why we chose to rent

a friend was lamenting abt how some american guy who bought his home last year is making her all jittery abt making her property purchase decision

".....for some time now we have been reading up on the US sub-prime housing loans which came to the very much expected crash last week..now some of my colleagues (boy was i surprised a lot of these science teachers have been tuning in to the world of $ ) started talking to me about another possible downturn in the economy, exposure of our economy to the US, MAS chekcing on local banks on exposure to CODs..the interest rate in singapore, singapore dollars pegged to cant remember what and baskets of goods..

acck..now i wish i had done the minor in business in my last year in uni..coz i cant remember that much of my econs..

we were fine and confident coz we have worked out our sums and will be getting a relatively small and comfortable amount of loan so that our mortgage will be nicely paid off by cpf only. so we will be meeting the lawyers today but now i have a sinking feeling and a big question mark on how the american with a bad credit rating who bought his house on a sub-prime rate will affect our purchase.

so the science teachers are advising me to hold?
hold or let go n buy a new one?....."

Since i AM a bizad grad i shall put in my 2cents worth..ehem.. :P

All things being equal spore's economy's supposed to be on a high for the next few years. we're gona hv f1 next year, a sure boost to the economy. and we have the marina ir ready by 2009? n the sentosa ir ready the yr after that? so all these are supposed to be money spinners for the economy, hence the rosy picture.

We've been doing a lot of house-hunting ourselves...partly cos we were worried abt the rising property prices. we figured it's gonna go up n up for the next few years, so better buy now when the price is high, rather than later when the price is higher. but the ridiculously high cov is putting us off. we're NOT gonna be spending so much money ABOVE valuation for a place just becos the property market’s super hot right now. what’s gonna happen when the market comes crashing down? Which will happen one day eventually cos these things go through a cycle, no? we’d be paying through our teeth then for something that’s gonna be worth two-thirds of what it was?

So our house-hunting has sorta cooled down now. nothing to do with the us mortgage crisis, just our unwillingness to fork out so much money

But the US mortgage crisis is scary eh. we’ve always lulled ourselves into thinking that we’ve decoupled our economy from the US, after the unfortunate incident of the asian financial crisis. But the reality is that we’re still as linked to the US economy as we were back then. And even though the issue is as remote as it could ever be – whoever thought that a company’s unwise decisions to give mortgage loans to those who are not credit-worthy would affect us millions of miles away! – we’re feeling the repercussions now.

Which brings me to my main point: rent

Attended a workshop last week and the trainer was telling us that it’s very bewildering how everyone’s rushing to buy a home the moment they got married. And that before they even knew it, they’d be ‘upgrading’ to a bigger flat. A few years down the road, upgrade again to maybe a condo, then again to landed property after that. Owning a piece property seems to be our endless pre-occupation – the bigger the better. and may I just add – the more expensive, the more mired in debt we’ll be? Sounds pessimistic, but it’s true. How many of us truly have the means to own our home? There’ll be those lucky souls who’d pay off their homes with cash in hand. But the rest of us have no choice but to finance our home with a loan, and the loans will just add up after every ‘upgrading’ exercise. The end result: living in debt for the rest of our lives.

Which is why we’ve chosen to rent our first home. Some of the older folks, and even a few of the younger ones, have questioned the sensibility of our decision. After all, rental eats away at your disposable income, and you’d end up having less money to spend on other essentials like food, bills and such. BUT, renting our home also means that our CPF has not been depleted as yet, and could be made to work even harder than the measly returns that we’re getting at the moment (that is, if you invest yr cpf monies).

Plus purchasing a piece of property is such a grown-up thing to do isnt it, and we're just not ready to be grown up as yet. And stop sniggering there...we know we're both no longer in our 20s, but we still feel young yah :P

We will of course eventually make our first property purchase, InsyaAllah. The lease to our current place expires in 2 years' time, and we've already been told that there'll be no chance of renewing it cos the govt's taking it back (though we never take NO for an answer, so we're still hopeful..hehhe). There's still time till then to make the purchase.