Are HDB Flats Affordable?

[kazukirai]

Bro.

The one single prob about the save and invest wisely part is with current housing price, you can bet the returns will be far smaller and the opportunity cost of doing other things with that "market subsidy" value you paid would be far greater.

Somehow I think its a govt ploy to lock a couple down with such exhorbitant pricing.
Sure the older generations are laffing all the way to the banks, but their profits will come from their children and grandchildren.

Talk about karma.

Cheers.

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Hi Arthur-san,

I agree with your point but the thing I wanted to say is that I think for many people, and this is really just the impression I get from reading of blog, forum posts as well as news articles, is that many people are pretty fixated on buying a house and when they stretch themselves to afford one or can't afford one, they start blaming the government.

Maybe I'm naive but let's say I decide that my allocation to housing as a percentage of my income be 25%. If the monthly instalments to buy a place exceed that, couldn't I (a) rent a house or (b) rent a room or © continue staying with parents first till either (a) my income/wealth increases to that suitable level or (b) property prices come down?

I know I'm going to get a lot of brickbats for saying something like this and people are going to say stuff like "renting isn't cheap either" or "How to start a family when I don't even have my own place?" but I'm not sure ranting against government policies is going to help either.

When it comes to housing, I'm reminded of how my grandfather bought the first house he still lives in till this day. At that time, he had 5 young children, held a very low-paying job (after all he didn't even finish Primary school) and didn't even have the money to pay the downpayment which had to be made in 2 weeks. So, what he did was borrow money for the downpayment and took on two extra jobs in order to make the monthly payments and ends meet.

Did he stretch himself by buying a place he couldn't afford? Probably. But did he blame anyone for the choices he made? No, he didn't. Times have changed and the nature of the property market has changed as well so it's probably meaningless to make a comparison of prices and policies now and then. However, the important lesson that remains is one of self-determination.

PS: I'm not saying that the government is doing a good job. But rather than count on their charity, I rather count on myself.