Is Singapore a good place to retire to?

This is a question, and my answer for non-Singapore citizens (or residents) considering retiring to Singapore.

The short answer is: No.

CPF HDB PAP - How Using CPF "money" to buy Homes is Addictive and Wrong

[Drafted Feb 2024]

Convenient Lies, Inconvenient Truths: Opinions Regarding Sensitive Issues - C.L.I.T.O.R.S.I.

It is not the policies you disagree with that are evidence that you are being controlled. It is the policies and practices you embrace wholeheartedly. And love!

So... property prices are rising and people are complaining and so the govt should listen to these people, and do something to lower property prices, right?

Sorry to disappoint you but, no.

Ok, you say. Maybe not ALL property prices, but million dollar HDB flats doesn't make sense right? The govt should at least control the prices of HDB flats right? Especially resale flats right?

No. 

HDB has build around 1 million flats and sold these flats to Singaporeans. HOWEVER, there are people who are thinking of buying a flat and they are facing high prices. Let's say there are 50,000 of these people - young couples looking for their first home. If the govt makes policy that limits the price of resale flats, 1 million home owners and their families will be made poorer. But 50,000 new home buyers will be happier. What do you think will happen at the next election?

Why Tharman is standing for Election as President of Singapore

 

1) If he wins, he will move into the Istana... A government Bungalow. 

2) As President, he will stay there... Rent-free!

3) The other two Indian Ministers have to pay rent for the Government Bungalows at Ridout Road.

Lease Decay Solutions (HDB 99 year lease problem solved!)

The Lease Decay issue is the problem of HDB flat owners in flats built more than 40 years ago, and now face falling prices for their flats.

As the original lease on their flat is 99-years, after 40 years or more, there is less than 60 years of lease on the flat and with the short lease there are constraints on buyers to get mortgages and to use their CPF to pay for the flat.

First, at less than 35 years of lease left when banks are unwilling to extend loans to finance their purchase. That applies to flats that are at least 64 years old.
Second, at under 30 years' lease remaining when CPF money cannot be used for down payment or to service the monthly mortgage (flats that are 69 years old). And third, when leases go under 20 years (flats that are 79 years old).
"When leases drop to 20 years and below, the prospective buyers will not be able to get HDB loans, bank loans or use CPF for the purchase. Everything has to be paid in cash in one go," Mr Ku noted.
The amount of CPF money that can be used to finance the flat purchase is also lower for units with a remaining lease of at least 30 but under 60 years.

So that in a nutshell, is the lease decay issue. How does the government intend to solve it?

Here are some solutions. First, let's look at what the government has suggested (PM Lee at NDR 2018):

VERS vs SERS

The details for VERS has not been announced. They will announce it closer to its implementation. That is, in about 20 years time.

For SERS, flat owners will be given compensation for their flat, and given priority to choose a replacement flat if that is what they want. There is also something like a "moving and renovation grant".

We will keep this comparison simple and just focus on the compensation for the flat, and what that will costs the government for SERS, and project or speculate what it might be for VERS.

Thoughts on the NDR 2018

I had my wish list for the NDR.

China-US Trade War

For the US-China trade war, one potential PM-to-be had spoken about it. But he was speaking at the American Chamber of Commerce, and his message was for the Americans:

"Your choice of where you put your investment, your choice of where you make those strategic moves for your company, will cumulatively build up a picture of what the US stands for in this region… The choice you will make individually will collectively inform Washington where their priorities will be."

There was no message for Singaporeans.

The better message was from Bilahari Kausikan.  But his message was more on the idea of a Singaporean identity, and the Singapore Reality resisting the imposition of the Chinese (China) framework and identity on Singapore:

HIP 2 is not hip and not a real option.

First reaction to the NDR 2018.

Home Improvement Programme 2 is supposed to work hand in hand with VERS. At that time, owners of 70+ year old flats will be offered 3 options.

