Tampines EC 'presidential suite' to be priced at $2.05m

[wsreader]

If a family that "owns several other private properties" is a "middle-class family", no wonder people start to believe there are no poor people in singapore.

[pianist]

Is it true that this family of 7 forms a household with total household income < $12,000? My guess is that most of them are still earning income. Does the $12,000 ceiling apply to the entire household or only one couple?

the news said the sister applied as a proxy for her returning sibling?
what kinda proxy arrangement is that?

[Musicwhiz]

If a family that "owns several other private properties" is a "middle-class family", no wonder people start to believe there are no poor people in singapore.

Well, at least now I know Singapore is redefining the meaning of "middle-class".

So in my case, without any investment property I can forget about calling myself middle-class!

[Big Toe]

First it is the under sized shoebox private apartments and now it's the over-sized EC.
The buyers living in the 300sq ft mickey mouse units must be wondering if are any class higher than the guys who bought a subsidized 4000+sq ft EC.

This country is making me feel like a very poor man.

[Musicwhiz]

A letter from a concerned reader....

The Straits Times
www.straitstimes.com
Published on Dec 31, 2012
$2M EXECUTIVE CONDO
Let public housing policy return to basics

IT IS not enough to suggest that developers should observe the intent and spirit of the executive condominium (EC) housing scheme.

If developers play by the rules to maximise profit for shareholders, then they cannot be faulted.

The real problem lies with the rules and the overall public housing policy, which is supposed to be about providing affordable public housing to the masses.

Over the years, the original intent and spirit of our public housing policy has been adulterated by variousinitiatives such as ECs, the Design, Build and Sell Scheme, the privatisation of HUDC flats, the Selective En bloc Redevelopment Scheme and so on, that have not only raised the prices of HDB flats but those of private properties as well.

It is time for a total review of our public housing policy and a revamp that will take it back to its original intent, particularly in the light of our growing income distribution gap.

I suggest a return to the single-mindedness of affordable public housing and the building of better Build-To-Order flats.

The income ceiling could be raised to include those who can qualify only for ECs.

It should not be the Government's business to help HDB owners speculate in the open market.

In fact, one-, two- and three-room HDB flats should be made very affordable and be non-transferable, with a sell-back scheme to HDB for the balance lease. These flats should have a shorter loan repayment period of 15 to 20 years.

As family sizes are getting smaller, this could address the essential housing needs of the lower income group for life.

If their financial situation improves, they can then choose to upgrade to a bigger flat or private housing.

This scheme will ensure better moderation of prices at the top, and will also serve as a fallback plan for the less well-off or those wishing to downgrade.

Yeow Hwee Ming

[greengiraffe]

http://www.tremeritus.com/2012/12/30/bus...m-ec-unit/

Businessman father helps young couple buy $2.05M EC unit
December 30th, 2012 | Author: Editorial

CityLife EC
It was reported that an executive condominium (EC) penthouse was sold for a record price of $2.05 million, about an hour after the project launch yesterday (29 Dec) (‘EC penthouse sold for record $2.05M an hour after launch‘).

A spokesman for the CityLife@Tampines project said the sale was made just after 11am, an hour after the sales office opened at 10am.

The buyers are a young married couple in their mid-20s. Apparently, the $2.05 million unit was mainly paid for by the man’s father, Mr Koh, a 56-year-old businessman.

Mr Koh said in Mandarin, “My son can’t afford it, he’s only a salaried employee.”

Mr Koh told reporters that he would pay the bulk of the amount. He said he owns several other private properties. The man’s sister said, “We’re just a middle-class family.”

Mr Adrian Teo, 40, who runs his own social media and marketing company, bought a 2,691 sq ft five-bedroom skysuite for about $1.5 million.

Housewife Tan Pei Ling and her husband, both 39, bought a 1,432 sq ft four-bedroom unit for $1.17 million. The husband is a teacher. Ms Tan told the reporter, “There is very good resale potential because of the MRT and upcoming Tampines Hub.”

