View Full Version : Not Being Able to Afford a Home
http://blog.moneysmart.sg/opinion/singaporeans-share-worst-money-fears-pretty/
Telling someone property isn’t cheap in Singapore is like giving a blind man an iPad. But young Singaporeans coming of age in the 21st century are realising just how unaffordable housing has become.
While upgrading to a condo was the dream of the baby boomer generation, the prevailing sentiment amongst Singaporeans in their twenties and thirties is that condos are unaffordable that HDB flats still cost a bomb.
No matter what you think of news reports claiming that most Singaporean households can afford HDB flats, the sentiment on the ground remains that housing is a huge burden they’re not sure if they can shoulder.
Lionel, a 29-year-old civil servant, does not even aspire to own property anymore. “The financial burden of being tied to a 25- or 30-year mortgage is too limiting, and obviously there’s also the problem of having to be married before you can buy HDB property. At this point it doesn’t seem like a sacrifice I’ll be able to make anytime soon.”
Arnold, a 32-year-old entrepreneur who intends to get married next year, looks at his coming nuptials as a huge financial burden. “Our BTO flat is going to be ready in 4 years’ time, and I’m already dreading having to make the repayments. Since I am self-employed, I don’t have as much CPF savings as many other Singaporeans my age. Of course, I am worried I won’t be able to make my loan repayments. It looks like I won’t be taking any long holidays for many years to come.”
http://www.todayonline.com/sites/default/files/styles/photo_gallery_image_lightbox/public/16104992.JPG?itok=idm6MzgJ
http://www.todayonline.com/singapore/hdb-cuts-loan-tenure
SINGAPORE — To encourage financial prudence and mitigate an impending rise in interest rates, the Housing and Development Board (HDB) announced yesterday that it would cut, with immediate effect, the maximum loan tenure from 30 years to 25 years for its housing loans, and reduce the mortgage servicing ratio (MSR) limit from 35 per cent to 30 per cent of the borrower’s gross monthly salary.
And with effect from today, financial institutions will shorten the maximum tenure of their new housing loans and re-financing facilities from 35 years to 30 years.
The measures were announced yesterday by the HDB as part of a raft of housing initiatives — including details of the enhanced Special CPF Housing Grant that was announced during the National Day Rally and a pilot launch of multi-generation flats — that sought to achieve various outcomes such as improving affordability and encouraging extended families to live together or in close proximity.
Permanent resident (PR) households will now also have to wait three years after obtaining their PR status before they can buy a resale flat — a move that National Development Minister Khaw Boon Wan described as a “judgment call” to allow PRs to sink roots here and save up before buying a flat. Previously, PR households could buy resale HDB flats as soon as they acquired PR status.
The objective of the revised mortgage loan terms was to “ensure financial prudence in purchase of public housing and discourage over-consumption”, the HDB and the Ministry of National Development said in a joint press release. This comes after the Monetary Authority of Singapore introduced a Total Debt Servicing Ratio (TDSR) framework about two months ago to cap total debt obligations at not more than 60 per cent of an individual’s gross monthly income.
It was only in January that the authorities announced that the MSR limits for housing loans from banks and the HDB would be capped at 30 per cent and 35 per cent of a flat buyer’s gross monthly income, respectively. With yesterday’s announcement, the MSR limit for HDB loans will be the same as for bank loans.
Speaking to reporters at Toa Payoh HDB Hub, Mr Khaw reiterated that the changes were meant to align HDB loan policy with that of the banks.
Referring to the current “unrealistic and artificial” interest rates, he said: “People think they can buy a bigger flat or a condo, when we all know that over the lifetime of the mortgage, interest rates won’t stay that low and then what? Then there will be trouble.”
Engineer Michael Foo, 28, and his wife are currently living with their parents in their Bukit Merah flat. He said the measures “put a damper” on the couple’s plans to buy a five-room Build-to-Order flat. They will try to save up more money in the coming years to buy their dream home, he said.
“I am all for financial prudence but I am not willing to give up the home that we want. Maybe that will change in time, if it truly gets beyond my reach, but for now, I believe a few years of scrimping and saving will eventually get us what we want,” he said.