1) HIP 2. This will cost money. For a flat with "decaying" value. You will also suffer the inconvenience of improvement works.
2) Voluntary Early Redevelopment Scheme (VERS). This will give owners some benefits.
3) Do nothing, and run out the lease. No costs. No benefit.

Option 1 is to "motivate" owners to choose VERS (option 2).

So faced with the three options, what would you choose? 

Option 1? 

I don't think so.

Lease Decay Issue - One Obvious Answer. One Easy Solution

If you have not heard about the Lease Decay issue, here is a brief summary.

HDB flats are on 99-year lease. That means that when you buy a HDB flat, you "own" the flat for 99 years. At the end of the lease, the land reverts to the state, and your flat has no value.

[Here is an excellent and clear explanation of what it means to own a freehold property, and own a leasehold property. HDB owners own a lease. That imbues the HDB flat owner with certain rights that a renter/lodger does not. But because it is a lease, there is a definite period to the end of the ownership.]

This is not a problem for the original buyers. Assuming they bought the new flat at age 25, by the time the lease runs out they would be about 124 years old.

Most likely dead.

The lease decay issue was highlighted because there were many couples buying old flats with short remainder of leases left.

Four 3-Letter things you are doing wrong (Life in Singapore)

Ok, firstly I want to say that the title is "inspired" by a whole bunch of websites with "Listicles". These are articles with titles like "Five things that you..." or "Seven things about..." or "9 things you should know about..."

(To be honest, I didn't outline this post, realise I had found 5 things Singaporeans do wrong, and the started writing.

I just thought "5 things" sounded about right. Wrote down the title. Then panicked when I couldn't think of a fifth thing. So this is FOUR things you are doing wrong in Singapore.)

Recently, I saw this "rebuttal" of "The Life Cycle of a Singaporean (Male)"

I don't disagree with everything, but there were some things I DEFINITELY disagreed with. I thought the person who wrote the summary of "Every Singaporean's Life" (which excludes women - what does that say about the Singaporean male's attitude?) had a rather limited perspective (I think he's just young.)

His main complaints are about weddings, housing, and retirement. Which I was already going to write about how Singaporeans tend to do that wrongly.

Beyond SERS - The Decaying Lease Issue

Singapore's 99-year lease HDB flats are a ticking time bomb, politically. 

But the bomb will not go off for another 50 years or so, when the first 7% of flats (about 70,000 flats if there are about 1 million flats) reached the end of their lease, if nothing is done, and the flat owners will have to surrender their flat with NO COMPENSATION.

Which would be political suicide.

Some "common sense" suggests that "technically, the government should pay" to recover the land your flat is on. After all, even if your COE expires, when you scrap your vehicle, there is still some "compensation" for the scrap value. So shouldn't you get at least some scrap value for your home?

No?

No.  

Overheard: Singapore Claims Indonesian Islands

"Eh, Boss! I got another worried buyer. He was told by his friends that Funtasy Island is right in the middle of a serious piracy area. He wants to know about our security arrangements!"

"Another kan cheong spider ah? Aiyoh! Liddat how to do business?"

"What about our plan to get the Singapore Coast Guard or the Navy to increase patrols around the area?"

"We already spoke to MHA and MinDef, they say we are in Indonesian territory, so they cannot patrol in Indonesian waters. Something about sobriety. Really? Then don't drink on the job lah! Hai-yah!"

"I think they said 'sovereignty', not 'sobriety'. That means Indonesia will be a little sensitive about foreign vessels in their waters."

How to be less Kiasu and more entrepreneurial

So someone (NMP Kuik) has decided to take a shot at "Kiasuism". 

Entrepreneur Kuik Shiao-Yin, 39, said Singaporeans' fear of failure has led to a lack of originality in the local entrepreneurship scene.

She has only negative things to say about our national attribute of being kiasu, and how it foments mediocrity, selfishness, short-termism, and a toxic race. And it has curtailed our entreprenuership.

She asks that we stop the kiasu culture and our fear of scarcity.

Brilliant! Bravo!

