The debt servicing is the new enslavement. Besides the rich who are making money from flipping and rentals, the workers are enslaved to debt for a long time. Looking at 2 real cases that I came across recently.
- mid 30s, upgrading from previously bought HDB (and in the process, paying credit bills with HDB cash profits) to a condo with 1 million loan. New loan tenure is 35 years, couple monthly income estimated at $12,000 per month, with no kids.
- early 30s, bought 1st HDB resale flat, est purchased price around $450,000. Loan tenure unknown, estimated at least 25 - 30 years. Combined income estimated $10k - $12k per month. With car prices hovering at 100k, this young couple are already in debt of $550,000, even before they start having kids.
around 10 plus years ago, new HDB units for young couples could be purchased at $200k to $250k for a 5 room unit. with a conservative 2nd hand car bought under 50k, the loan exposure was only $350,000. Clearly new property prices have made it much easier for young couples to become bankrupt, especially more so if they indulge in shopping and dining lifestyle fueled by easy bank credit.