Why must pay cash when buying HDB flat !!!
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SINGAPORE : National Development Minister Mah Bow Tan has announced changes to policies concerning Singapore's property market in three major areas.
These are: easing the cap on bank financing for residential properties, limits on the use of the CPF for property purchases, and restrictions on foreign ownership of land and properties.
On mortgage and financing policies, the financing limit for housing loans will be raised from 80 percent to 90 percent of the property value.
Mr Mah said the remaining 10 percent, which the buyer has to pay, would deter over-borrowing and minimise potential losses by banks as a result of borrower default.
HDB will also raise the loan limit for its flat buyers from 80 to 90 percent.
This takes immediate effect and will apply to all properties bought from Tuesday.
Also with immediate effect, the cash payment for private residential properties will be lowered from 10 percent to five percent.
From January next year, the cash requirement for HDB flats financed with bank loans will also be adjusted to five percent, down from ten percent.
Mr Mah said these changes would give consumers a wider choice of financing options when buying a property.
In a ministerial statement in Parliament on Tuesday, he stressed that the purpose of the measures was neither to boost nor depress the property market.
Rather, the review was aimed at improving structural rules to improve the functioning of the market and to better achieve broader economic and social objectives.
Mr Mah, however, cautioned that some of the measures introduced would have a positive effect on the market, while others might have a dampening effect.
And the net effect would depend on many factors beyond the measures announced.
On the use of money from the Central Provident Fund, Mr Mah said buyers could use their CPF to buy residential properties with shorter leases of between 30 and 60 years.
Restrictions on foreigners buying property are also being eased.
Mr Mah said the government would remove the restriction on foreigners owning property in apartment blocks of six floors and below, but will still require foreigners to seek approval for purchases of landed properties. - CNA/de/al -
Aiyoh.. you dun know meh? There has always been cash portion involved in the purchase starting a couple of years back. Garmen trying to make HDB like private developer mah.
Actually makes you wonder on the role of HDB which is totally lost in recent years.... just to refresh, this is their role copied and paste from their website.
Providing Affordable, Quality Homes
As the public housing authority, HDB plans and develops public housing towns that provide Singaporeans with quality homes and living environments. In so doing, HDB also engages in active research and development work to ensure that cost-effectiveness and quality standards are maintained and continually improved on in the provision of HDB homes.
Ensuring Vibrant Towns
Even as HDB towns are provided with various commercial, recreational, and social facilities and amenities for the convenience of residents, one of HDBÂ’s key priorities is to ensure that they meet needs and changing circumstances. Therefore, through renewal and upgrading programmes, HDB brings new features, facilities, and improvements to its older estates and towns to ensure their vibrancy and continued relevance.
Focusing on the Community
A key priority of HDB is the building of cohesive communities within its towns. Hence, living environments are provided with community spaces for residents to mingle and interact. Public housing policies and schemes are formulated not only to meet changing needs and aspirations, but also in support of national objectives such as racial harmony, stronger family ties, and focus as well on sectors of the population in need of specific attention such as the elderly and those who may be in financial difficulty. And with a network of branch offices islandwide, HDB ensures that it is well-integrated in the daily lives of the community it serves. -
they change rules more often than we change jobs.
knn. -
The thing is that since the cap of bank loans has been rised to 90%, instead of the current 80% means people will have to pay interest and the loan back to tha banks.
Singaporeans are already one of the highest in the world in terms of unpaid debt. If this scheme goes ahead, housing monthly payments will get more expensive, instead of getting cheaper.
Lets put it point by point:
1) HDB flat prices are already overinflated by the govt.
2) So people, especially baby boomers, have to use CPF and bank loans to put down the deposit for the HDB flat.
3) Baby boomers already will have less CPF savings because of above said point.
4) They will be in great debt in the current scheme already as the economy isn't doing well and because of that they are getting paid less.
Now...with the new scheme:
1) People can borrow more money from the banks and also use CPF money- instead of just cash.
