at 9am. 

Out to the sea

Spotted some whales from afar

The whale sprouting water
We did see the whales after some 4 hours out in the ocean. Not a very good experience as most people were sea sick including me even though we took the sea sick pills before the cruise. The cruise was with the spirit of Gold coast whale watching. Their staff were friendly and often asked us if we're feeling ok. 

I took a video and indeed there's probably 2 whales which we can see from afar:

After the cruise ended, it was already about 2pm. We were hungry so we went to a popular place called Peter's fish market for lunch. The fish here is really fresh although portion is quite small. 

By the time we finish lunch, it was already about 3pm so we quickly went to sea world which will close at 5pm. It was quite rush as the whale watching cruise ended too late. It was suppose to finish around 1230pm but dragged to 2pm because we were out at sea searching for the whales for quite long. I guess it really depends on luck for this kind of cruise. 

Sea world was quite interesting. We didn't have time for any of the rides so its just looking at the animals. They have dolphins, stingrays, polar bears, sharks, penguins, seals etc. 

Baby penguins


The brown one is actually a baby penguin just born. Looks so big

Sea world closes at 5pm so its another early night. Most attractions and shops there closes early so there's nothing much to do in the evening. Its good actually as we can have more rest throughout the trip. 

Dinner was cooked in the apartment again. This time, we had spaghetti with a whole chicken bought from the supermarket

Some tips on the whale watching cruise and the theme park tickets

Before the trip, I already pre-purchased the tickets for the attractions. Whale watching cruise is quite expensive in Gold coast costing $99 per person. I bought it at $44 per person through Groupon Australia. For sea world, I bought a 3 park pass from https://www.experienceoz.com.au/en/. This site has many discounted tickets for attractions in Australia and New Zealand. Do check it out if you're going to any of these countries. 

Day 3

Continuing on day 3, we went to harbour town and movie world plus the beachfront night market in the evening. The beachfront night market is only open on Wednesdays and Weekends from 4pm to 9pm. 

Harbour town is a popular outlet shopping area with many discounts on big brands such as Adidas, Nike and many more. Its very big, similar to the Johor premium outlet place in Malaysia. 

For lunch, we went to this Japanese Ramen shop which sells delicious Ramen. I personally think its better than most Ramen shops in Singapore. Its called Kabachi-Ya and its located very near to harbourtown. The price is reasonable too at just about $10 nett per bowl. I realised all Australia restaurants do not charge GST or service charge so that makes a big difference. 

After lunch, its time for movie world. Actually most of the theme parks are probably more for kids and not very big. You probably can finish in half a day. Movie world is quite small as well. I think we were done in about 2 hours plus. 

Batman came to the rescue

Spotted batman in Movie World

Scooby doo ride. One of the shows I always watch when I was young

Hollywood stunt driver show

Wild wild west town

The superman ride. Unfortunately it was close that day

Movie world has many familiar characters we know such as superman, batman, looney toons etc. Its all under the Warner Brothers brand. I took the scooby doo ride which is a indoor roller coaster. It was quite scary as its all in the dark and we plunge down without any warning. I also took the road runner 4D ride which wasn't really exciting. Last year when I went to HK disneyland, there was a similiar Disney 4D ride and it was much better than this. 

We were planning to go to the beachfront night markets in the evening but it was too cold to walk. We were there about 8pm. The temperature was probably below 15 degrees and the wind was so strong as its right beside the ocean. In the end, we just bought some Kebabs from the popular Shiraz Moderna. You should give it a try if you're there. Its quite tasty.

That's the end of Day 3
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Monday, June 19, 2017

8 days in Australia [Gold Coast, Brisbane, Sunshine Coast and Noosa] - Planning tips and Day 1

Planning a holiday to a foreign country is not so straightforward especially if its your first time there. I just came back from a trip to Australia, the first for my family stepping into the country. Previously, our holidays were just centred around Asia so going to Australia was quite an eye opener in terms of the culture etc.

