Sell real estate now and buy later?

Discussion in 'Wealth Creation & Management' started by TreasureHunter, Oct 6, 2018.

  1. TreasureHunter

    TreasureHunter Well-Known Member

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    Hi,

    Following the real estate trends I asked myself the question: what happens to people who want to move to another country (buy & sell property)?

    I'm curious whether you think it's a good or bad idea to sell your house, land and buy another house/land in another city/country.

    The reason: moving, not investing. But obviously, it would also be an investment.
    It would take time 1-2 or even 12 months to finalize.

    Since the crisis might hit anytime (even mainstream media is shouting it loud): is it smart to turn your home into money and sit on the money for 6-12 months and then buy another house elsewhere?

    Provided that it will take months to buy a new house, your money will be sitting in the bank between the two (sell & buy) transactions.

    Would money get devalued or would house prices go down? Or both?

    Or money could stay the same and home prices could go up?


    SCENARIO 1:
    - you sell your house and after 2-3 months you can finalize the transaction in the other county
    - but crisis kicks in just after you sold your house and your money will be worth peanuts
    - you can then only buy a smaller house or just a pack of peanuts :(

    SCENARIO 2:
    - you do the same thing: you sell your house and months pass by... solving documents and finding the right house
    - for some reason house prices drop due to the crisis (because less people buy), but somehow currency doesn't get that much devalued
    - you'll find yourself having more than enough money and could even buy 2 houses!
    - you get rich :)

    SCENARIO 3:
    - you sell your house
    - deflation pushes the currency's cost higher (in your country)
    - but due to an inflated real estate bubble and many unsold houses, the prices of homes in the other country keep going down
    - you buy a house and have plenty of money left, but you wait, because obviously you want to gain more
    - ...home prices go further down
    - you buy 2 more houses
    - with 3 houses you're rich :)
    - live in one of them and rent the other two out :)

    SCENARIO 4:
    - you sell your house and currency crisis kicks in the next week (in your country)
    - money gets terribly devalued and keeps devaluing (e.g. hyperinflation), but the other country's currency keeps going up
    - exchange rates are terrible, you end up losing a lot, like 25-75 % of your money
    - you can only buy a small cabin :(

    SCENARIO 5:
    - you sell your house
    - no currency crisis, no economic crisis occurs
    - but the neighbouring country's economy is booming: real estate prices rise by 30 % and they impose high real estate prices
    - you don't have enough money, so you can only buy a smaller house
    - you end up with terrible loss :(

    What would you do if you'd have to move from one country to the other?
    (e.g. Singapore to Australia, Italy to Spain, Germany to Portugal, UK to Dubai etc.).

    How to avoid losing and how to gain instead?
     
  2. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    Capital gains if it was investment property?

    But if it was personal home selling and just despoiling into savings account will net you 5% (interest gain 2% per year and 3% or more saved in lost value)

    Singapore would be a good place to buy property since it lost 11% in the last three years and starting to pick up again.

    Few things to keep in mind...

    Sell within 4 years of buying and you pay additional 16% of the sale price in tax (everyone, locals and foreigners)
    Foreigners pay 15 per cent property tax (locals 5 to 7 percent)
    38% of residents of Singapore are foreigners, so any downturn in global market will see fast downturn in prices as expats leave.
     
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  3. SilverDJ

    SilverDJ Well-Known Member

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    Stop worrying about whether the economy or your currency is going to crash in short order (hint, it's almost certainly not going to).
    Just do what you want to do, live your life, and move were you want to move to. Most likely NONE of those scenarios is going to happen, as they are all pretty extreme and take time to play out if they are going to happen. It's just silly to try and guess that.

    Some things are more odds-on, like realestate in Sydney continuing to drop for example, as they are based on real trending data. All your scenarios are just based on speculative fear and emotion.
     
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  4. SilverDJ

    SilverDJ Well-Known Member

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    It costs them a lot of money in fees and relocation.

    You have the rent somewhere for 12 months, likely pay storage, and al lthe fees and charges in selling and buying a new property and relocating.
    All that expense is almost guaranteed to be more than and market movement you are worried about.

    Sometimes:
     
  5. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    I think it's going to be difficult to give a good advise because the real estate markets are not homogenous even within cities, let alone across a country or globally.

    Even in a small country (or rather city, yes, Singapore is smaller than Adelaide) the property market is divided into many segments, some doing much worst than others, although there are some bright spots (but they comprise less than 2% of overall the market). Overall, prices are either flat or going down.

