28 year old Singapore teacher burdened by hefty loan
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At 28, we didn’t think about getting our own flat yet. No car. Bus and MRT plus lots of walking.
We chose restaurant for our wedding instead of ballroom. (Savings)
Chose only the basic package for bridal, etc…
Honeymoon is simple (Australia)
Stayed with his parents.
Worked very very hard and always eat at home.
So maybe different people think differently… -
Resale 4-rm + car were definitely possible for us at 28. But we opted for a bigger unit, and forgo the car. Then it was only the two of us, so train / bus / occasional cab became our main mode of transport, and continued to be so until our first child was 2 years old.
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Are the following observations true?
- If you had graduated in the 80’s, you could easily afford a private property (depending on location, can be below $300k, especially if leasehold)
- If you had graduated in the 90’s, you could easily afford buying a good-size HDB home (i.e. 4, 5 or executive - again about $300k?)
- If you had graduated in the 2000’s, especially during the SARs period or just 2 years ago, good already if you even have a permanent job.
In that sense, if we consider how much starting pay for a graduate has risen over the years, vs how much housing has gone up in terms of price, there is definitely this issue of affordability for the younger batch of graduates.
On the other hand, I will question why the teacher, at 28, could not afford paying a COV of $30,000 without receiving help from parents. True, $2500 for a take-home pay at that age is on the low side. Even then, it should not be difficult to try save $1000 a month. As she is working as a teacher in a school, daily expenses can be quite low (afterall you eat in the school canteen, right?). Assuming you spent $10 a day on food and transport, that would be $300 a month. After saving $1000, there is still $1200 to provide for other expenses and parents’ allowance.
It does boil down to personal choices at the end of the day; what you buy, what you eat, and how much you want to save. I was fortunate in that I didn’t have any financial commitments when I started working. Apart from the monthly allowance that I gave my mom, bulk of my pay went into savings. I made sure of that, I watched what I spent on including food. Bonuses too, went straight into savings after giving extras to my mom.
These days however, when I see young working adults, including those who are in their first year of working in the industry; the things that they carry or wear, it’s simply unbelievable. -
Busymom:
Acutally, in the late 90's, even EA in places like Sengkang is already more than S$400K; but the price went down in the early to mid 2000's, to about S$350K. And these are still first hand units directly from HDB.Are the following observations true?
- If you had graduated in the 80's, you could easily afford a private property (depending on location, can be below $300k, especially if leasehold)
- If you had graduated in the 90's, you could easily afford buying a good-size HDB home (i.e. 4, 5 or executive - again about $300k?)
- If you had graduated in the 2000's, especially during the SARs period or just 2 years ago, good already if you even have a permanent job. -
BlueBells:
Perhaps you are right. I have to admit that I do not know, hence the question mark. But were first hand units from HDB and resale units very different in terms of pricing, if in the same location? Thought I heard that at one time, it does not make sense to buy flats directly from HDB as there wasn't much price differential between the new units and the resale.
Acutally, in the late 90's, even EA in places like Sengkang is already more than S$400K; but the price went down in the early to mid 2000's, to about S$350K. And these are still first hand units directly from HDB. -
I agree with busymon’s observation. Someone has already made some simple analysis to illustrate the situation.
In the 70s, a graduate can earn maybe $1500 a month. 4-room HDB flat at that time cost maybe $20k. It only takes less than two years of salary to buy a reasonably comfortable flat (and the flat at those time were bigger than nowaday).
Today, a graduate starting pay maybe $3k (common). But a 4-room flat is 300-400k (avarage). It takes more than 10 years salaries to buy the same flat (actually it is smaller nowaday).
It is the same as saying rising in salary cannot match the rise in house price. But I have to caution, this may not be the government’s fault generally but some of their policies may have aggravated the problem. -
Busymom:
I'm not so sure about the price differentials, but one thing that most people considered was the size. The area of a resale unit was usually much bigger than the new ones, even within the same location. That could have explained for the higher price of resale flats.
Perhaps you are right. I have to admit that I do not know, hence the question mark. But were first hand units from HDB and resale units very different in terms of pricing, if in the same location? Thought I heard that at one time, it does not make sense to buy flats directly from HDB as there wasn't much price differential between the new units and the resale. -
WeiHan:
It is the government's (policies are set by them) & foreigners' fault. HDB set 10% increase in price every quarter, that is 40% increase per year. Our salaries do not increase at the same rate. In the past, repayment period is max 25 yrs, now 30 yrs.
It is the same as saying rising in salary cannot match the rise in house price. But I have to caution, this may not be the government's fault generally but some of their policies may have aggravated the problem.
Look at the record prices of HDB that appear in the papers. It is a chain effect when pte sales go up, so will resale flats and rents when supply cannot meet demand with the influx of PRs & FTs. -
I could be wrong, but I understand HDB valuation is based on past transacted rates (plus/minus other factors). Sellers want to maintain COV, and this COV is reported as transacted price. Spiral effect?
Yr1: Valuation 100K, COV 20K = 120K (Transacted)
Yr2: Valuation 120K, COV 20K = 140K (transacted)… -
caroline3sg:
It is the government's (policies are set by them) & foreigners' fault. HDB set 10% increase in price every quarter, that is 40% increase per year. Our salaries do not increase at the same rate. In the past, repayment period is max 25 yrs, now 30 yrs.WeiHan:
It is the same as saying rising in salary cannot match the rise in house price. But I have to caution, this may not be the government's fault generally but some of their policies may have aggravated the problem.
Look at the record prices of HDB that appear in the papers. It is a chain effect when pte sales go up, so will resale flats and rents when supply cannot meet demand with the influx of PRs & FTs.
That is true that the influx of foreigners have pushed up the HDB flat price. But remember that in many places in Asia, including HK, Taipei and China, property price is spiralling up due to speculation from governments stimulus budget. Young people in these cities are facing similar problem of high property price also. Salary cannot catch up with price rises. The sky high price of property is basically due to a bubbling sector contrary to what the gahman and property developers denial.
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