Last week I had received a leaflet distributed by a housing agent company. The leaflet contained the recent resale prices for the HDB flats around my area. I was quite surprised when I saw the transaction prices for flats which are of similar type and location as mine. The price is doubled of what I had paid 7 years ago. Based on the “Rule of 72”, my flat has actually gone up by 10% annually for the last seven years.
Imagine buying a flat now rather than 7 years ago, I might be facing a lot more financial difficulties. Let's say my flat costs $400k now as compared to $200k when I bought it 7 years ago. In term of the down payment of 20%, I will need to pay $80k now as compare to $40k. Where can I find $80k outfront to pay for my down payment?
For the housing loan, I will need to loan $320k now as compared to $160K. With this huge loan of $320k, I can never think of clearing my loan earlier.
For monthly mortgage repayment of 30 years with 2.6% interest, I will need to pay $1281 now as compared to $641. A monthly mortgage of $1281 means that a couple must have a combined monthly income of at least $5570 in order not to use any cash for the mortgage repayment. This can be stressful to me and for my wife as we cannot afford to lose any of our jobs.
2 comments:
Wondering is this true for most HDB here? Mine also coming close to doubled. Bought in mid 2005 @ 170K, now units in my block transacting at around 300K.
HDB confirm earn one. But when estate is too old, prices get stagnant and may drop.
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