Why HKers are not as crazy about cars as SGers

During one of my lunch conversation with my colleague, he noted that HKers are not as crazy about owning cars as SGers.

He suggested that perhaps it is because HK has a good MTR system and people find it very convenient to use public transport so they do not feel the need to own cars.

Alternatively, he also suggested that HKers spend more on getting their homes so they can't afford to get a car. Which may be true (see chart below).

From "Home Prices and Inequality" 

The Chart shows that HKers pay 17 times their household income to buy a home. Singaporeans just pay 5 times. Our median household income is higher and the median home price is lower in SG than in HK.

So that may be a factor.

#BuildSG2065

ST has this site for sharing ideas about what Singapore would be like in 50 years time - in 2065.

In other words, what would the Singapore To Be (Singapore 2B) be like?

Go take a look at the ideas of some Singaporeans.

To Be or Not to AirBnB

So URA is asking for feedback on short-term rental for residential properties as facilitated (and popularised) by apps like AirBnB.

Link to URA Feedback site (until 23 Feb 2015): http://www.ura.gov.sg/uol/Surveys/short-term-stay

I value my privacy and I would not let out my home or a room for visitors. But that's me.

I think if my neighbours want to and need to (for the money), I think they should be allowed to.

I do not anticipate a parade of visitors trooping through my neighbourhood if short-term rental (hotel room rental) were allowed. If HDB allows, then ALL HDB flats would be allowed, and if there is sufficient supply, the visitors would be spread out throughout Singapore. And each room or flat would only be occupied by these visitors once in a while.

Unless the HDB flat is iconic like the Pinnacle@Duxton.

I would stay there at least once. Just for the experience of living in a million dollar flat.

GUTS 1: Moving towards Singapore 2.0. Part 1 Singapore Today

The Grand Unified Theory of Singapore (GUTS) today 

and what We need to move to SG 2.0

Part 1

A Grand Unified Theory of Singapore (GUTS) is probably a little grandiose, and there is probably some hyperbole in that. But it got your attention, I hope.

In any case, this is just the first "Unified Theory" (working hypothesis) of Singapore.

The GUTS 0.1 is intended to explain the problems of Singapore today and what might need to be done to get to SG 2.0. Or maybe just GUTS 1.0.

In part 1, we do a brief stock-take of Singapore.

How I Learned to stop Worrying and love the Minimum Sum

The Fear of Death does not keep us from Dying. It only keeps us from Living.

The first time I went down a 3-storey water slide (the now defunct Big Splash*), I was very frightened halfway down and I was trying very hard to slow myself down. I pressed my legs against the sides to try to brake, to slow down, but it was too slippery. I just slid faster and faster until I hit the water.

"This is fun?" I asked myself, as I sat in waist-deep water collecting myself.

Things that make us Singaporean

A response (lighthearted) to What is a Singaporean by Kishore Mahbubani

From a post in Oct 2009.

A Singaporean is someone who drinks water from Malaysia, breathes (smoky) air from Indonesia, eats pork from Australia, chicken from Brazil, rice from Thailand, live in flats builit by Bangladeshi construction workers, cleaned by Sri Lankan and Indonesian maids, surf the internet on IT infrastructure maintained by Indian IT engineers, watch Korean dramas and American movies, listen to Canto-pop from Hong Kong, and whose children and elderly parents are cared for by Filipino or Myanmarese maids.

Cash, Flats and Valuation

HDB

COV

CPF

Letters you need to know (and understand) when you buy a resale flat.

On Monday, 10 Mar, Minister for National Development announced a new rule that would (hopefully) eradicate the scourge of Cash over Valuation (or COV) in resale HDB transactions.

A slower pace of life

Singaporeans are under stress.

The cost of living is rising. Wages of the lowest income have not risen as fast. Home prices are rocketing into unattainable heights, COE premiums are rising out of reach of all but the very wealthy. And the statistics show greater income inequality, with the rich getting richer and the poor, well, not getting richer.