Analysts whom TODAY spoke to reiterated that the latest measures were primarily targeted at “preparing the ground” for the looming interest rate hikes.
Nevertheless, Mr Nicholas Mak, Executive Director of Research and Consultancy at SLP International Property Consultants, said the measures, taken as a whole, would rein in the prices of resale HDB flats.
On the new waiting period for PR households, Ms Christine Li, Head of Research and Consultancy at OrangeTee, said: “Some PRs might then be pushed to the private residential market. (They) will also head to the rental market instead. Coupled with the lower MSR limit and shorter loan tenure, demand for resale flats will be further reduced, especially the larger HDB units.”
Mr Mak said it was akin to freezing a section of the demand for resale flats over the next three years.
Mr Colin Tan, Head of Research and Consultancy at Suntec Real Estate Consultants, noted that the supply of resale flats was still an issue, with many homeowners unwilling to sell in the current property climate.
“So, supply is just going to get smaller and smaller,” said Mr Tan.
http://www.aboutsingaporeproperty.com/wp-content/uploads/2011/04/GOVERNMENT-SUBSIDY-FOR-HDB-FLATS.jpg
THE Government yesterday moved to address the growing debate on the affordability of new flats by issuing fresh data and an online video.
The Housing Board (HDB) provided new calculations to show that average prices of new flats last year remained within reach of first-time home buyers in different income groups.
Key to the affordability of new flats is the Government’s Additional Housing Grant (AHG), which is given to most first-time buyers with a household income of less than $5,000 a month.
And in a move that lent a personal touch to his message, National Development Minister Mah Bow Tan appeared for the first time in a video message posted on his ministry’s website assuring Singaporeans that housing will remain affordable.
He acknowledged in the five-minute video that ‘the question that people are asking, and worried about, is whether… they can continue to afford good-quality homes’.
‘Here, I would like to make this categorical assurance and commitment that we will continue to provide good-quality, affordable homes for as many people as possible, through good times and bad,’ he said.
‘And not only provide the homes but sustain the value of those homes over time, as our economy grows (and) as Singapore grows. That is the commitment that this government makes.’
His comments add to a debate on public housing that has become one of the hottest topics this General Election.
Opposition parties have called for new flat prices to be further reduced, with some suggesting that they be pegged to the median incomes of Singaporeans or to the cost of building them.
Meanwhile, the HDB provided new data that supports Mr Mah’s claim on Sunday that most first-time buyers of new flats will need to fork out little or no cash to pay for their new HDB flats.
He cited the example of how a couple below the age of 30, who earn a combined $4,000 a month, need to work for only half a year to buy a new four-room HDB flat with no cash upfront and less than $50 in cash in monthly home loan payments.
These numbers have since been questioned by some ST Forum letter writers and netizens online.
Some have calculated that for such a couple to fork out so little cash after working for only six months, an HDB flat they buy has to be priced at $110,000, whereas the average price of a new four-room flat is around $270,000.
In its response to media queries yesterday, HDB said that Mr Mah’s calculations are correct because they include an Additional Housing Grant (AHG) of $10,000 which is given to a household that earns between $4,001 and $4,500 (See table).
It produced more examples to show that because of the AHG, which can go up to $40,000 depending on the household income, couples buying two- or three-room flats and earning $1,500 and $2,300 a month respectively do not even need to wait a single month to be able to make the down payment for their new flats.
Mr Mah added in the video yesterday that he hopes ‘Singaporeans do not forget the fundamental principles that have brought us to where we are today, which is a home-owning society’.
The principles he mentioned referred to home ownership as compared to rental, homes as an asset and homes for the masses, he said, adding: ‘No other country has the same extent of home ownership that we have.’
http://www.aboutsingaporeproperty.com/2011/04/
http://www.aboutsingaporeproperty.com/wp-content/uploads/2011/04/Mah.bmp
He talk a lot but forget to build enough. Can afford to buy but cannot buy because he did not build enough.
Your colleague's sister broke even in nominal terms. Adjusted by inflation, the 30K "profit" hardly made up for the loss in purchasing power after 14 years...