One of my relatives asked if we were interested to go to Gold Coast and after checking the flight tickets, we booked it immediately after seeing a good offer from Scoot which was on a 50% sale. In fact, we actually were considering going there last December joining a tour group but didn't go in the end. So, going there was sort of on our minds already.

Scooting to Gold Coast

Scoot has fantastic offers going to Gold Coast. Its a 7 hours plus flight and they only fly at night around 10pm plus so we had to try to sleep on the plane. I took a Scoot midnight flight to Taiwan many years back and was so tired when I landed as I just couldn't get enough sleep. The flight to Taiwan is only 4 hours plus so it was quite impossible to get some sleep. This time, on a 7 hours plus flight, I thought I could get more sleep but was still quite tired after landing. Besides the sleep, Scoot has pretty comfortable seats on their new dream-liner with enough leg space. I could stretch my legs all the way to the front without a problem. Their normal seats do not have headrest so its important to prepare your own neck pillow etc. I brought neck pillow, eye mask and also a back rest. It brought much more comfort for the flight.

Planning for the Gold Coast Trip

Before I go into the trip itself, I think the planning info would be good for readers who want to travel to this destination. As usual, for a free and easy trip, I start by googling to see how others plan their trip but was surprised on the lack of info I could find. As compared to destinations like Taiwan and Hong Kong, this was much harder to plan because I couldn't get the full picture from the resources I find online. I had to search from different sites to piece the info together.

Furthermore, most people only stop at the gold coast area for their holidays which really just 4 days there is enough. I booked my flight for 8 days so I had to venture out further. With that, I added in Brisbane, Sunshine Coast and Noosa heads into my itinerary. Besides the usual attractions in Gold coast such as visiting surfers paradise, Sea World, Movie World etc, we went to glass house mountains, farm stay and whale watching. It was partially a road trip where the furthest was about 3 hours drive away from Gold Coast.

Here's my itinerary:

Day 1
Currumbin Wildlife Sanctuary

Day 2
Whale Watching and Sea World

Day 3
Surfers Paradise, Harbour Town, Movie World, Beachfront night markets

Day 4
Mount Tamborine and Brisbane

Day 5
Brisbane, glass house mountains and Farm stay

Day 6
Farm stay, Eumundi Farmer's market, Noosa Heads

Day 7
Farm Stay and back to Gold coast

Day 8
Return to Singapore

Renting a Car in Gold Coast

With so many places to venture out to, it is inevitable that we had to rent a car. It took me quite awhile to find a good car rental company because there are just so many in Australia. Also, we wanted to cover the excess portion which is the amount you have to pay should there be any accident. Most car rental companies start with $3500 excess and for me, I covered all the way until zero excess. The car rental price turned out to be only AUD$175 for 7 days in total because they had a promotion which I realised at a later date. They were kind enough to give me the rate. Oh yes, forgot to mention the car rental company is Apex car rentals. You can refer to their website here.

This car rental company is located near to the airport. They have shuttle bus service just outside the airport to bring us to their office so its quite convenient. Just need to use a public phone in the airport and call their toll free hotline. Its only a less than 5 minutes ride to their office. We rented a Hyundai Elantra which was a mid size sedan. It comfortably seats 4 people and I personally think the car is quite good even when I was driving on gravel road and also on the expressway at 110kmh.

Driving and Parking in Australia

Another concern I had was driving in Australia. Where to park? What are the traffic rules? After the experience driving there, I would say its largely the same as driving in Singapore. Some differences I realised is they have many roundabouts and they also have this slip road on the right. In SG, our slip road is on the left so it was a bit confusing.

For the whole trip, parking was all free. They have many free road side parking with limited time. I did research on all the parking signs and here are a few of the most common ones:

If you see 1P, its means you can only park at this area for 1 hour in the time stated on the sign. In this case, its 9am to 5pm from Mon-Sat. The Meter word below the 1P means that you need to pay for parking in this area but it is still limited to 1 hour. Outside the time and day stipulated on the sign, parking is free.

