Affordable HDB

Recently, I've been thinking, does it make sense to get a new HDB flat?

Mr Mah said on 10 Apr 2010 that housing was still affordable. Is it really?

Let's just say for argument's sake that you ballot for new HDB BTO project in Choa Chu Kang and you got it on the first try. Woopee!

For new 4-rm units, pricing ranges from $226K to $278K. Let us take the middle of $252K as representative.

252K, That's not so bad right, so you wanna use your CPF to pay. Let's just say for argument's sake that you and your gf have just nice 52K in your CPF OA + 1st time grant etc. So your CPF is basically wiped out.
To pay for the 200K balance, you have to get a loan, let's say you apply for HDB housing loan..

Let's just say you and your gf have a gross monthly income of $5500, of course, that won't be stagnant as you get more experienced. And you decide to pay the whole thing in 10years because, let's face it, 2.6% loan interest is too high, and the more you decide to delay payment the more money you lose.(Max 30 years)

$5500 * 40% = $2200 repayment per month @ 2.6% interest.
HDB max ceiling for housing repayment is 40% for income. so your CPF OA per month is wiped out for 10 years
So if you do a little calculation, you can repay the HDB in around 9 years.
$2200*9years*12mths=$237600. That's over your loan of 200K , including interest
Let's just say that amount is the amount you pay for 9 years with interest.

So let's sum it up, your
1)OA is wiped out for 9 years
2)You have $3300 left for household expenses, clothing , food,personal insurance, housing insurance, bills.
Let's say you spend $2000 total on all the stuff above.
You have $1000 left in your savings for holiday and extraordinary expenses like eating out on special occasions, personal entertainment.

So what happens when you want to have a baby? You can't possible be waiting for when you're 30+ to have a baby. How are you able to pay for all that?

And of course, all that is dependent on you , having a reasonable girlfriend who doesn't demand that you pay for all the expenses.

Yes, HDB is affordable, but the cost of living here is not. We do live a sad, debted life. No wonder we always complain "Money not enough"



KKS out.