    If you're coming to Singapore, it's going to be cheaper to rent (which the majority of expats do) since rent is often lower than mortgage interest. You can get a 3 bedroom apartment close to town for $3200 (Singapore dollars). The same apartment will cost more than $2 million to buy. Another option is to rent a bedroom with ensuite bathroom which costs around $1200 a month.
     
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  6. TreasureHunter

    TreasureHunter Well-Known Member

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    I forgot to mention: the hypothetical case that I presented would be about moving from a poorer country to a somewhat richer country.

    For example:

    Vietnam --> Thailand
    Philipines --> Taiwan
    Australia --> Japan
    China --> Singapore
    Greece --> Austria

    Basically, the difference of prices is 250 % higher. E.g.: sell a 4 bedroom house, buy a 2 bedroom house etc.
    Moving from a poorer country to a richer one
     
  7. SilverDJ

    SilverDJ Well-Known Member

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    Why the hell would you want to move from Australia to Japan?
     
  8. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    Australia --> Japan you are going backwards
     
  9. leo25

    leo25 Well-Known Member Silver Stacker

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    better women?
     
  10. tongkat

    tongkat Active Member Silver Stacker

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    If an economy or currency collapse is eminent (highly doubtful) better to ride it out in your current country of residence.

    Getting your residency status, visas and banking whatnot in order takes time and planning to say the least. Most countries aren’t going to let you simply slide in, buy a house and hang out.
     
  11. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    Not sure if more expensive home prices means richer country. For example, property prices in Bejing and Shanghai is much higher than similar ones in Sydney/Melbourne.

    After seeing the threads on Sydney property, I took a look at the prices in Sydney/Melbourne, they are much cheaper than what you can find in Singapore, of course, the Singapore market is more complex as it has a huge public housing market.

    Even that, it doesn't make sense because local wages in Australia are much higher than in Singapore (not including expats). Of course, tax is much higher in Australia but it goes into social security. In Singapore, the same amount goes into property, this is the reason why I think property prices in Singapore is unsustainable in the long run, and is artificially elevated not only by low mortgage rates, but also by having minimum social security.


     
  12. BiGs

    BiGs Active Member

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    Never bank on an unknown future event...

    Trust me, the media has been saying this for as long as I've been an adult with some investment money (about 12 years). I really doubt it started then either.

    Live your life and do what you have to do with living arrangements, but don't sell property solely on the whims of media conjecture. This is lunacy.
     
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  13. alor

    alor Well-Known Member Silver Stacker

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    well depends on your age group

    people who can not afford with the retirement balance will downgrade, eg Sell in Singapore and buy in Johor, mostly suitable for people who already are Malaysian there, since there is no need to spend another million (RM) to buy a property

    some younger people moved to Japan for some incentives usually go to work there, like nurses from Philippines working in Japan

    Economic Migrants moved from Africa to Europe to enjoy the non work benefits

    last time many years ago, there were plenty of China people moved to Singapore with their $sick millions bank balances, they got PRs
     
  14. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    Property prices falling is already a confirmed trend. The decision whether to sell will depend on one’s financial situation, risk appetite and whether renting is feasible/cheaper alternative.
     
  15. willrocks

    willrocks Well-Known Member Silver Stacker

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    Have you been to Japan? It's very clean, people are friendly. Overall I think it's better than Australia in many ways. But good luck getting citizenship, it's not easy.
     
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  16. leo25

    leo25 Well-Known Member Silver Stacker

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    The only bad thing about going to Japan was returning to Brisbane airport and feeling depressed and ashamed of our country. Japan sets the standards way to high.
     
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  17. willrocks

    willrocks Well-Known Member Silver Stacker

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    It really amazed me how much pride and respect their culture has. Rail employees bow to each carriage as they walk through the train. Many people were willing to help tourists. All the restaurants were clean and had a high standard of food. Japan has much higher standards than other asian country I've visited. Overall it is better than Australia in many ways. I would live there any day.
     
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  18. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    Obviously it would depend on what factors one looked at... but by salary, and gdp per capita he is going backwards.

    If we are measuring it by better quality sushi, transport running on time and politeness yeah Japan wins :)
     
  19. leo25

    leo25 Well-Known Member Silver Stacker

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    Yep that's what impressed me too. People there understand every role is important and everyone is respectful to each other. Most important they treat their elderly well and make them feel impotent in the economy. Also i loved that everywhere was clean as I'm OCD when it comes to cleanliness.
     
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  20. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    I think this really has to do with schooling.
    Kids are taught by BOTH the Parents and Teachers to respect their elders/peers and are taught manners

    In Australia BOTH the Parents and Teachers argue it is the OTHERS job to teach manners and respect.
     
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