Planning to buy a new condo or any other private property? This quite seems a big, unwinnable goal by most Singaporeans. The major reason behind this is the misconception that properties are unaffordable! Well! We are here to help you know the reasons why one can go for private properties and is actually affordable than you have ever calculated.
HOW CAN A NEW CONDO OR PRIVATE PROPERTY BE MORE AFFORDABLE?
Here are some reasons why a new condo or a Private Properties will be affordable than general calculations-
High leveraging and CPF leads to a low minimum cash payment
Most people in Singapore often spend their life fearing the cost of private properties, however, let us tell you that it becomes quite affordable with high leveraging and CPF. According to loan-to-value, the minimum mandatory cash down-payment is only 5%. For home banking loans, the total down-payment is 25% in which aside from 5% cash one can pay the remaining 20% using their CPF ordinary account (CPF-OA). With all these things, it doesn’t seem as difficult as you think to own a property in Singapore. There are many ways to get your savings goal with the help of loans.
Cooling measure for Singapore Citizens
For a Singapore citizen, there is no ABSD (Additional Buyers Stamp Duty) for the first home, and even that is very less for the second home which is 12%, and 15% for the third home.
Even, one can get a refund from IRAS in case you sell your first home in tenure of six months and you will be eligible for ABSD remission. ABSD has set a goal of keeping the prices lower in order to make it attainable for the locals.
In a lot of cases, upgraders play smart and sell their current home first and shift to a rental property! Meanwhile they start looking for a new private propertiess so that they can avoid paying the remissible ABSD.
ECs offer a great first step for owning a private property
The Executive Condominiums are launched by HBD for helping the buyers and helping them to get it cheaper and CPF grants for the buyers. ECs are full suite condos, built and managed by private developers. ECs become privatized after the 11th year, with a decent value. ECs are full suite condos, fully built by private developers.
Easy qualification for a bank loan
People mostly think that a HDB loan is easier to get. But here we are going to tell you something amazing! Yes, you can actually borrow twice as much using a bank loan! Passing the Mortgage Servicing Ratio (MSR) is imperative, when it comes for HDB loan grants. This makes you capable of a repayment maximum to 30% of your monthly income (not inclusive of other loans). On the other hand, for bank loans, you need only meet the Total Debt Servicing Ratio (TDSR), which caps your monthly repayments to 60% of your monthly income.
Let us tell you that this is not a similar scheme to DBBS, it is completely different from that! ECs are full suite condos, wholly built by private developers, equipped with all the amenities of a new condo, including pool, gym, BBQ pits, etc. However, when it comes to the comfort level, there is not much difference in both EC and condo.
Buy it with your Spouse
Lastly, the best idea is to loan a property with your spouse as a co-borrower. Buying with your spouse as co-borrower makes monthly repayments more affordable in Singapore! Such co-borrowing practice can drop the monthly repayment to somewhere around $1,100 a month each. To proceed for a deeper understanding, let’s assume a Singaporean’s median household income, which is around $9,293! This works out to roughly 25% of the monthly income of any working couple. As per such a basic calculation, it is affordable enough to think about the next savings plans and buying a private property!
Truth has been told that most people in Singapore overestimate the cost of private property. Home ownership might be a little expensive but not impossible as most people assume. We hope that with this blog you must have realized that private property is much more affordable than what you think. Getting in touch with experts, like us at Singapore Property Launches will help you get all the latest information on any new condo in Singapore, from our appointed developer sales representatives from several developers. All you get to know here will be about the best amongst all your searches!