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Thursday, April 7, 2011
That dream condo for HDB upgrader is becoming just that... a dream?!
The Strait Times today ran a special report on the dilemma of HDB upgrader trying to buy that suburban condominium home: Standing in the way is the double whammy of record prices and cooling measures by the Government, which have made it more unaffordable and riskier for these buyers to leap into the private market.
The situation along Bedok Reservoir is perfect illustration of the problem facing HDB upgraders, given the rapidly rising condominium prices around the area.
Accordingly to property consultancy DTZ Research, seven in ten buyers of private homes in the first quarter of 2009 were HDB upgraders - the highest number since the 86% figure achieved in the second quarter of 2002.
But by last year, the number had halved to about 3.5 buyers out of 10. The proportion has remained about the same in January and February this year.
And if private property prices continue to climb in the following months, the figure may dip even lower...
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I am one of the HDB upgrader hoping to upgrade to EC. Private properties are beyond my means that was so that I have thought not until I visited several EC showrooms. The price for EC easily starting from 700psf+ and to make it more more difficult, those with an outstanding mortage loan can only take up new loan up to 60% which means one needs to have 40% of downpayment. If some still thinks they can afford probably by selling existing HDB home and use the proceeds to offset for downpayment. Well, one needs to sell his existing home and stay put elsewhere whether stay with relatives or rent a place for 3 years at least till the new properties is ready for move in. 36months of rental will add in to the total cost of upgrading. Is it still worth to upgrade?
ReplyDeleteHi Mayhem: We do empathize with your situation, especially when there seems to be no light at the end of this "bull" of a property cycle (yet). Our advice is always "buy within your means", as we have seen one too many cases of people who stretch themselves too thin - all in the name of upgrading or investment. There is a line of thought these days that one should take advantage of the low low interest rate, which makes the monthly loan repayment that much more affordable. However, such low interest rate will not last forever, while a housing loan is a long-term committment. So once the interest rate reverts back to the 3 - 4% that we used to see prior to 2009, alot of people may find themselves in trouble.
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