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Can I still afford a HDB flat?

sgmatters.com can i still afford a hdb flat can i still afford a hdb flat 1

Someone said that young graduates used to aspire to a 5-rm flat but now they can only afford a 4-rm flat. And a poly grad used to aspire to a 4-rm flat but now, they can only afford a 3-rm flat.

When I was a young graduate, I was realistic of my financial ability and went for a 4-rm flat. I didn’t head straight for the largest size because I felt more comfortable with the mortgage for a 4-rm flat.

Affordability, my friend, is finding the flat that you can afford and adjusting your expectations.

HDB does provide a wide range of flats for different budgets and to meet the different aspirations of Singaporeans. This explains the difference in prices of same size BTO in different estates. One cannot compare a 5-room BTO with unique features to a 5-room BTO elsewhere or in a non-mature estate. 

BTOs are priced not only according to location, and amenities around them, they are also priced according to their individual features and characteristics.

Central Weave in AMK, for example, has recycling chute which makes for better, more efficient and convenient recycling, and a beautiful environment which includes the ABC (active, beautiful, clean) waters feature.

These are BTOs. No kidding. BTOs are priced not just according to location and amenities but also according to their individual features and characteristics.

The perception that HDB is unaffordable is – unfortunately – being perpetuated by the focus on the most expensive, high end range of new BTOs as well as a very small percentage of resale that have gone for a million dollars.

This creates unnecessary anxiety for people who may not be aware that there are other choices available.

To put in perspective, flats that are sold for at least $1 million made up only 0.3 per cent of total resale transactions this year, National Development Minister Desmond Lee revealed in Parliament on Wednesday (Oct 14).

One must remember that affordability does not mean having all our expectations and desires met. It means adjusting our expectations to fit our financial ability. 

Our parents and grandparents have been doing that. Like my mother used to tell me, if you cannot afford a 5-room flat, go for a smaller flat, and upgrade later when you are able to. The older generation has wisdom borne from living in tough times where they often had to make choices and sacrifices. 

Overall, public housing is still affordable. This affordability is seen in close to 90% of first-timer families who are able to service their home loans with their CPF, with little or no cash payments.

Central Weave, despite their high prices, is oversubscribed many times for the larger 5-room and generational flats.

Clearly, many are able to afford these flats even with HDB’s income ceiling eligibility criterion.

The following tables show the affordability of new BTOs that were launched this year. 

New 4-room BTOs 2022. A comparison of prices with and without grants in mature and non-mature towns.
sgmatters.com with resale btos going for 1 million can i still afford a bto with resale btos going for 1 million can i still afford a bto 2
New 3-room BTOs on offer this year (2022)

Even for the low income earner, a new BTO is still within reach, made possible by a maximum grant of $80,000. Take note that this grant stays with the home owner even when he sells his flat later on. It is money deposited into his CPF account and becomes part of his CPF savings. It is literally a gift from the government, a form of wealth transfer to help those with less. 

A 2-room flat in a non-mature town costs as little as $17,000. It is definitely affordable. 

sgmatters.com can i still afford a hdb flat can i still afford a hdb flat
Prices of new 2-room BTOs launched this year (2022)

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