2) Catch? More bank loans means more interest to be paid. Banks will also want you to repay the loans itself. If the monthly payments aren't paid up regularly, they will impound your new house. They might even make you bankrupt.
3) 2nd catch? CPF funds for each buyer will be depleted even more. This CPF money is for your retirement. If you use it more just to pay the deposit for your HDB flat, it means you will have less retirement money in the future.
So the end result for most ordinary pple is this: you will not benefit because this policy is more for the rich and foreigners. The banks and property agents will be happy because they have more money from guillable property investors- all of them small timers and have bigger risks in getting screwed if they are not financially stable now.
In the end, if you struggle to pay off your debt now, this new scheme will make it worse. It won't ease your financial strain because it will only increase your amount of debt- not just now but in the future when you grow older.
Foreigners also don't go through the stringent measures that the govt imposes on locals. Just see the other part regarding foreigners.
In short, this scheme will not spark a real recovery of the property market here and will only put more ordinary singaporeans into more debt. The country will suffer more for this as the middle class and poor income families are the foundation of Singapore. if this groups fail, then any economical recovery is at best marginal and artifical. -
ya lor so flicker minded .. dun know they know wat they doing or not ..Originally posted by dragg:they change rules more often than we change jobs.
knn. -
Sounds like a "I'll give you panadol to help you for a while but I cannot stop the pain"
Yeah I mean in the short-term some people might prefer this new policy because it means less cash outfront before they can buy a property, long-term means you pay more interest and is debt-ridden for a longer time, exposing yourself to mroe financial pit-holes.
Definately a panadol solution......... as usual -
but do u think bank loan interest rate will go up. wanna refinance my house.
what are ur take on floating and fixed loan rates?
im aware the interest rate will go up and the feds might be raising key fund interest rates to 4.25 by year end...
im just wondering how the banks here will react as our economy is less inflated than the US and even if local bank carry on increasing rates, it may not be as much as the US. im think of taking on floating rate from maybank coz they offering 1.28 first yr, whereelse the cheapest fixed rate i know is ABN which is 2.8 i think for first yr. abn has locked in of 2 yrs, maybank none. if loan rates not going to rise for more than 2 % in the next 1 yr, maybank seem a more viable choice, after all we finance every 2 yrs.
but im not sure if i take floating rate is the right choice...
i refer u all to this
http://newpaper.asia1.com.sg/columnists/story/0,4136,89854,00.html -
last time if below valuation dun need to pay cash. now no matter wat must come up with cash. if ppl want to downgrade because of financial difficulties where are they going to find the money ?Originally posted by ndsef:Aiyoh.. you dun know meh? There has always been cash portion involved in the purchase starting a couple of years back. Garmen trying to make HDB like private developer mah.
Actually makes you wonder on the role of HDB which is totally lost in recent years.... just to refresh, this is their role copied and paste from their website.
[b]] -
Does this change of heart by the Minister of National Development to help Singaporeans, or to help themselves ?
Surprisingly, there exist at least 15,000 HDB flats that have remained unsold, and this is largely due to the inflexbile policy of the Government in HDB pricing.
While Private Homes have lost its value by more then TWENTY to THIRTY Percent, the prices of HDB homes has increased by more then FIFTEEN Percent - or if the prices do not increase, the unit floor area has shrunked by at least TWENTY Percent.
No wonder the Minister is so generous as to allow "unrelated" Singles to purchase HDB flats, and allowing loans of up to NINETY Percent.
In the process, is he trying to make Life more "gay" for Singaporeans ?
Read the following article for further insight into Singapore Government's predicament with HDB Building Program, which they have got themselves into.
http://www.singapore-window.org/sw02/020303st.htm
http://www.singapore-window.org/sw04/040307st.htm
http://www.singapore-window.org/sw03/030710fe.htm -
The PAP has fouled things up in the property market with their actions, especially since the 90s when things started to change- and when they couldn't because they were so deep-rooted in their old thinking.