Timing and luck is everything.
In early 2003, I bought my resale 3 room HDB near the lows (pure dumb luck; I just turned 35 as single).
Bought $125,000; now valued at $375,000 - 3 bagger after 10 years!?
My colleague bought his 5 room HDB at Yio Chu Kang near the peak. 2 years later, he found out his neighbour bought the same unit directly 1 floor down for $100,000 less than him... (Pure dumb "luck" again; he got married that year)
Unless you are willing to rent while you wait for the market to correct, there is little else we can do if we die die need a place to stay :(
2nd investment property another story.
http://sgyounginvestment.blogspot.fr/2013/12/hdb-resale-prices-took-10-years-to.html
The calculation needs to factor in utility value as well.
Lived in it for 14 years, marginal / no rent.
Also, since it was bought with loan, there is very little loss in purchasing power because the actual sum paid and returned is much lower than the sales price.
Your colleague's sister broke even in nominal terms. Adjusted by inflation, the 30K "profit" hardly made up for the loss in purchasing power after 14 years...
Timing and luck is everything.
In early 2003, I bought my resale 3 room HDB near the lows (pure dumb luck; I just turned 35 as single).
Bought $125,000; now valued at $375,000 - 3 bagger after 10 years!?
My colleague bought his 5 room HDB at Yio Chu Kang near the peak. 2 years later, he found out his neighbour bought the same unit directly 1 floor down for $100,000 less than him... (Pure dumb "luck" again; he got married that year)
Unless you are willing to rent while you wait for the market to correct, there is little else we can do if we die die need a place to stay :(
2nd investment property another story.
http://sgyounginvestment.blogspot.fr/2013/12/hdb-resale-prices-took-10-years-to.html
watchlist88
02-08-15, 00:26
Those HDB upgraders who bought EC or private must have suffered a double whammy. I mean if they had bought 2 to 3 years ago say before or right after CM, their HDB houses will be worth lesser right now for resale and on top of that their condo will have dropped in value on paper as newer developments are being launched at lower prices due to cheaper land bought by developers. Also not forgetting that if they are holding on to their HDB, rental yield is trending lower. For those that need to sell off their HDB, they have to contend with a lower resale value too as many others may be selling as their houses are going to TOP in these 2 to 3 years which coincide with the peak of completed condos.
Only EC affected, private still can hold HDB.
watchlist88
02-08-15, 09:20
That's why Khaw needed to give ECs a booster shot by increasing income ceiling. Heard it is going to be $14k or $15k for the revised limit ?
watchlist88
02-08-15, 09:22
That's why Khaw needed to give ECs a booster shot by raising income ceiling. Heard it is either $14k or $15k for the new ceiling.
watchlist88
02-08-15, 09:23
That's why Khaw needed to give ECs a booster shot by raising income ceiling. Heard it is either $14k or $15k.
That's why Khaw needed to give ECs a booster shot by raising income ceiling. Heard it is either $14k or $15k.
How will it affect the pricing of EC if income ceiling goes up? And its impact on Pte property pricing, higher psf ?
challenger
02-08-15, 14:14
That's why Khaw needed to give ECs a booster shot by raising income ceiling. Heard it is either $14k or $15k.
This will give developers reason to raise price, making it harder for those whose income is $8k to afford EC. I think they should do something more creative then just increase income ceiling.
Income $15k should just go and buy private condo.
This will give developers reason to raise price, making it harder for those whose income is $8k to afford EC. I think they should do something more creative then just increase income ceiling.
Income $15k should just go and buy private condo.
It's a secret cooling measure as savings build up. The intention is to encourage upgrade but not multiple property ownership. My guess only.
Singapore property is a control commodities, LKY was fortunate to Acquire lot of Singapore land by Land Acquisition Act to do his planning.
First they control the credit, TDSR.
Then they control what they can buy, HDB BTO, MSR.
Resale HDB they remove the control of valuation as MSR will take care of the increase.
Next EC, they control the size of the unit.
Finally they will increase the income ceiling of EC to control the price from falling.
