Saturday, July 12, 2008
About this Blog
Cap for HDB is $8K p/m household income, around 100K per year. Multiply by 7-8 years (rough measure of what property can afford) is 700 - 800K. Many property choices at that price, so value is fair. There are a lot of households whose incomes are much higher than $8K p/m since grad starting pay is already $2.5 - 3K.
Bear wrote:
For a household income of $8K/mth, with $2-3K going to mortgage is possible but tough, really tough. $1K goes to maid, $1K children tuition fees, you're left with $3-4K and at today's high inflation .. you can see why Singaporeans are not having children. Furthermore, it requires 2 stable incomes with little allowance for misfortune like retrencment, or luxuries like having one stay-home-parent. I don't think Singaporeans would want all their life to just go to property
Bull wrote:
Business times today reported that > 70% of housing loans are < $200K, so obviously most Singaporeans do not need to borrow heavily for property.... Singapore property is affordable, no problem to buy & pay off loan. Most people borrow very little, many buy & pay up everything. Bear wrote: As for BT's report that >70% of housing loans are less than $200K, that figure has to be interpreted carefully. That 70% may be made up of mostly HDB flats buyers cost that's the bulk of property market. HDB flats typically $2xxK to $3xxK, so you can see why most home loans are less than $2xxk. I think amt for home loans in private property would be much higher. Looking at friends around me, they typically pay about 2 times the property price including their home loans, which means for a $1M property, you'd end up paying ~$2M at the end of the mortgage.
Bull wrote:
Even if price drop by another 10%, can recoup that with 3 years rental if can afford to hold long term. Anyone disagree?
Bear wrote:
10% of $1M is $100K, take a couple 1 year to earn. Besides, you've to add your mortgage cost and foregone interest, like CPF interest. Rental yield is also likely to drop with properties getting TOP. A 10% drop in property price may result in as much as 15%-20% loss in reality.
I'd urge buyers also to assess their risk of a layoff in this uncertain time. The worst to happen is when you cannot service your home loans and suffer bank foreclosures. Besides considering affordabilty in terms of income, do consider what life you really want for yourself and your family.
-Extracted from the Singapore Property Forum
May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
When to Buy, When Not to by
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase
Is Singapore Property Affordable
Bull wrote:Cap for HDB is $8K p/m household income, around 100K per year. Multiply by 7-8 years (rough measure of what property can afford) is 700 - 800K. Many property choices at that price, so value is fair. There are a lot of households whose incomes are much higher than $8K p/m since grad starting pay is already $2.5 - 3K.
Bear wrote:
For a household income of $8K/mth, with $2-3K going to mortgage is possible but tough, really tough. $1K goes to maid, $1K children tuition fees, you're left with $3-4K and at today's high inflation .. you can see why Singaporeans are not having children. Furthermore, it requires 2 stable incomes with little allowance for misfortune like retrencment, or luxuries like having one stay-home-parent. I don't think Singaporeans would want all their life to just go to property
Bull wrote:
Business times today reported that > 70% of housing loans are < $200K, so obviously most Singaporeans do not need to borrow heavily for property.... Singapore property is affordable, no problem to buy & pay off loan. Most people borrow very little, many buy & pay up everything. Bear wrote: As for BT's report that >70% of housing loans are less than $200K, that figure has to be interpreted carefully. That 70% may be made up of mostly HDB flats buyers cost that's the bulk of property market. HDB flats typically $2xxK to $3xxK, so you can see why most home loans are less than $2xxk. I think amt for home loans in private property would be much higher. Looking at friends around me, they typically pay about 2 times the property price including their home loans, which means for a $1M property, you'd end up paying ~$2M at the end of the mortgage.
Bull wrote:
Even if price drop by another 10%, can recoup that with 3 years rental if can afford to hold long term. Anyone disagree?
Bear wrote:
10% of $1M is $100K, take a couple 1 year to earn. Besides, you've to add your mortgage cost and foregone interest, like CPF interest. Rental yield is also likely to drop with properties getting TOP. A 10% drop in property price may result in as much as 15%-20% loss in reality.
I'd urge buyers also to assess their risk of a layoff in this uncertain time. The worst to happen is when you cannot service your home loans and suffer bank foreclosures. Besides considering affordabilty in terms of income, do consider what life you really want for yourself and your family.
-Extracted from the Singapore Property Forum
May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
When to Buy, When Not to by
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase
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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.
Smart Buyer :)