Saturday, January 19, 2013

New HDB flats

In my financial planning talk, my advice is to spend not more than 5 years of the family income on their home. Many participants said that for a family income of $60,000, my 5 year benchmark is $300,000 and it is not possible to buy any HDB flat at this price.

I checked the HDB website and found that it is possible to buy a new 4 room HDB flat way below this price, if the government glrant is counted. Without the grant, it is still possible to buy with this budget.


Spur said...

They are probably talking about resale HDB. And they are most probably also talking about mature estates near their parents.

For these people, 3 choices:-
1. Buy a resale HDB now and mortgage your whole life away.

2. Stay with parents first, and buy during market downturn. For sure within the next 3 years, property market will drop by at least 30%.

Btw this was what I did when I got married in 1995. Property prices were shooting up at a rate even faster than today. Prices went even more ballistic in 1996. Then the Asian Financial Crisis crashed the property market from 1997-1998.

3. Buy new HDB and fulfill the 5-yr MOP. After 5 years, evaluate whether to move to better location. If there's a prolonged market downturn & recession during the next 3 years, even after the 5-yrs MOP resale HDB in mature estates will still be cheaper than today.

Sureesh said...

One benchmark is to not spend more than 30 percent of your monthly income on the mortage.

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