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.
http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/176CF92493B9089848257A4C0019D9BA
They are probably talking about resale HDB. And they are most probably also talking about mature estates near their parents.
ReplyDeleteFor 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.
One benchmark is to not spend more than 30 percent of your monthly income on the mortage.
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