$4k combined income can buy 4-room HDB in 6 months?

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$4k combined income can buy 4-room HDB in 6 months?

Postby wemakebread » Tue Apr 26, 2011 12:15 am

In TODAY (26 Apr 2011), there was this article
https://www.facebook.com/l.php?u=http%3 ... an&h=fbb55


Our Minister cited an example of how a young couple below age 30, earning combined income of $4000, can pay the 5% downpayment for a new 4-room HDB flat with no cash, after working for just 1/2 year to build up their CPF, and pay less than $50 for their monthly mortage payment.

How is it possible?
Can someone clever help me with the maths.


Here's my working:
CPF contribution works out to only $8400, but actually only $5460 in the OA account can be used for CPF purchase. Furthermore I believe the downpayment is 10%. And lastly, past few new BTO launches have priced 4-room flat easily above $250,000. For some projects, 4-room flats start from $300,000. Exceptions I found are Yishun ($230k, Jan 11) and Senja ($242k, Oct 10).

All in all, the example cited doesn't seem realistic at all.
For the $5460 to cover 10% downpayment means the flat must be below $54600. I think I am almost 30 years late to get this sort of pricing.


Housing not a make-or-break issue at GE: Mah Bow Tan
The most important issue is who can look after S'pore's future

by Ong Dai Lin 03:30 AM Apr 25, 2011

SINGAPORE - It is "highly misleading" and "mischievous" of Workers' Party (WP) chief Low Thia Khiang to allege that the Government has been guilty of taking from the reserves for years, said National Development Minister Mah Bow Tan.

In the latest exchange of words between the WP and the People's Action Party on how public housing should be priced, Mr Mah said the Government is fiscally prudent and has not drawn on past reserves for any of its budget spending. The only exception was in 2009 when the Government withdrew S$4 billion to fund the Resilience package to revive the economy.

In a press conference yesterday, Mr Mah said the money was returned to the reserves earlier this year and pointed out that Mr Low "had even commended the Government for doing so".

On Mr Low's remarks that the Budget's S$3.2 billion Grow and Share package is considered as raiding the reserves, Mr Mah said the money is from budget surpluses and is "completely funded from current reserves".

Mr Mah also reiterated that the Government takes a calibrated approach to stabilise the housing market but the WP's proposal to lower new flat prices is "ill-conceived and dangerous" as it would distort the market and destroy the value of flats owned by Singaporeans today. He added that it is "not quite right" to "deliberately implement policy to crash the market".

When asked why he has repeatedly rebutted the WP on housing and not the National Solidarity Party, which also zoomed in on public housing in its manifesto, Mr Mah said the specifics of the WP's proposal are "very clear" and "our duty is to point out the longer term implications and to get a response from them".

Asked if he thinks housing will be a make-or-break issue in the General Election, Mr Mah said no, adding: "There are so many other issues. The most important issue is who can form the Government that can look after Singapore and secure Singapore's future."

The Government understands Singaporeans' concerns about the recent rise in housing prices, he said, but unlike other countries, Singapore has more policies and programmes in place to deal with the issue. He cited housing grants, increased supply of Build-to-Order flats and market cooling measures to address concerns on housing prices.

As a result of these efforts, eight in 10 couples who bought new flats last year used 25 per cent or less of their salaries to service their monthly mortgages, meaning that they pay little or no cash, he said.

Mr Mah cited an example of how a young couple below 30 and earning a combined income of S$4,000 can pay the 5 per cent downpayment for a new four-room HDB flat with no cash after working for half a year to build up their CPF, and pay less than S$50 for their monthly mortgage payment.

He told reporters: "You would get a flat with zero deposit. Now, how many countries in the world can say that? How many housing ministers in the world can say what I have just said?"
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Re: $4k combined income can buy 4-room HDB in 6 months?

Postby Dennis Ng » Wed Apr 27, 2011 3:52 pm

Hi wemakebread,

for those below age 35, 23% of income goes to CPF Ordinary account, so the amount is S$920 per month and S$5,520 for 6 months.

