The insignificant nobody me guess it's another case of SEMANTICS. Affordability & OWNING have differences in meaning....
Currently, an avg Condo costs at least $1.5 million. Banks will loan up to 75%, with balance 25% which can be used by CPF. The buyer will need no cash, except perhaps for stamp duties.
The monthly repayment will be est $4,700/mth at avg 3% interest rate. It seems high, but do consider that it is mostly newly weds whom will buy such condos, thus DUAL ownership & DUAL co-payment on the loan for 30 yrs - $2, 350/mth from EACH WHICH can be again offset by their CPF payments.
The avg salary of a Singaporean is between $3000 to $5000/mth.
Should the buyers of condo be confident, they would mostly lay in the higher range of $5000/mth. Thus the newly wed combined salary would be $10,000, with CPF contribution by them AND their employers amounting to $2,300/mth after deductions for medsave, etc. Thus they will need to fork out $2,400 in CASH to meet the bank loan payments, which is less than the 30% of their combined salary generally acceptable to be financially safe & stable.
While there may be changes in life due to social & environmental circumstances, ultimately, $10,000 COMBINED salary is only a starting career pay. Should one be hardworking & smart, pay increases is a reality.
Technically, a couple with combined starting salary of $10,000 will need 10yrs to afford a condo, to build up their CPF accounts to meet the 25% purchase amount. They can do it & start saving once they have graduated & secured a job in Singapore & prepared to work hard at their roles.
BUT for the life of the insignificant nobody me, I can never fathom why such couples would go for condos when HDB even executives flats, let alone 5 or 4 rm flats which are far bigger & are EASILY within their range with less financial pressures.....
