Earn $1000 a month and you want to buy a flat?!

 

Only in Singapore…

Tears were shed by some, who lamented about the ability to buy flats for their parents in the future. Others raised their eyebrows when DPM Tharman made the point about the $1,000 income family being able to afford to buy a small flat. Online critics went to town to mock the im-possibility of this.

Well…

For a first time applicant, he can apply for a new 2-room standard BTO (Build-to-Order) flat in a non-mature estate. These flats are set aside for those earning $2,000 and below a month.

These households earning $1,000 can qualify for generous housing grants. Available to them are the Additional CPF Housing Grant (AHG) of up to $40,000, and the Special CPF Housing Grant (SHG) of up to $20,000. These grants could be used for the flat down payment. Total = $60,000

How much is a flat? Using the selling price of a new 2-room BTO flat in Fernvale Lea in Sengkang as an example, it is $100,000 (offered in the Jan 12 BTO exercise; the price range was from $83,000 to $112,000)

Deduct the $60,000. The applicant needs to pay $40,000.

With a loan for $40,000, repayment per month is as shown below:

– 30 years loan : $161/mth

– 25 years loan : $182/mth

– 20 years loan : $214/mth

For a young household headed by an income earner with a salary of $1,000 per month. He will have a total of $217 contributed monthly to his CPF Ordinary Account.

Monthly cash outlay = $0

This support for families enable them to move from rental to owning their own homes.

If they prefer to rent, rentals for those with income of about $1,000 is $90-123 for 1-room, $123-$165 for 2-room.

4300 of these 2-rm BTO flats have been built since 2006. More in pipeline this year. Situation is manageable.

Demand for rentals still remain high and we are increasing the building of rental flats. By 2012 we would have about 50,000 and waiting time would come down from 21 to 8 months.

This note will not be talking about the range of efforts undertaken for low-income Singaporeans. It is meant to explain about one aspect of housing. We have other initiatives to help, amongst which are transfers, job provision etc. Many of these are existing measures and new ones which this Budget 2012 addresses.

But I will just mention Workfare. If he’s aged 35-44, together with Workfare Special Bonus, he’d get $1,313 per year. If aged 45-54, $1,750 per year.

Miscellaneous Info for those interested in some data:

– The Average Monthly Household Income from Work among Resident Employed Households for the 1st-10th percent is $1,581 for 2011.

– 1 to 2 roomers comprise 4.6% of distribution of resident households.

– In Govt transfers, they receive an average of $3,270 per household member.

– Across the board, average household size is 3.5 For 1-2 roomers, average household size was 2.2

Key Household Characteristics and Household Income Trends 2011

An Inclusive Society…making it happen

Hdb Infoweb

Special Housing Grant

Additional Housing Grant

Help for low income families

ComCare Helping the Needy

TYPICAL 2-ROOM FLOOR PLAN APPROX. FLOOR AREA 47 sqm (Inclusive of Internal Floor Area 45 sqm and Air-Con Ledge)

 

Link : https://www.facebook.com/notes/tan-chuan-jin/earn-1000-a-month-and-you-want-to-buy-a-flat/338028739573241

 

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