As for how can this couple pay downpayment for house, I think we need to ask our very Brilliant Minister Mah to enlighten us. Perhaps Mah was talking about the S$1,000 Option fee instead. haha.

Cheers!

Dennis Ng

wemakebread wrote:In TODAY (26 Apr 2011), there was this article
https://www.facebook.com/l.php?u=http%3 ... an&h=fbb55


Our Minister cited an example of how a young couple below age 30, earning combined income of $4000, can pay the 5% downpayment for a new 4-room HDB flat with no cash, after working for just 1/2 year to build up their CPF, and pay less than $50 for their monthly mortage payment.

How is it possible?
Can someone clever help me with the maths.


Here's my working:
CPF contribution works out to only $8400, but actually only $5460 in the OA account can be used for CPF purchase. Furthermore I believe the downpayment is 10%. And lastly, past few new BTO launches have priced 4-room flat easily above $250,000. For some projects, 4-room flats start from $300,000. Exceptions I found are Yishun ($230k, Jan 11) and Senja ($242k, Oct 10).

All in all, the example cited doesn't seem realistic at all.
For the $5460 to cover 10% downpayment means the flat must be below $54600. I think I am almost 30 years late to get this sort of pricing.


Housing not a make-or-break issue at GE: Mah Bow Tan
The most important issue is who can look after S'pore's future

by Ong Dai Lin 03:30 AM Apr 25, 2011

SINGAPORE - It is "highly misleading" and "mischievous" of Workers' Party (WP) chief Low Thia Khiang to allege that the Government has been guilty of taking from the reserves for years, said National Development Minister Mah Bow Tan.

In the latest exchange of words between the WP and the People's Action Party on how public housing should be priced, Mr Mah said the Government is fiscally prudent and has not drawn on past reserves for any of its budget spending. The only exception was in 2009 when the Government withdrew S$4 billion to fund the Resilience package to revive the economy.

In a press conference yesterday, Mr Mah said the money was returned to the reserves earlier this year and pointed out that Mr Low "had even commended the Government for doing so".

On Mr Low's remarks that the Budget's S$3.2 billion Grow and Share package is considered as raiding the reserves, Mr Mah said the money is from budget surpluses and is "completely funded from current reserves".

Mr Mah also reiterated that the Government takes a calibrated approach to stabilise the housing market but the WP's proposal to lower new flat prices is "ill-conceived and dangerous" as it would distort the market and destroy the value of flats owned by Singaporeans today. He added that it is "not quite right" to "deliberately implement policy to crash the market".

When asked why he has repeatedly rebutted the WP on housing and not the National Solidarity Party, which also zoomed in on public housing in its manifesto, Mr Mah said the specifics of the WP's proposal are "very clear" and "our duty is to point out the longer term implications and to get a response from them".

Asked if he thinks housing will be a make-or-break issue in the General Election, Mr Mah said no, adding: "There are so many other issues. The most important issue is who can form the Government that can look after Singapore and secure Singapore's future."

The Government understands Singaporeans' concerns about the recent rise in housing prices, he said, but unlike other countries, Singapore has more policies and programmes in place to deal with the issue. He cited housing grants, increased supply of Build-to-Order flats and market cooling measures to address concerns on housing prices.

As a result of these efforts, eight in 10 couples who bought new flats last year used 25 per cent or less of their salaries to service their monthly mortgages, meaning that they pay little or no cash, he said.

Mr Mah cited an example of how a young couple below 30 and earning a combined income of S$4,000 can pay the 5 per cent downpayment for a new four-room HDB flat with no cash after working for half a year to build up their CPF, and pay less than S$50 for their monthly mortgage payment.

He told reporters: "You would get a flat with zero deposit. Now, how many countries in the world can say that? How many housing ministers in the world can say what I have just said?"
Cheers!

Dennis Ng - When You Master Your Finances, You Master Your Destiny

Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
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Re: $4k combined income can buy 4-room HDB in 6 months?