So although this policy may look nice at the first impression, the details don't look good- especially, as I said, for the middle class and the lower income ones. The ST said that people will have 'more cash' to purchase their dream houses and flats- but the 'cash' doesn't belong to the people. It belongs to the bank. CPF is also their retirement fund for the future.
So eventually bank loans has to be repaid, CPF savings will be reduced. CPF rates have already been reduced from 20% to 16% while basic pay and bonuses have also been reduced. HDB flats resale value for certain flats are also dropping. In addition, the economy is stop-starting while the economicies of other countries in the region are also being marked down due to high oil prices etc.
So as income per capita is reduced across the board and as the world economy remains sluggish, expenses, interest rates and taxes are increasing across the board for the middle class and lower income ones. So this scheme, as I said, will only worsen the increasing problems of the said groups I'd mentioned.
So will people owe more houses in this scheme? The answer is yes- but at a huge expense. It will put families deeper in the red, rather than in the black. It will put them in a bigger risk of defaulting on their bank loans- thus increasing their chances of getting bankrupt in the future. It also endangers their retirement plans in the future(when things will get even more expensive as compared to now).
In the end, at best the economy will recover- but it will be marginal and artifical. At its worst, huge public debt will weigh heavily on the economy itself and with oil prices going up everyday, the economy will remain sluggish in the near and possibly long-term future.
It isn't looking rosy at all. -
If I am not wrong, last time allalong have this ruling..
But those days was 20% cash payment -
for newly wed couples, purchasing their first place, they could have 10% cash payment n 10% to be paid off via cpfOriginally posted by sbst275:If I am not wrong, last time allalong have this ruling..
But those days was 20% cash payment -
Yah horOriginally posted by shinta:for newly wed couples, purchasing their first place, they could have 10% cash payment n 10% to be paid off via cpf
My daddy was saying, hiya why ppl grumble... Last time cash downpayment lagi heavy -
when is your last time ? 30 years ago ? your lao pei is rich thats why he dun mind.Originally posted by sbst275:Yah hor
My daddy was saying, hiya why ppl grumble... Last time cash downpayment lagi heavy -
it is from CPF. now 5 % is cash from your wallet/bank.Originally posted by sbst275:If I am not wrong, last time allalong have this ruling..
But those days was 20% cash payment -
cash not cpf..Originally posted by crazy monkey:it is from CPF. now 5 % is cash from your wallet/bank. -
Amen to Singapore property.
The rich (49,000 of them) will get richer, the average and the poor will get poorer.
I hope the MLMers will help to do their part by continueing educating people with their Rich Dad Poor Dad book on that a HDB is never an investment but always a liability.
With the foreseeable increase in commercial property rental price, I wonder how much the employer CPF contribution will be cut? It is already 13% now. Better budget for 0% employer CPF contribution.
For a forecast of what Singapore will be few years from now, ask the Hong Kongers in www.icered.com. See how much they complain on their increasing property prices.
After the peanuts fiasco, another MONEY problem... hai...sigh...
Who is planning to migrate? -
previously 20% is cpf above valuation is cashOriginally posted by shinta:cash not cpf.. -
Just look at who are sitting at the top of the local banks (except UOB) and you will see the reason for changing the policies.Originally posted by crazy monkey:previously 20% is cpf above valuation is cash -
but i checked the site a couple of mths ago n thats what they saidOriginally posted by crazy monkey:previously 20% is cpf above valuation is cash
anyway..
HDB suckz
resale need to pay cash new flats need to pay cash cum cpf
i where got so much money? den not enuff place to slp at home.. dun get married lar~
imagine hor.. married liao still have to share room with ur other half n ur siblings
no wonder birth rate is declining
n no wonder ppl are waitin for a few years before they get married to save up enuff money
by the time i have enuff money to pay off the 10% cash n 10% via cpf i'm at least 25... n den save up for reno.... i 30 years old le...
argh!!!!~!~!~!~!!!!~!~!~!!!~!~!~!~!!!~!~!~!!!!~!~!~!!!~!~!~!!!!!!
no need to have babies liaoz..