If you see 2P, it means you can only park at this area for 2 hours. This 2P does not have the Meter word below so its free for 2 hours in the stipulated time and day. Outside of these hours, its free for unlimited time.

There are other Ps such as 3P, 1/2P and even 1/4P. Just follow the signs and know how long you can park there. Every parking lot is fitted with a sensor so they will know how long you park there. For meter parking, there will be a meter box for parking payment near to the parking lots. Its not too difficult to spot.

One last thing is if there are no parking signs and there is no yellow line, parking is essentially free. You'll see other cars parked along the roadside as well so I guess it'll be safe to follow as long as we don't block other road users. I didn't pay a single cent for parking while driving in Australia so its really convenient.

For Brisbane, parking is hard so we walked instead. We also took the free city hopper which is their ferry service to get to some of the most popular places in Brisbane.

Petrol in Australia

When I was there, petrol prices were really cheap for the first few days. It was only $1.11 per litre for unleaded 91. It then went up to $1.41 for the last few days of my trip. All together, I spent about $80 for petrol for the 7 days trip. There are many petrol stations around Australia so its not difficult to find one. If you want to compare prices, you can refer to the website here.

Day 1

We arrived at Gold Coast airport at around 7am plus which was Singapore 5am plus. Not all planes fly to Gold coast airport so taking Scoot was quite convenient. I realised people in the past fly to Brisbane and drive 1 hour down to visit Gold Coast. Now from the airport to the main beach only takes less than 30 minutes. Something to take note is Australia is quite strict on bringing food in and they use dogs to detect any food which tourists bring in. We still brought some instant noodles which went undetected so I guess its ok to bring in.
Coming down from the plane at Gold Coast airport
We proceeded to collect the rental car from Apex car rental where they provide free shuttle service at the airport itself. It was only a 5 minutes ride to their office. After collecting the car, we went to have breakfast at this beautiful surf club called Currumbin Beach Vikings Surf Life Saving Club. This place was just next to the beach so the atmosphere was very nice.

The cafe overlooking the beach
The food was excellent there. The breakfast set was quite big and we only ordered 2 sets for 4 people. Anyway, most of the food portion in Australia is quite big even though its expensive.

After breakfast, we proceeded to Currumbin wildlife sanctuary. Here, you can see Kangaroos, Koalas and many other animals. There's an area where you can interact with the Kangaroos and take photo with the Koalas too.

Sheep shearing show

Koalas all sleeping

The place is quite big and it took us about 2 hours inside. For the tickets, the usual price is $49.95 but we got it at Groupon Australia for $21 each. Quite a good deal from Groupon. If you're considering visiting Australia, definitely can check out Groupon Australia for some good deals.

For lunch, I discovered this place called thrower's fish and chips. There wasn't anyone when we went there but I can say the fish and chips were good and really big portion. We ordered the family pack which consist of 4 pieces of fish, 4 scallops, 6 prawn pieces and $4 worth of chips (fries). When they say $4 worth of chips, its like one big box of it. We couldn't finish it at all. Looks like Australians really like to eat fries and lots of it.

Now, time to check into the apartment. For the 3 days stay in Gold Coast, we booked an apartment with 2 bedrooms, 2 bathrooms and a kitchen with living room at Narrowneck Court Holiday apartments. It cost about $150 per night. The location is about 5 minutes drive and 15 minutes walk to Surfers paradise so its quite convenient.

The best thing about this apartment is all the rooms face the sea even the living room and kitchen. Its just 5 minutes walk down to the beach.

Before we checked into the apartment, we also went to buy groceries to cook dinner at night in the apartment. In Australia, there are a few main supermarket mainly Aldi, Coles, Woolsworth and IGA. Aldi stuffs are really cheap but there's not a lot of choice to choose from. Coles and Woolsworth are the next best choices.

That's the end of day 1. Next up is day 2 for whale watching and sea world.

More on this trip:
Day 2 and 3

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