SABANA SHARI'AH COMPLIANT REIT

Just applied for this reit.

Liu Wei: Armless Pianist

While you are digging your nose and reading my blog, listen to this:

Out of difficulties create miracles.

Now stop complaining about life. Not when Liu Wei isn't.

Everyone should know everyone's pay!

According to columnist Matthew Lynn, everyone should be open about their pay.

1) Everyone will benefit because we aren't sure if we are fairly paid unless we know what our colleagues and bosses are getting. Our bosses can easily hookwink us because we don't have enough information. Knowing everyone's pay will allow us to seal a better salary package.

2) We tend to feel insecure of our earnings if we do not know how much others are making. We are likely to assume that they earn more than us and feel lousy about it. Truth is, you are probably above average and your self esteem will improve upon knowing your commercial value.

3) It will make us financially responsible. How many times have people bought LV, BMW, Patek Philippe, condominiums on credit without being able to afford it? This is because people don't really know how much you earn and thus some people buy more than they can afford to create an illusion of being highly paid and successful. If everyone knows how much you earn, you don't need to buy anything to create any illusions. Everyone will be humbled and purchase goods that match their income (since it is no secret).

Thus disclosing one's income may be embarrassing in the short run but beneficial for all in the long run. How much do I have and earn? It's all in my blog! Now tell me yours....

Number 1 search result!

Every time you search "Singapore Blue Chips", you will definitely have my website as one of the top search results.

Google

Yahoo

Rednano

My google page rank has a decent value of 3. For a non profit personal blog, I think that's a little achievement! Yeah!

A Visit To Esparina Residences

I was driving near Sengkang and decide to pop by the new EC, Esparina Residences. The prices were extremely competitive!

As more than 90% were sold, only 2 bedroom units were left. This is a peculiar phenomenon as usually 2 bedroom units were the 1st the be snapped up in any new launches. As this development is an EC, the main barrier is $10,000 household income. I was interested in a 3rd floor 2 bedroom unit.

The prices were really reasonable. A 2 bedroom 829 sq ft unit, morning sun with blocked afternoon sun and facing a garden, it costs $617k before CPF grant of $30k.

TOP is expected to be in 1st quarter 2014. PSF price works out to be $744.

I believe this is a good buy, stay invest unit for a couple of reasons.

1) 5 mins to Buangkok MRT

2) Low financing rates

Based on 20% downpayment (5% cash 15% CPF), loan amount required is $493,600

Monthly installment before TOP is in the range of $157-$659.

Interest rates are assumed to be 1.05%, 80% financing and 40 years loan tenure.

Upon TOP, monthly installment of $1023; after one year certified statutory completion (CSC), $1259

3) Good Investment potential

If one would want to take the chance to rent out the unit upon TOP (illegally), the expected rental is $2k (minimum) after taking into account the $180 monthly maintenance.

That works out to be a 4% yield based on purchase price. The leverage of 5x will mean yield to be 20% based on 20% downpayment.

Even if one stays for 5 years and sell in 2019, the expected price based on The Quartz selling price now is projected roughly to fetch about $750k-$800k, conservatively.

One can earn at least $130k in 10 years time, or an annually compounded return of more than 10% based on my downpayment!

4) Walking distance to 24 hours fair price and Kopitiam. All amenities has been set up, critical mass attained. More amenities will be available.

5) Land parcel near Esparina Residences is up for tender to private development. This would further support its price in the medium term.

Alas! If only I am eligible....

Property Bubble?

It's quite worrying when almost everyone I know starts buying property for investments. Table 1 shows the pipeline of project due, extracted from URA.

Table 1

We are expecting 2,000 odd units to be completed by end of 2010. Supply will still be low in the region of 6,000 completed units in 2011. However, in 2012 there will almost be a 50% increase to 9,000 odd units, followed by a YOY 100% increase of completed units in 2013.

This is almost a 300% increase as compared to 2011!

In 2014, 15,000 units are expected to complete, which adds to the glut of supply. Should interest rate rise to 3.5% then, the influx of supply will lead to further rental depression due to high cost of funding. Investors will be selling cheap when their rental yield cannot cover the interest rate they are paying to banks.

The average net rental yield is about 3% now. I believe we will be seeing a downtrend of rental yield from 2011 onwards together with a apike in local interest rates.

Perhaps one should buy a HDB now and wait for fire sale in 2015.

I might be wrong though.

Highest Fixed Deposit Rates in Singapore

Just realised that local banks fixed deposit rates are really crazily low. Effective interest rates after all those interest on interest, free vouchers and loyalty bonus gimmicks never breach 1% PA.

But wait, check this out..

Not some Ponzi scheme but fresh rates given by ICIC bank. BUT, they only have one pathetic branch at Raffles Quay. Still not a bad deal for most people!

Their Aussie rates, my favourite currency is as follows:

No link to their websites as this is not an advert.