New HDB 3room flats the solution to large mortgages

[theDoors]

Actually the simplest solution to current high prices of HDB flats, is not to reduce the pricing, but simply to build more 3 room flats as primary flat type instead of the 4 room flat type. A new 3 room flat type is currently priced at $180k which is within the recommended mortgage size of 3 times the annual salary of an household.

Currently, only households with income below $3000 is allowed to purchase 3 room flats.

Perhaps, this should be reviewed, raising the income ceiling for 3 room flats and building it as the primary flat type for the median household income of $5000, this should set a comfortable buffer for mortgage payments.

Households earning more than $6500, will qualify for HDB 4 room purchase.

Households earning more than $9000, will qualify for HDB 5 room purchase.

The exsisting HLE (Housing Loan Eligibility) can thus be modify to be a tool for income assessment for what flat types to qualify for.

http://www.singstat.gov.sg/pubn/papers/people/op-s15.pdf

FSA to cap mortgage borrowing
FSA to cap mortgage borrowing - Telegraph

Homebuyers will be prevented from borrowing more than three times their annual salaries under new mortgage rules to be announced this week.

By Rosa Prince, Political Correspondent
Published: 9:00AM GMT 16 Mar 2009

Lord Turner: FSA to cap mortgage borrowing
Lord Turner, chairman of the Financial Services Authority, will also declare a ban on 100 per cent mortgages Photo: JULIAN SIMMONDS

As part of a wide-ranging package of announcements for banking regulation following the near-collapse of the financial system, Lord Turner, chairman of the Financial Services Authority, will also declare a ban on 100 per cent mortgages.

In all but the most exceptional circumstances, it will become "normal practice" again for loans to limited to a maximum of three times the borrower's salary.

 

[theDoors]

Based on new 3 room flat cost $180k

Down payment 10% 18k
Loan $162k

30 year mortgage (360 instalments)

Loan Summary

$648.55
Monthly Principal & Interest

$233,478.12
Total of 360 Payments

$71,478.12
Total Interest Paid


Based on new HDB 4 room costing $300k

10% Down payment: $30k
Loan amount: $270k

30 year mortgage (360 instalments)

Loan Summary

$1,080.92
Monthly Principal & Interest

$389,130.20
Total of 360 Payments

$119,130.20
Total Interest Paid


It will take a family with household income of $4000 1 year 7 months to accumulate the required $18k down payment for the 3 room flat.

It will take a family with household income of $4000 2 year 8 months to accumulate the required $30k down payment for the 4 room flat.

 

[slohand2]

Good point there.... cant agree more.
If the HDB can stop using income to gauge a buyer's eligibility, and build more entry level flats then the situation wont be what it is today.

I read today tht they will scrap the siblings rule. What a copout way to deal with a National issue.

 

[johnny333]

Where to put the kids & grandparents

I think a better long term solution is to kick the PAP out, it'll make things cheaper

 

[Getloud]

If you are debt free and/or living comfortably, you will have time to think how to 'FIX' PAP, which they don't want.

 

[soIsee]

If you are debt free and/or living comfortably, you will have time to think how to 'FIX' PAP, which they don't want.

Precisely.

But with ppl like TS, he is too moronic too see this.

Peasants are to be kept indebted and at best beholden, to the housing master for the rest of their lives.

 

[annexa]

Why don't TS ask them to increase flat size or reduce flat price?

 

[Cestbon]

Simplest solution is to built more flat regardless thge size 2/3/4/5/EC to flood the market.
Continue to built every year 20k~30K unit. Until over supply then release all the unsold unit to Single above 30s that will solve the unsold extra unit. If still have the supply then release to all married PR then single PR . I sure all unsold flat will sold out within 6 month.

 

[johnny333]

If you are debt free and/or living comfortably, you will have time to think how to 'FIX' PAP, which they don't want.

With more Sporeans unemployed the PAP formula of beggaring the masses won't work anymore. Now there are alot of angry unemployed Sporeans out there looking for someone to blame

 

[Getloud]

With more Sporeans unemployed the PAP formula of beggaring the masses won't work anymore. Now there are alot of angry unemployed Sporeans out there looking for someone to blame

Either be a Quitter or vote them out, or the cycle will never end.

 

[borom]

Simplest solution is to allow ONLY CITIZENS TO BUY PUBLIC HOUSING (new or reslale,including EC)

If PR's want to buy HDB, let them take up citizenship-what's so difficult about that. Don't want to be citizen,fine-buy condo.

 

[Cestbon]

Simplest solution is to allow ONLY CITIZENS TO BUY PUBLIC HOUSING (new or reslale,including EC)

If PR's want to buy HDB, let them take up citizenship-what's so difficult about that. Don't want to be citizen,fine-buy condo.

If all PR buy condo. Later peasant KPKB low class 2nd class citizen. All PR stay in Condo or high end property.
Best of all is built more HDB flat to solve the problem not taichi here and there.
If the gov/PAP fault for under estimate the demand. For the year 2003~2008 there actually near ZERO unit HDB is built. But gov/PAP keep on approving PR. Sure after few year PR make saving they start to buy flat.

 

[zhihau]

For the year 2003~2008 there actually near ZERO unit HDB is built.

MBT was waiting for Punggol 21 to ferment then?

 

[gerard126333]

If all PR buy condo. Later peasant KPKB low class 2nd class citizen. All PR stay in Condo or high end property.
Best of all is built more HDB flat to solve the problem not taichi here and there.
If the gov/PAP fault for under estimate the demand. For the year 2003~2008 there actually near ZERO unit HDB is built. But gov/PAP keep on approving PR. Sure after few year PR make saving they start to buy flat.

Bro, as u mentioned in your earlier post, even S'pore citizens who are single are not allowed to buy direct from hdb unless joint singles.

 

[palden]

Allow citizens to own 2 HDB flats so they can rent 1 to FT and get passive income. In this way, the influx of FT also benefit citizens.

 

[Conan the Barbarian]

Build kennels better, so much cheaper. Whatever happened to those years
where the government wanted us to have more space, and build more EAs
and mansionettes for the masses at reasonable prices.

The solution is to provide better housing at cost price so that all citizens can
afford to have a better life. Not to keep reducing the size of the apartments
so that people will find them more affordable.

So in future when the price of flats keeps escalating to $1000 per sq feet, do
we build 180 sq feet apartments and sell it at $180K?

 

[Received_by_Kings]

Yes, more of those 3-room flats should be built for the locals as well as the talented foreigners so they could be adequately housed also these new recurring constructs are something they could much better afford with little problems.

 

[dysentry]

the popularity of shoebox apartments justifies the need for more 3-rm flats. alot of singles around fighting for 3-rm flats as well.