So very often, repeatedly I hear people complaining about how expensive property is, or how expensive our cars are. It is true that our the ultimate quantum of our property is very expensive here, but so very often, people forgot to factor other things like interest rates, appreciation, education, child care, etc, which more accurately reflects the true cost of living.

For example, we may argue that in places like Thailand and Australia, property prices are really cheap. You can buy a sub-prime 1 bedroom condo in Sukhumvit for $100k, or a nice landed 5 bedroom in Perth for $400k. In comparison, a 5 room HDB flat in any district in Singapore will knock us off about $400k at least.

However, we tend to overlook that interest rates in other countries like Thailand easily hit 5% per annum, as compared to our sub 2% interest. That measly additional 2-3% interest will translate to an additional $300k over a 30 year period. If you couple with the fact that property prices are relatively not as stable as compared to Singapore, you are looking at negative gain over a 10-20 year period.

That means that in Singapore, we suffer a less chance of negative gain over 10-20 year period even if we take out a loan because of our low interest rate environment. Plus, we have no capital gains tax. That is amazing.

Having said that, it also means that if you buy a property overseas outright without loans, it will also make the most economic sense. Because the interest is pretty high. Over 30 years, 5% will cost you 3 houses. You will spend $900k on a $300k house for the entire 30 years. I find it hard to imagine a property appreciating 3 times its cost.

Food is extremely cheap in Singapore, perhaps just slightly more than Thailand. Dollar to dollar, we are perhaps even cheaper than Malaysia, especially when you consider the GDP difference of both countries. In Singapore, a nice plate of chicken rice will only set you back $3. Try looking for something like the western parts of the world.

Our cars are extremely expensive, no doubt. That’s possibly the only thing that costs so much. However, interestingly, our toll rates and parking is actually pretty cheap, as compared to other countries. Our fuel and COE are ridiculous though. It’s the single biggest ticket item for any Singaporean.

This also means that if you cast cars aside, the cost of living in Singapore is actually not very high, especially when you look at the fact that we almost never lose money off our HDB properties, have low interest rate environments, low taxes, have cheap and good food everywhere. I think that it is our monetary pursuit that makes us think that we have very little…. when we actually have a lot.

Photo from Facebook
Photo from Facebook

Quite often, a lot of my friends think that I make a lot of money. But the reality is that I don’t spend a lot; I am very careful with my money. I don’t buy big ticket items, I know of many places with free parking and I will walk for cheap parking. When I’m eating alone, I’ll go for $3.50 macaroni or $5 beef noodles, not because they are cheap, but because the cheap food is in fact more delicious than restaurant fare so very often.

There are tons of good and cheap things all over Singapore. It’s just that society has made us compare and compete with one another in the quest for material goods. We work endlessly day after day, forgetting the importance of setting time for our family, friends and loved ones, and indulge in things that sap our money away like hostess pubs and expensive holidays.

Over the years, I realized that we don’t need a lot to be happy. Money seldom buys us lasting happiness. To be happy is to experience the goodness of life, and find meaning in what we do. We cannot find meaning in things, nor in complaining about things.

Singapore is a great country with some silly things. Then again, which country doesn’t? We are bred as an impatient lot, but our forefathers have gave their lives to build a wonderful land for us and our children. You can buy a new HDB with $0 cash, get almost free education for primary/secondary kids, get tax-incentives and rebates for starting businesses, almost no corruption in our country, and you can walk around 3-5 am in the morning with hardly any danger to you.

The true cost, isn’t that high after all.

Tim Wong

Reproduced from Tim’s Facebook public post here.

Editor’s note:
1) It is false that a 5% interest rate on a $300K loan over 30 years will cost you $900K as Tim has claimed. See calculator below:

Mortgage Calculator
Mortgage Calculator

2) It is false that you could only buy housing at $0 cash because you can do likewise the same in Australia where they lend you the deposit in a separate loan.

3) Food and clothes in Australia is cheaper than Singapore when you compare supermarkets i.e. Sg NTUC with Australia’s Coles and K-Mart.

4) Salaries in Australia are more than two times higher on average for most jobs, especially for Minimum Wage jobs.

5) Another point to note is that retirement fund remains untouched in Australia and that it grows at 7% on average each year, as compared to Singapore, CPF funds are depleted for paying housing and grow at only 2.5%. This is why low interest rate is bad.

STR do not condone the spreading of lies on the internet, hence an editor’s note has been added to supplement the half-truths in the article.

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