I have a friend's father who bought a landed property around Eunos area at $60,000 in the old days. Now the property is worth nearly $2 million after 50 years passed, which means my friend will get an inheritance worth $2 million or more in future.
For me, I bought a 4 room flat in 2007 at $180,000. Then I got a 5 room flat in 2013 at $510,000. Property prices have soared so much over a short 6 years, though we won't be expecting an increase for the moment with the many cooling measures put in place by the government. I even heard the trend is CUV (cash under valuation, negative COV) now.
My husband's friend, who is a property agent, told us that we should not keep a house longer than 5 years. He said it's not worth paying for the full interest for 30 years. So my husband and I painted a scenario where we will upgrade and sell our house every 5 years. And for every transaction, we will have a profit of $50,000 (never put too high to be realistic and applicable for both HDB flats and EC). Pretend we have another six 5 years before we downgrade our house to get a smaller flat for two of us, we would have a profit of $200,000. So it will be $100,000 each after sharing.
So with my property profit of $100,000, if I retire at 65, and if I want to have $1500* every month, and if I live for another 20 years, I would need another $260,000 to retire. Imagine if I use normal savings with 1% interest per annum, I will need to save around $715 per month for 30 years. I won't count the CPF monthly output as the amount will be too small, so the CPF output will act like a mini bonus instead.
One thing we have to be mindful when investing property is that we must be prepared for uncertain risks as there's always a possibility the property bubble will burst one day.
*Based on a projected minimum amount for future basic needs without any major health issues, anything less will be bread and butter everyday
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