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carbuncle
19-05-12, 10:39
» Affording that first, dream
home
Straits Times: Fri, May 18
Is the dream of home
ownership still within the
reach of young people in
Singapore?
THERE'S nothing quite like the
subject of property to get the
average Singaporean excited.
Discussions on home prices,
movements of the property
market, unit sizes and even
interior decoration dominate
all manner of daily
conversations, from
Parliament debates to coffee
shop talk.
Singapore is a home-owning,
house-proud nation. This has
its roots in a decision made by
the first generation of leaders
more than 50 years ago -
when Singapore gained self-
governance - who saw the
value of home ownership.
Former prime minister Lee
Kuan Yew, for example, saw it
as a way to create a sense of
national belonging in a
volatile era, when the country
was coming to terms with self-
governance and later,
independence.
Mr Lee wrote in his 2000
memoirs that it was important
for Singaporeans to own their
homes: 'I believed this sense
of ownership was vital for our
new society, which had no
deep roots in a common
historical experience.'
Over the past five decades,
the Housing Board has been
the cornerstone of that
fundamental philosophy. The
HDB was established on Feb 1,
1960 - shortly after Singapore
gained self-governance in
1959, and amid a housing
crisis. Then, much of the
population was living in
crowded squatter settlements
and unhealthy conditions.
The HDB, taking over from its
predecessor, the Singapore
Improvement Trust, was
tasked with housing the entire
nation. It built 21,000 flats in
under three years. By 1965,
when Singapore gained
independence, it had built
54,000 flats. Within 10 years of
its formation, it had the
housing problem under
control.
Today, it has built more than
one million flats, housing over
80 per cent of Singapore's
residents.
The homes have become a
social safety net, an asset that
has become a hedge against
inflation and a store of
retirement income for home
owners.
In Singapore, about 88 per
cent of households own their
homes, with most owning HDB
homes. This is a notable
achievement for a city once
overrun by slums. In
comparison, rival city Hong
Kong's figure is much lower,
at about 52 per cent.
Singapore's public housing
policies and projects have also
gained international
recognition. In 2010, the HDB
was awarded the 2010 United
Nations-Habitat Scroll of
Honour Award, the most
prestigious award of its kind,
which recognised the housing
board for 'providing one of
Asia's and the world's
greenest, cleanest and most
socially conscious housing
programmes'.
But as successful as HDB has
been in the past, other more
complex issues have surfaced
in recent years that have
prompted a national
discussion and review of
current housing policies.
In last year's General Election,
housing emerged as one of
the hottest topics, with the
public voicing strong opinions
over the affordability of
homes, particularly for newly-
wed, first-time home buyers.
Singapore's property bull run
of the past five years -
bolstered by the country's
strong economic growth - had
seen private and public
housing prices soar to historic
highs.
Home buyers were unhappy
about either being priced out
of the HDB resale market or
repeated failure in balloting
for a new flat from the HDB.
The question that young home
buyers were asking was: How
can we afford that first,
dream home?
Well, the good news is that
homes are still affordable -
depending on what you are
aiming for.
The Government's promise -
and the HDB's mission - is to
provide affordable housing for
the masses.
Newly-weds earning below $
10,000 in combined monthly
income can apply for the
HDB's new Build-To-Order
(BTO) flats, which are
typically priced around 30 per
cent cheaper than comparable
resale flats in the same area.
The income ceiling was
recently raised from $8,000 to
$10,000 to enable a larger
number of buyers to purchase
flats directly from the HDB.
The move was seen to help in
drawing demand away from
the red-hot resale market.
The HDB has in the past year
launched new projects at least
once every two months across
a wide range of locations. BTO
flats, however, take around
three years to be built - so
young buyers have to be
prepared to wait for their
home.
Prices of new BTO flats have
been kept stable in the past
year, and are generally
affordable for young couples,
going by widely used
standards.
The internationally recognised
threshold for housing
affordability is a 30 per cent
'debt-to-service ratio' (DSR) -
the proportion of monthly
income that goes into paying
the mortgage. (See box for a
worked example.)
Another widely used
affordability measure divides
the price of a home by a
potential buyer's annual
income.
The affordability picture
changes if the couple opt for a
resale HDB flat instead.
The Government does not
control prices of HDB resale
flats, which reflect market
demand and supply. Many
resale flats are in mature
estates with many amenities,
and in locations more central
than new flats. The result:
Most HDB resale flats are
more expensive than new
flats.
Buyers of resale flats also
need more cash reserves to
pay for their homes, as sellers
typically demand a cash
premium - called cash-over-
valuation - over and above a
flat's valuation.
According to the HDB's latest
figures, the median price of a
four-room resale flat ranges
from $384,000 in Yishun to $
655,000 in Queenstown.
First-time buyers have to do
their sums carefully to
determine if they can afford
it. If the couple can qualify for
an HDB loan, the upfront
payment needed will be 10 per
cent; for those who do not
qualify and have to get private
bank loans, the upfront
payment is a heftier 20 per
cent.
For a $655,000 flat, this is $
65,500 or $131,000
respectively, which can be
paid in cash or with one's
Central Provident Fund.
Those who have just joined the
workforce would have to work
for several years before they
can come up with those kinds
of savings. Those earning
below $5,000 monthly will also
find that their DSR will shoot
past 30 per cent (explained in
the worked example) if they
set their sights on pricey
resale homes.
Those with loftier ambitions of
getting into the private
property market after
working for a few years might
need a further reality check.
Latest figures from the
Singapore Real Estate
Exchange (SRX), which
collects price data, shows that
the average per square foot
price of a non-landed private
home is $1,061 for the first
quarter of this year.
This means a three-bedroom
condominium unit of, say,
1,000 sq ft will cost about $1
million, of which about $
200,000 is needed upfront.
It is no wonder that parents
often advise their children to
start with a new HDB flat. You
need to live in it for at least
five years before it can be
sold or rented out.
Existing housing policies
favour the family unit - only
married couples are allowed
to buy new flats from the HDB
or qualify for grants. Singles
cannot buy new flats directly,
and have to be above 35 years
of age to purchase HDB resale
flats.
For young buyers who are
neither married nor have a fat
bank account as yet, there are
other options to consider.
They can live with their
parents or other family
members, or rent a place.
More may be doing so: Figures
from the 2010 Population
Census show a rise in the
proportion of one-person
resident households in the 25
to 29 age group, from 10 per
cent in 2000 to 28 per cent in
2010.
Such an option might cost
more, but offers more
flexibility on flat type and
location, as well as the
freedom and independence
that many young people
desire today.
Ultimately, the path to your
dream home can be achieved
in several ways. Arming
yourself with intimate
knowledge of the property
market, housing policies and
financing options is the first
step to getting that first
dream home.
[email protected]

