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doraemon88

Cov - Where Is It Heading?

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a $10,000 increase for a 25 year loan will mean an increase in cost for buyer of $12,800 (@ hdb loan rate)

spread out over 25 years, only $43 a month.

no wonder people think its ok.

My perspective:

Assuming couple's income is $8k, monthly cpf to ordinary account = $1,840 (young couple)

A $10k increase --> $12,800 --> 7months of cpf contribution.

So the couple needs to work an additional 7mths for their house for every 10k price increase.

So here's the calculation:

20k --> 14mths

50k --> 35mths (nearly 3years)

Now it doesn't look as cheap or as OK anymore right?

:P

 

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My in-laws recently bought an AMK 4-room, 11th floor, upgraded, good amenities nearby, windy... for S$423K. Valuation was S$400K, COV at S$23K. We're pretty pleased with the purchase. When we first saw the unit, it was valued at S$390K but the asking was S$60K COV (did not budge even with a S$50K offer).

So I guess in this case, while the valuation inched up slightly, we still "saved" by waiting a few months. Think the owner got down to earth after the new measures were announced and the offers of high COV disappeared, and his time was running out (as their new HDB flat was arriving soon).

$423K? Valuation goes up again? Just last year, one nearby my parents unit is selling @ $380k. Woah.... den my parents should have reconsidered to sell and buy one studio flat or stay with me. At least they keep this profits for their retirement. They bought @ 80k.

 

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Yeah, I thought the valuation was high too, as it was S$390K when we first saw it. And for a 31-year-old flat requiring complete renovation. But the timing was just right for us as my in-laws needed to move out of their existing place by April next year so we couldn't delay it too long. Also, we really liked everything about the apartment - it's windy, has an unblocked view, high floor, nice unit number... we're pretty pleased with the purchase.

citygirl, glad that in-laws get their unit they liked. That area is very convenient (10 minutes away from AMK Hub and CTE), equipped with abundance of amenities and so many schools. Too good to be true. :D

So are you staying with them in future?

 

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$423K? Valuation goes up again? Just last year, one nearby my parents unit is selling @ $380k. Woah.... den my parents should have reconsidered to sell and buy one studio flat or stay with me. At least they keep this profits for their retirement. They bought @ 80k.

Hehe you must first check if your wife mind staying with parents anot? :P

 

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and they forget about CPF contribution is not always @ 20% + 15%

It drop as age goes by.

It take longer loan 30 yrs or more. Finish loan at 60yrs old or more.

On the surface, CPF contribution is 35% until 50 yrs old ; 50 -55 yrs old is 29% ; 55-60% is 20.5%

Once pass 50 yrs old, the CPF contribution drop 6% then further another 8.%

At that age, can you still can maintain your pay?

Another point to note. 35% CPF contribution. The contribution to OA, SA and MA changes

< 35 yrs old, 0.6667 of the ratio goes to OA

35-45 yrs old, 0.6088 of the ratio goes to OA

45-50 yrs old, 0.5509 of the ratio goes to OA

50-55 yrs old, 0.4562

55-60 yrs old, 0.575

60-65 yrs old, 0.28

>65 yrs old, 0.1

Do a simple math. If the contribution is 35% , $1575 (is the max for 1 person, salary cap @ $4.5k)

< 35 yrs old, 0.6667 = $1050.05

35-45 yrs old, 0.6088 = $958.86

45-50 yrs old, 0.5509 = $867.67

contribution for 50-55 yrs old drop to 29% , $1305 (salary cap $4.5K)

50-55 yrs old, 0.4562 = $$595.34

contribution for 55-60 yrs old drop to 20.5% , $922.50(salary cap $4.5K)

55-60 yrs old, 0.575 = $530.44

contribution for 60-65 yrs old drop to 13% , $585(salary cap $4.5K)

60-65 yrs old, 0.28 = $163.80

contribution for >65 yrs old drop to 10.5% , $472.50(salary cap $4.5K)

>65 yrs old, 0.1 = $47.25

 

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and they forget about CPF contribution is not always @ 20% + 15%

It drop as age goes by.

It take longer loan 30 yrs or more. Finish loan at 60yrs old or more.

haha...i thought more people should be aware of the pitfalls... good to hightlight!

so i suspect that u have done a spreadsheet to compute your finances as well? :P

 

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If really wanna calculate the list goes on n on..how much can u calculate for a deal that last 99yrs only. even that if u bought brand new.. :D

Not wrong to suggest a more detail and prudent financial planning. It is just dreadful to know that some don't even know the kind of commitment they had taken up. Rem we dont work for 99 years, work span of a person is always limited. Whereas if we over commit and dumping in high COV + high valuation like no body business. We are basically stepping onto a mine field; stepped on it will left you ultimately in pieces or with few pieces missing. :unsure:

 

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If really wanna calculate the list goes on n on..how much can u calculate for a deal that last 99yrs only. even that if u bought brand new.. :D

of cos need to calculate...its the single biggest commitment financially... HDB also force people to calculate by using the HLE... Banks also grant loans by calculating your income and expenses.

anyway where got 99years thing....max loan is till ur retirement age...

i would be very surprised if someone buys a house without doing some form of budgeting. The extend of budgeting depends on individual though.

 

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citygirl, glad that in-laws get their unit they liked. That area is very convenient (10 minutes away from AMK Hub and CTE), equipped with abundance of amenities and so many schools. Too good to be true. :D

So are you staying with them in future?

Thanks, it is indeed very convenient. No, not staying with them as we have our own place. And it's so hard to live with in-laws! :P

 

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Yishun and jurong.... yah not so ideal locations....but they had high offers >20k before.

They must be banging their heads now :P

A couple months ago almost all units in Yishun was asking for $30k COV & above, I had a tough time finding a place for my buyer who was looking for a more affordable place.

Edited by Plastic3
 

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We just bought a 4rm unit in bishan for 403k in total.

COV still not sure yet as the owner still doing their new valuation.

Not sure whether consider a good deal or not.

 

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PLANS for Adora Green, the first Design, Build and Sell Scheme (DBSS) development in Yishun, were unveiled at a groundbreaking ceremony attended by developers, prospective buyers as well as MP for Sembawang GRC K Shanmugam.

Adora Green, which will offer 800 apartments, is slated to be launched within the first quarter of next year, and is likely to be the first DBSS project put up for sale after recent cooling measures were introduced earlier this year.

Of the units available, there will be an estimated 520 four-room flats, 160 three-room ones and 120 five-roomers. Under DBSS, the developer tenders for the land and can exercise flexibility in pricing and designing the flats subject to relevant legislation and rules from the Housing Board.

Guthrie SK Land, which won the bid at $148.89 million, or about $180 per sq ft per plot ratio (psf ppf) for the 27,474 sq m site, will be selling the flats with a 99-year lease.

Director of Guthrie SK Land Michael Leong, said the five-room flats will come with four bedrooms instead of the standard three. One of the bedrooms however, will be smaller and suitable for use as a study, nursery or walk-in wardrobe. Another feature is that multi-storey car parks will be spread further apart, so residents will be able to park closer to their flats.

Mr Leong estimates the pricing of the units to be between $450 to $500 psf pending market conditions. 'This is what we are looking at but not all the costs are factored in. Still, it will be within market expectations,' he added.

The last DBSS project sold - The Peak@Toa Payoh - fetched prices of up to $600 psf earlier this year in April.

http://www.adoragreen.com.sg/location.htm

 

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