She said they will finance the purchase with proceeds from the impending sale of her current property, a five-room HDB flat in Tampines which is already fully paid for.

Looking at data from HDB [Link], the median sale price of 5-room HDB flats in Tampines is roughly $536,000. Hence, at $1.17 million, on average, Ms Tan will have to raise another $600K+ for the new EC unit after selling her 5-room flat. She will no doubt have to borrow from the bank again and be in debt for the next 20 to 30 years.

ECs are supposed to be a public-private housing hybrid and were introduced to meet the demands of the so-called “sandwiched class” who do not qualify for public housing but find private property beyond their reach. As it is, ECs appear to be highly priced.

To qualify for an EC, the applicants’ average gross monthly household income must not exceed $12,000 under HDB rules. Taking $12,000 as household income, at $2.05 million, the Price-to-Income Ratio, otherwise known as the Affordability Ratio (i.e, price of the house over the annual income), is 14.2. Even at $1 million, the Price-to-Income Ratio works out to be about 7. The World Bank considers a ratio of 5 or under as affordable for local residents, while the United Nations have set the standard lower, at 3 (see also Link).

Anything above 5 is considered not affordable and a ratio over 10 is surely madness.

Unless someone has rich parents to help pay for the “unaffordable” ECs, most buyer will have to resort to borrowing from a bank, putting one in debt for 20 to 30 years. If there is a financial crisis and one loses his job or interest rate moves up sharply, and as a result, one defaults on the mortgage payments, the bank will have no mercy and move relentlessly to repossess the home. And if the money owed to the bank cannot be met after selling the house in the open market, the buyers will be bankrupted by the bank.

Let us not wish such a circumstance on anyone in Singapore.

Nevertheless, CityLife proudly announced that all the skysuites and penthouses were snapped up by noon, and by the end of the first day of launch, 65% of the units had been sold.

[arthur]

Unless someone has rich parents to help pay for the “unaffordable” ECs, most buyer will have to resort to borrowing from a bank, putting one in debt for 20 to 30 years. If there is a financial crisis and one loses his job or interest rate moves up sharply, and as a result, one defaults on the mortgage payments, the bank will have no mercy and move relentlessly to repossess the home. And if the money owed to the bank cannot be met after selling the house in the open market, the buyers will be bankrupted by the bank.

Let us not wish such a circumstance on anyone in Singapore.

Nevertheless, CityLife proudly announced that all the skysuites and penthouses were snapped up by noon, and by the end of the first day of launch, 65% of the units had been sold.

Its called social darwinism, whereby the social classes get even more segregated by how one's parents' financial positions are.

A young child born into a hawker family, a father who sells newspaper or simply works as a taxi driver would have a much harder time to climb up and get out of his existing social class status.
The 154th news articles that showed kids with scholarships with a taxi driver father is the exception, NOT the norm.

Starting with the amount of money paid for a premium kindergarden vs. a PAP one, that makes alot of difference to a kid's education, not to mention all the money to be thrown into the private tuition where a family with dual income graduates professionals can afford.

The media have to present such articles from time to time so as to reassure "daft" Singaporeans that YES YOU CAN! in spite of the reality out there.

Recall Wee Shu Min's "Get out of my elite, uncaring face" fiasco. This is what we are building up in Singapore.

Rich people would not give a damn about what I have written, except for the fact, the ever more distinct division of social classes will only lead to the early demise of the ruling party who wish to continue the status quo.

And there lies the big unknown who and how can Singapore move ahead in its "Corporate Goverance" in the latter part of 21st century.

[plguru]

with income capped at 12k per household, its interesting that these buyers can afford 2.05m for the penthouse..

[Musicwhiz]

with income capped at 12k per household, its interesting that these buyers can afford 2.05m for the penthouse..

I find it fascinating as well. Worthy of further research as to whether such households are truly over-extending themselves, or whether the flood of hot money is just flowing into our tiny little island to boost property prices further.

[plguru]

its either for those under declare income tax or those with rich parents most probably.. haha...

this might the reason too why the Forestville ec in woodland hold back the launches. if not generate too much public outcry.