We S’poreans buy rather than rent reasoning as follows.
We can use our CPF.
And if we rent, odds there is a gd chance that housing costs may turn against us; they may e.g. go up, leaving us without a good, affordable home. By buying early, we are hedged against movements in the housing market. If prices rise sharply, then household wealth increases, enabling us to remain in the market. If it falls, the household has lost wealth—but housing is now cheaper.
The second point is also the view globally except in places like France, Germany and Switzerland. Here people prefer to rent.
But there is a minority view that argues housing is a bad investment, because it exposes households to big long-term debt and is undiversified. The risk reward ratio is not correct.
So far (in S’pore) history is on the side of the buyers. But past performance is no guarantee that it will be repeated.
So SDP, Tan Kin Lian: what about advocating that HDB rents properties for shorter periods at “fair prices”, rather than selling them out for 99 years? The latter is after all only a long-term lease.
“We can use our CPF.”
An artificial constraint which inflates prices.
“By buying early, we are hedged against movements in the housing market.”
Only applicable if you intend to buy multiple properties. Not too many will.
@renting:
Renting is popular overseas because it is cheaper than a mortgage. Not so in Sg.
The argument for renting vs ownership is basically that it is possible to obtain higher returns by investing the saved monies in higher-growth assets like stocks.
This isn’t the case in Sg because of:
1) low incomes.
2) high rents geared towards expat incomes.