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If you save enough money, MIGRATE! Why waste it in Singapore?Originally posted by shinta:but i checked the site a couple of mths ago n thats what they said
anyway..
HDB suckz
resale need to pay cash new flats need to pay cash cum cpf
i where got so much money? den not enuff place to slp at home.. dun get married lar~
imagine hor.. married liao still have to share room with ur other half n ur siblings
no wonder birth rate is declining
n no wonder ppl are waitin for a few years before they get married to save up enuff money
by the time i have enuff money to pay off the 10% cash n 10% via cpf i'm at least 25... n den save up for reno.... i 30 years old le...
argh!!!!~!~!~!~!!!!~!~!~!!!~!~!~!~!!!~!~!~!!!!~!~!~!!!~!~!~!!!!!!
no need to have babies liaoz..
Your kids will thank you for a less stressful and a more fun childhood. You and your other half will get a car EACH. You will be staying in landed proerty with your own garden. The husband has no need to go back for reservist.
Amen -
That is only for bank loan lah.Originally posted by shinta:but i checked the site a couple of mths ago n thats what they said
anyway..
HDB suckz
resale need to pay cash new flats need to pay cash cum cpf
i where got so much money? den not enuff place to slp at home.. dun get married lar~
imagine hor.. married liao still have to share room with ur other half n ur siblings
no wonder birth rate is declining
n no wonder ppl are waitin for a few years before they get married to save up enuff money
by the time i have enuff money to pay off the 10% cash n 10% via cpf i'm at least 25... n den save up for reno.... i 30 years old le...
argh!!!!~!~!~!~!!!!~!~!~!!!~!~!~!~!!!~!~!~!!!!~!~!~!!!~!~!~!!!!!!
no need to have babies liaoz..
If you are still eligible for the HDB loan, you still can pay all your downpayment via CPF, and that will be 20% of the valuation.
If you are not eligible for HDB loan, then I think you must be loaded and the 5% cash is peanuts.
So don't worry, go ahead to get married now. -
initial plan was 10 % cash 10 % cpf which HDB has been implementing quietly by adjusting the cash ( in your bank account ) by 2 % each year until they reach 10 %.Originally posted by shinta:but i checked the site a couple of mths ago n thats what they said
anyway..
HDB suckz
resale need to pay cash new flats need to pay cash cum cpf
i where got so much money? den not enuff place to slp at home.. dun get married lar~
imagine hor.. married liao still have to share room with ur other half n ur siblings
no wonder birth rate is declining
n no wonder ppl are waitin for a few years before they get married to save up enuff money
by the time i have enuff money to pay off the 10% cash n 10% via cpf i'm at least 25... n den save up for reno.... i 30 years old le...
argh!!!!~!~!~!~!!!!~!~!~!!!~!~!~!~!!!~!~!~!!!!~!~!~!!!~!~!~!!!!!!
no need to have babies liaoz..
i dun understand why HDB is so "low-profile" in implementing this change because a lot homeowners are not aware of it.
the hardest hit are the downgraders who have difficulty coming up with the money.
5% seem to be a compromise now that GE is round the corner.
but considering an average 4-room flat cost $200 k it would be $10,000 if a family has financial difficulties they would have problems. why cant the downpayment be made out of cpf ? its our money also. -
there is a group of ppl, who we call parents..Originally posted by Cindyfeh:If you save enough money, MIGRATE! Why waste it in Singapore?
Your kids will thank you for a less stressful and a more fun childhood. You and your other half will get a car EACH. You will be staying in landed proerty with your own garden. The husband has no need to go back for reservist.
Amen -
Originally posted by Agressor:That is only for bank loan lah.
If you are still eligible for the HDB loan, you still can pay all your downpayment via CPF, and that will be 20% of the valuation.
If you are not eligible for HDB loan, then I think you must be loaded and the 5% cash is peanuts.
So don't worry, go ahead to get married now.all loans i no money to take cos i no money in cpf n saving acc
imagine ar.. i earn enuff to eat