Underpriced properties in Singapore.... only before 2020

I've been watching and reading alot about people exhorting how the stock market is better place to park your money compared to property. Well... all I can say is, I have more respect for those channel owners who have been advocating this for at least the last 3-5 years than the ones who just started their channel in the last 3-5 months. 

But I agree that entering the market in the last 2 years for rental income does not make sense anymore. I keep going around this topic because I used to think (10 years ago) that property is a good hedge against inflation and rental yield even at 2% is decent yield because property prices in landscarce Singapore will continue to move upwards anyway.

Above are the rental prices of a district 15 freehold apartment in Singapore. $660k in 2006, $1mil in 2010 and now is worth around $1.7mil. I got Chatgpt to help me run the numbers for the owners to purchase the back in 2006 under the rules then:

🏠 Scenario

• Property price: S$660,000 (private property).

• Year: 2006.

• Available upfront: S$85,000.

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1. Downpayment (2006 rules, bank loan, 90% LTV)

• 10% downpayment = S$66,000.

  • Must have at least 5% cash = S$33,000.

  • Remaining 5% can be CPF = S$33,000.

• You have S$50k cash + S$35k CPF → ✅ covers this easily.

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2. Stamp Duty & Fees

• Buyer’s Stamp Duty (BSD) on S$660k = ~S$14,400.

• Legal, valuation, misc. = ~S$2–3k.

• Total extra upfront = ~S$16,500–17,000.

• These can be paid using cash or CPF (BSD payable by CPF OA allowed).

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3. Total upfront needed

• Downpayment = S$66,000.

• BSD & fees = ~S$16,500.

• Grand total ≈ S$82,500.

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4. Your funds

• Available = S$85,000.

• Requirement ≈ S$82,500.

• ✅ You’d have a small surplus (~S$2–3k).

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5. Loan

• 90% × S$660k = S$594,000.

• At ~3.5% floating (2006 levels), 30 years → monthly repayment ≈ S$2,700–2,900.

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✅ Conclusion:
With S$50k cash + S$35k CPF, yes — in 2006 you could have bought a S$660k private property, since you’d just clear both the downpayment and stamp duty requirements.

Imagine this, assuming you invested with just S$50k in cash and rent out the property to cover the loan since 2006, one would have made a simple capital gain of S$1mil (20x invested amount) vs maybe 6-7x invested in S&P500. On top of that, the loan would only have only around S$250k remaining (assuming 3.5% interest rate throughout on a 30-year loan ).

In another 10 years when the mortgage is fully paid up, the property will be paying out $50k rental yield per year on S$50k spent 20 years ago. 

But today with the new MAS rules in place, it is a very different climate for property investment:

One will need more cash for a S$660k property. Not to mention there's no viable S$660k property today.... (or maybe yes?). For a S$1mil property one will need to fork out around S$280k in cash/CPF. 

I'm glad I'm not just starting out on my career in this post-Covid world with crazy property prices and rules~

On another note, bookmarking a blog that I came about recently on property investment in Singapore:

https://www.propertysoul.com/

Apparently this is the same blog that introduced the 3-3-5 rule before CPF did.