When EC price is control, HDB resale price is control then they can control the price of private.
They then start to print money for infrastructure call Singapore Saving Bond and the price of property will increase at a control rate.
We will move the Airport, move the port, build HSR and a bird nest at the airport.
watchlist88
02-08-15, 19:05
With $15k as income ceiling, I am sure there will be higher demand for EC. If they can swallow 30% MSR for EC as compared to 60% TDSR for private , EC is a better buy if the pricing is right. So those with extra cash or CPF will opt for EC.
This will give developers reason to raise price, making it harder for those whose income is $8k to afford EC. I think they should do something more creative then just increase income ceiling.
Income $15k should just go and buy private condo.
15k income should go Pte...... I last time 5k gross income already wack freehold Pte and give up EC....garment pamper the people too much , all waiting for cherry to fall right into their mouth
Last time 2 Bedroom at Southbank SGD 535,000 in Jun 2006.
No more last time, moving forward, property price will be control.
According to some dumbass 15K is middle income per person is middle income mah. so combine income of 15K is still way below middle income leh.
The calculation needs to factor in utility value as well.
Lived in it for 14 years, marginal / no rent.
Also, since it was bought with loan, there is very little loss in purchasing power because the actual sum paid and returned is much lower than the sales price.
Just like a friend or mine been waiting since crash for price to drop below the last crash price. sold his place and been renting since 2009. didnt enter in 2009 coz he feel 2009 price should go lower. and he can't look back every since and been renting. so count the no. of years renting 6yrs! and say $2500 pm rent thats 180K paid in rent could have bought a 3bed room in 2009 and would have long broke even. or buy a 4bedder in sengkang and would broke even this yr!
So now as usual. blame government never make it cheap for him. but when he made profit from his 1st unit sold its a matter of fact.
Those HDB upgraders who bought EC or private must have suffered a double whammy. I mean if they had bought 2 to 3 years ago say before or right after CM, their HDB houses will be worth lesser right now for resale and on top of that their condo will have dropped in value on paper as newer developments are being launched at lower prices due to cheaper land bought by developers. Also not forgetting that if they are holding on to their HDB, rental yield is trending lower. For those that need to sell off their HDB, they have to contend with a lower resale value too as many others may be selling as their houses are going to TOP in these 2 to 3 years which coincide with the peak of completed condos.
Well there are those who KPKB say resale HDB price must come down so they can get it cheap. So or someone to gain someone have to give. Thats the cycle .
$15k per person per month is obviously MIDDLE-INCOME to me, in comparison to HIGH-INCOME of $166k per person per month like those earned by the Ministers......
minority,
So you are still insisting that $15k per person pm is HIGH-INCOME? So you are insisting that $166k per person pm like those earned by Ministers are OBSCENE-INCOME??????????
minority,
Come on, don't need to beat around the bush!!!!!!!!
You keep telling and hinting and doing everything here to HIGHLIGHT that $166k per person pm income earned by Ministers are OBSCENE-INCOME right???????????? :im-a-gonna-get-u:
According to some dumbass 15K is middle income per person is middle income mah. so combine income of 15K is still way below middle income leh.
$15k per person per month is obviously MIDDLE-INCOME to me, in comparison to HIGH-INCOME of $166k per person per month like those earned by the Ministers......
minority,
So you are still insisting that $15k per person pm is HIGH-INCOME? So you are insisting that $166k per person pm like those earned by Ministers are OBSCENE-INCOME??????????
minority,
Come on, don't need to beat around the bush!!!!!!!!
You keep telling and hinting and doing everything here to HIGHLIGHT that $166k per person pm income earned by Ministers are OBSCENE-INCOME right???????????? :im-a-gonna-get-u:
Yeah And you are a 1st rated dumb ass compare with brain damage with the intelligent of a ant when compared the intelligence of a DOG. :middle-finger2::middle-finger2::middle-finger2:
And yes properly u think you are talking normally coz u lie n cheat everyday so to your lies sounded like truth to yourself.
Powered by vBulletin® Version 4.2.2 Copyright © 2024 vBulletin Solutions, Inc. All rights reserved.