Postby daringd » Wed Apr 27, 2011 4:34 pm

OMG!
Numbers don't lie.
Won't they have some kind of scholars to do all the mathematics for them before they come out with such statement?
Then again, I wonder how many people who read will actually stop, think and count. Majority will just believe and shrug the news off and yearn for more news the next day.

Then again, they only focus on the 5% downpayment upon signing. I thought downpayment is 10% and not 5%?

Dennis Ng wrote:Hi wemakebread,

for those below age 35, 23% of income goes to CPF Ordinary account, so the amount is S$920 per month and S$5,520 for 6 months.

As for how can this couple pay downpayment for house, I think we need to ask our very Brilliant Minister Mah to enlighten us. Perhaps Mah was talking about the S$1,000 Option fee instead. haha.

Cheers!

Dennis Ng

wemakebread wrote:In TODAY (26 Apr 2011), there was this article
https://www.facebook.com/l.php?u=http%3 ... an&h=fbb55


Our Minister cited an example of how a young couple below age 30, earning combined income of $4000, can pay the 5% downpayment for a new 4-room HDB flat with no cash, after working for just 1/2 year to build up their CPF, and pay less than $50 for their monthly mortage payment.

How is it possible?
Can someone clever help me with the maths.


Here's my working:
CPF contribution works out to only $8400, but actually only $5460 in the OA account can be used for CPF purchase. Furthermore I believe the downpayment is 10%. And lastly, past few new BTO launches have priced 4-room flat easily above $250,000. For some projects, 4-room flats start from $300,000. Exceptions I found are Yishun ($230k, Jan 11) and Senja ($242k, Oct 10).

All in all, the example cited doesn't seem realistic at all.
For the $5460 to cover 10% downpayment means the flat must be below $54600. I think I am almost 30 years late to get this sort of pricing.


Housing not a make-or-break issue at GE: Mah Bow Tan
The most important issue is who can look after S'pore's future

by Ong Dai Lin 03:30 AM Apr 25, 2011

SINGAPORE - It is "highly misleading" and "mischievous" of Workers' Party (WP) chief Low Thia Khiang to allege that the Government has been guilty of taking from the reserves for years, said National Development Minister Mah Bow Tan.

In the latest exchange of words between the WP and the People's Action Party on how public housing should be priced, Mr Mah said the Government is fiscally prudent and has not drawn on past reserves for any of its budget spending. The only exception was in 2009 when the Government withdrew S$4 billion to fund the Resilience package to revive the economy.

In a press conference yesterday, Mr Mah said the money was returned to the reserves earlier this year and pointed out that Mr Low "had even commended the Government for doing so".

On Mr Low's remarks that the Budget's S$3.2 billion Grow and Share package is considered as raiding the reserves, Mr Mah said the money is from budget surpluses and is "completely funded from current reserves".

Mr Mah also reiterated that the Government takes a calibrated approach to stabilise the housing market but the WP's proposal to lower new flat prices is "ill-conceived and dangerous" as it would distort the market and destroy the value of flats owned by Singaporeans today. He added that it is "not quite right" to "deliberately implement policy to crash the market".

When asked why he has repeatedly rebutted the WP on housing and not the National Solidarity Party, which also zoomed in on public housing in its manifesto, Mr Mah said the specifics of the WP's proposal are "very clear" and "our duty is to point out the longer term implications and to get a response from them".

Asked if he thinks housing will be a make-or-break issue in the General Election, Mr Mah said no, adding: "There are so many other issues. The most important issue is who can form the Government that can look after Singapore and secure Singapore's future."

The Government understands Singaporeans' concerns about the recent rise in housing prices, he said, but unlike other countries, Singapore has more policies and programmes in place to deal with the issue. He cited housing grants, increased supply of Build-to-Order flats and market cooling measures to address concerns on housing prices.

As a result of these efforts, eight in 10 couples who bought new flats last year used 25 per cent or less of their salaries to service their monthly mortgages, meaning that they pay little or no cash, he said.

