The Case For Moving To Johor

I just realised the last time I wrote a post, it was at the beginning of the month. So much has changed since. In particular, we have reached our MOP and completed our moving plans to Malaysia.

It may not have come as a surprise to regular readers, because I had posted about geographical arbitrage here and here, and even wrote about opening a Malaysian bank account. So yes, much of the past month has been about laying the groundwork for making it happen. That involves looking at housing, transport, domestic help and education options.

Of these, there are two components that need to be considered. The first is the upfront capital required, which is a large lump sum for putting down deposits or other fees. The second is the monthly outlay, which equates to your preferred standard of living. Some expenses go entirely in the first category, such as foreigners looking to purchase a Malaysian car because we cannot take loans without a local guarantor.

In this article, I will share briefly about the second component, in which I think it shows that staying long-term in Johor is actually worthwhile financially. There are conditions of course, such as the flexibility for work to be outside the typical hours so as to avoid the jam or the ability to work from home, and that your child’s education is unaffected by such a change. We felt that we have satisfied the conditions on both counts and hence went ahead.

We considered various housing and education options, which are the two largest components in our expenditure pie. Given that we planned to sell our HDB after MOP and to rent out a purchased private property subsequently, that remains unaffected by whether we stay in Singapore or not. Hence it comes down to our rental or education cost:

The prices in the table are rough estimates and will also vary based on the exchange rate (which is weakening to almost 1SGD = 3.5RM recently and makes this all the more palatable), but to balance out against the hassle of moving to Malaysia, I have considered the upper bound options there against the lower bound options in Singapore. That means that any cost savings is likely to even higher in reality, and also not forgetting in the fact that I have yet to consider savings from other aspects such as petrol, food, etc.

Some other parameters:

• Renting in Singapore or Johor
• One kid currently in preschool

The table above offers a few interesting insights:

• The no-brainer answer is actually to move back with my dad as I no longer have to fork out anything to rent.
• The most expensive option (Bungalow + Marlborough College) comes up to a similar cost as the more affordable option (Preschool in SG + 2-room HDB) at around $4,900. Of course, one may argue that there are cheaper preschool options, but we don’t plan to change schools if we don’t have to leave.
• At the same time, it means that there are even more affordable options in Johor if preferred.
• The advantage in cost savings may go away once our child moves to primary school, because a primary school education in Singapore is virtually free as compared to International Schools, but perhaps the fairer comparison might be with International Schools in Singapore, which are even more expensive and less accessible to Singaporean children.

We eventually settled on a Semi-Detached + Marlborough College kind of option, which saves us at least $1k each month for now or about $12k a year, which means that choosing to relocate to Johor for just a year does not really make much of a difference. However, this is likely to add up in the long-term, which is what we are seriously considering.

In another article, I will share more about the upfront costs involves in uprooting from Singapore to Malaysia.