Paying rent in the interim makes sense for would-be first time home buyers

TRADITIONALLY, many young adult Singaporeans lived with their parents until marriage. But more people may now be flying the coop and renting a place away from one’s parents. The PropertyGuru Singapore Consumer Sentiment Study for the second half of 2022 found that 66 per cent of Singaporeans between the ages of 22 to 29 chose to rent instead of buy a home due to the lack of savings. 

Is renting a home an irrational choice, as monies paid in rent are being used to fund the retirement needs of landlords or generate profits for investors in co-living spaces? 

Over a decade back, I was working in Hong Kong. I was a few months into my job then when my wife, who was visiting me from Singapore, got me over the line in buying a small flat there. Reason for purchase being that the rental income I was paying could be better used to service mortgage repayments for an asset which can grow in value. I have since sold my flat in Hong Kong for a gain.