Mr Mah cited an example of how a young couple below 30 and earning a combined income of S$4,000 can pay the 5 per cent downpayment for a new four-room HDB flat with no cash after working for half a year to build up their CPF, and pay less than S$50 for their monthly mortgage payment.

He told reporters: "You would get a flat with zero deposit. Now, how many countries in the world can say that? How many housing ministers in the world can say what I have just said?"
Kind Regards

D.D.
www.DonnaDaritan.com
Living through questions, reflections and actions.
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Postby dreamslink » Thu Apr 28, 2011 11:45 am

Hi Daringd,

I think the HDB loan downpayment is 5% if your age is below 30 years old. Max loan is 95%.
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Postby Dennis Ng » Thu Apr 28, 2011 3:49 pm

dreamslink wrote:Hi Daringd,

I think the HDB loan downpayment is 5% if your age is below 30 years old. Max loan is 95%.


max loan by HDB is 90%. I think Mah Bow Tan is talking about the S$2,000 booking fee for BTO flats, not the 10% downpayment. :lol:
Cheers!

Dennis Ng - When You Master Your Finances, You Master Your Destiny

Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng
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Posts: 9781
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Postby DavidisFinanciallyFree » Thu Apr 28, 2011 5:31 pm

I think Mabok Tan was really drunk when he made that statement. When did our downpayment for HDB become 5%? This shows that he doesn't even know his HDB stuff!! Sleeping on his job? :lol:

And even if we include the AHG of $15,000 for household income of $4K plus total CPF/OA for 1/2 yr of $5,520 which is only $20,520. Where do we find a 4-room HDB flat that is priced at $205,200. Is he going to top up the difference? :lol:

Oh and btw I have not included the legal and other administrative fees!

Do correct me if my calculation is wrong cos I do not work in HDB so I do not calculate as competently as Mr Mabok Tan :lol:
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Postby wemakebread » Thu Apr 28, 2011 10:33 pm

Thanks David,

One of my friend also showed me a similar calculation.
But when I checked further about AHG on HDB website:
http://www.hdb.gov.sg/fi10/fi10321p.nsf ... enDocument

I observed that 10% downpay is based on Valuation Price (which is before AHG)
The AHG helps to reduce balance, so that smaller loan is needed.

So with only $5520 in my CPF, and assuming no money down, I can only afford a flat costing $55,200 ... erh, not even enough to buy 1-room :(
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Postby DavidisFinanciallyFree » Fri Apr 29, 2011 10:46 am

Oh I'm only referring to new HDB flats cos even new HDB flats also cannot afford, no need to talk abt our super sky high resale flats already.. Hahaha..

How can we continue to entrust our future to these jokers? :lol:
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Postby kakashi78 » Fri Apr 29, 2011 5:12 pm

I have personally drop a message in Mah Bow Tan FB requesting for explaination for my failure in 5th attempts in applying a BTO. Right now, I'm squeezing into a 3rms flat with my in laws and my wife is expecting too. I'm also send MBT and HDB an email and I'm never receive any reply from them to address my concern.. How frustrating!!
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Postby DavidisFinanciallyFree » Fri Apr 29, 2011 5:36 pm

kakashi78 wrote:I have personally drop a message in Mah Bow Tan FB requesting for explaination for my failure in 5th attempts in applying a BTO. Right now, I'm squeezing into a 3rms flat with my in laws and my wife is expecting too. I'm also send MBT and HDB an email and I'm never receive any reply from them to address my concern.. How frustrating!!


U may want to send again during the next 8 days. They are super-responsive and efficient now. After which, as we all know, they will reinstate :lol:
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Postby kakashi78 » Fri Apr 29, 2011 5:43 pm

Its ok I already give up hope on them..... It's the "vote" that counts now... :evil:
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Postby kklok » Fri Apr 29, 2011 7:30 pm

Hi kakashi78,

Are u telling us a joke or what? Do u think "THEY" care!!!
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