28 year old Singapore teacher burdened by hefty loan

[hquek]

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)…

[WeiHan]

caroline3sg:

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.

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.

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.

[WeiHan]

We don’t know when a bubble will burst but it will certainly burst one day. Be careful not to follow lemming and get burdened with one of these bubble, expensively priced property.


I wonder what will happened when interest rate start rising in the not too distant future.

[sunflower]

I agree that property prices are getting sky high but we still need to live within our means. There are many families with children out there who can live with a less than $5000 per month household income, some might even be graduates but are relying on a single income either by choice or by circumstances.


Frankly, at age 28 and without children, I don’t think a car is a necessity. Also, a 3-room flat should be adequate at this phase of their lives.

I know of a couple who married young with not much savings and started out renting a HDB flat. They subsequently went on to have successful careers and of course, upgraded themselves accordingly.

I noticed there are many comments in that post about voting out the PAP. Well, to add a bit of satire here, I think we should vote them out, not because, in their opinion, that the government is the cause of all these grievances, but to vote for a change so that they can then realise not to take everything around them for granted and to expect that to live up to a certain lifestyle is a given.

[corneyAmber]

Something is very wrong here...the youngsters are told to work their butts out to get to the U, drive up their hunger for everything in their lives for a materially better lifestyle. Then tell them to get real when they arrive and they can only live in 3-rm flat and take MRT at 28 which is lesser than what their parents are offering them? Will they bite? :?


This is a good case of overpromising and underdelivery.

I don't think there is any agenda to vote against PAP in this discussion. We just have to speak sense with youngsters these days and not treat them like fools to blindly pursue something that may not materialise and cause disappointment. Vlim seems to be starting to go down the right track in another thread she started.... \"Good\" education = Bright future? where Good = university education specifically. If the formula is not so simple, we should not fool the youngsters after they have such a rigorous education life.

[Funz]

It is not that they should not aim for higher or better. But lets be realistic, we faced the same thing, compared to those who are 10yrs ahead of us. For that matter, my sister managed to get a 5rm exec direct from HDB at $200+K, 5yrs down the road when I was ready to settle, no such hope. Such is the price of progress and development. This is happening everywhere, all the time since the days of our fathers and our fathers’ father. Their situation is not unique.


With a combined salary of $5k, take home will be $4k. After the $30K COV and the 10% upfront from CPF for the flat, they will have to take a loan of about $423K. Based on HDB loan rates of 2.6% their monthly repayment will be about $1.7K. Of which say maybe $800 comes from CPF so they still have to fork out $900 cash. They will be left with about $3K. A very comfortable sum for most DINKs and is the combined income of a large number of the households in Singapore.

[corneyAmber]

True, we faced similar situation with rising cost of property BUT our lives were simpler. I don’t remember having mobile phone bills and broadband bills to pay for then. But now it is something everyone has from 6yo to 80yo. Sometimes it is not fair to ask them to live the way we have done before because their current parameters are quite different, we are in a dramatically changed world.


With that 3k, it’s back to assuming they don’t need to own a car but unfortunately they already do…so it is tight especially with car maintenance and loan. Again, I stress, for couple graduates to expect a car by 28 is not expecting too much during my time, obviously it is now, given the sums you have worked out.

I agree they should live within their means but I believe they are lamenting why they can only afford everything comfortably at a later time?

[tankee]

things are getting too expensive for graduates?


then what about non-graduate? :?

[sunflower]

ks2me:

Something is very wrong here...the youngsters are told to work their butts out to get to the U, drive up their hunger for everything in their lives for a materially better lifestyle.

In my humble opinion, I think studying hard and getting good grades is not about achieving material gains as the ultimate goal. To me, the process of acquiring and gaining knowledge itself is pure joy, and whether it ultimately leads to high paying job and desired lifestyle is immaterial. But I think my thoughts won't go down too well with many people in materialistic Singapore.

ks2me:

Then tell them to get real when they arrive and they can only live in 3-rm flat and take MRT at 28 which is lesser than what their parents are offering them? Will they bite? :?

For some cases, this may not be lesser than what their parents are offering.

Anyway, I had a relatively good life, good grades, good schools/university degrees, stayed in private property and was chauffeured around till JC. However, I chose not to be bogged down by chasing money to live a 5Cs lifestyle. To me, staying in a HDB flat is comfortable enough, ( I can quit my job to take care of children and don't have to worry about repaying loans). We still travel via public transport (doesn't make sense to get a car when one of us don't drive). Well, I'm not bothered when peers are getting high pay or live in big houses.

To me, living a simple yet meaningful and fruitful life is more important. Yes, I agree that we need to knock some sense in youngsters nowadays.

[corneyAmber]

sunflower, you are probably a unique and good case study for youngsters today to look at and emulate. You understand contentment and you don’t mind choosing a path lesser travelled in materialistic Singapore.


All I am saying is it is not entirely their fault to be AMBITIOUS, what they are ingrained with, you cannot blame them entirely, partly parents’ fault, partly society’s rapid changes problem. However, if it is their wilfulness to be a bum, then that is their problem.