carbuncle
19-05-12, 10:40
For young buyers who are
neither married nor have a fat
bank account as yet, there are
other options to consider.
They can live with their
parents or other family
members, or rent a place.
More may be doing so: Figures
from the 2010 Population
Census show a rise in the
proportion of one-person
resident households in the 25
to 29 age group, from 10 per
cent in 2000 to 28 per cent in
2010.

roly8
19-05-12, 10:42
your singapore.. :cheers1:

sh
19-05-12, 10:47
For young buyers who are
neither married nor have a fat
bank account as yet, there are
other options to consider.
They can live with their
parents or other family
members, or rent a place.
More may be doing so: Figures
from the 2010 Population
Census show a rise in the
proportion of one-person
resident households in the 25
to 29 age group, from 10 per
cent in 2000 to 28 per cent in
2010.

Who say no real demand for MMs?

evergreen
19-05-12, 12:48
Who say no real demand for MMs?
many more unaccounted ones from those who are renting but still use their parents' home as official address.


"If there's going to be a war in Singapore, I'll be the first out of here," my male Singapore friend said. "Why should I risk my life to serve the country?"

"Your house leh?" I asked.

"Hm...."

The idea of "home ownership" which the government sold to us is fantastic! :cheers5:


Who say no real demand for MMs?
many more unaccounted ones from those who are renting but still use their parents' home as official address.