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Private Housing

Saw this advertisement in Singapore daily, 25 Feb 2012, newspaper. It is a Saturday and there is a total of 36 quarter page or larger advertisement. It is one of the many full page advertisement by their developer.

It is probably written to show how "affordable" these homes they are selling.

They highlighted the $58 per month.

The footnote mentioned that the combined household income of $10,000 - which is just about right - working couple of age 35. And that home owners can get a 1.5% 30-year fixed rate housing loans. Given that, the home will only be fully paid when they reach the ripe old age of 65.

The Monthly Installment is indeed $2,357.86 as calculated here. And the total interest paid over the next 30 years is $165,630. Which made the real cost of that home to be $1,019,630 (slightly more than a million Singapore Dollars).

So here are some affordablity questions for this million dollars home:

How could the couple obtain the first 5% downpayment of $45,000 in cash. The remaining 15% downpayment $125,000 for CPF or other source?

Can the couple at this age maintain their income, say $6,000 by the man and $4,000 by his wife for the next 30 years? Probably there is an increase in household income over the next 30 years, but only enough to cover inflation. When they reach fourty something, there is a possibility that they have peak in their career and some may even see a drop in pay as they are redeployed.

At the moment, property buyer in Singapore are smiling. Stories like these are all over... "A condominium bought for S$600,000 at the beginning of 2010 was reportedly sold at a profit of S$100,000 within 12 months." Statistically the numbers support these claims, as the value of private homes gave investors a real return of nearly 10% a year between for the past 5 years.

Update 1 March 2012: The same advertiser claimed that over the weekend they have sold 55 units of their last remaining 200 units of the 700 units development at the average price of $1,000 per sq. ft. Across Singapore, last weekend also generated a total of 350 units sold.

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Private Property Price Index 1975 to 2012

2015 Private Housing Ownership  Singapore vs Hong Kong

For SGD $800,000 (USD $600,000), a new 800sqft Executive Condo apartment with 95-year lease in Punggol Estate (North-eastern Singapore, 15km from Orchard Road).

For HKD $4,800,000 (USD $600,000), a new 400sqft private apartment with 48-year lease in Sha Tin (New Territories, 15km from Tsim Sha Tsui).

Updated On: 18.09.27