X-Building in Bahagia #3 - The First Appointment

Alright, so we're all blur and doing this together for the first time - our First Appointment with HDB.

After meeting up with the seller and her agent, the first person we met was a "admin" person whose workstation was one of those in the open-concept cluster. She made sure all our documents were present and photocopies were made. She also made clear to us that we need to submit our copy of marriage cert to a Branch Office within 3 months of completion. At that point, it rendered the letter that we prepared to request for postponing submission of marriage cert, useless.

Together with the seller and her agent, we marched into the Officer's room and signed our lives away to each other. After putting our signatures on a few pieces of paper, and making sure we our earliest 2nd Appointment date is 7 weeks from then, we headed to the 3rd Level to buy our achitectural floor plan.

Unfortunately, the floor plan (to my dismay) is the original one and reflects the layout 35 years ago. The property is 35 years old btw. The floorplan also doesn't reflect the garden and yard area. Alamak, what a useless piece of paper for $5.00. Anyway, the seller and her agent mentioned they might have some updated floorplans to pass us so that we can show our ID or contractors.

Then, we called up our banker to check how we can settle the bank loan paperwork with the lawyer. We realized our lawyer is just on the 9th floor in the same building so we popped by to sign more papers. First, the admin auntie checked our documents and made sure they are relevant. You know how at every valuation report there are photographs attached at the back portion. Ours had one photo of the front gate and porch area. The admin auntie came in and was adamant the valuation report had a mistake and that was a wrong photo! Because the 2 storey terrace photos do not match a HDB!

An original Unit 35 years ago

While we were walking around our neighbourhood, Chuck took down a photo of an original unit from 35 years ago. There are a few units left and you can easily point them out by the looks of their "little mesh fence". Very run down but authentic!!


Go catch a few more glimpses of them before they are wiped out by the next generation! 35 years ago they were only worth a few thousand dollars.

A little background on the houses here. They were built by Singapore Improvement Trust (SIT) (HDB's predecessor) set up to improve the housing needs of the Singapore population then.

Unfortunately, there aren't much information about Jalan Bahagia/Ma'mor being built as SIT flats; the more well-known estates are Tiong Bahru and Queenstown area. There is a short article on Whampoa at ST701 though (http://property.st701.com/articles/view/89).

---

Related Posts:
http://jeanario.wordpress.com/2008/10/24/hdb-terrace-houses-original-vs-modern/

X-Hunting #10 - HDB 8K Rule, Smart or Dumb?

In the Straits Times today:

The second batch of public housing being offered by private developers goes on sale tomorrow, one year after the first lot was launched due to overwhelming demand.

Giving a sneak peak of showflats at the development called City View @ Boon Keng yesterday, developer Hoi Hup Sunway Development said it is offering 72 three-room flats, 168 four-room flats and 474 five-room flats - housed in three 40-storey blocks.

3-room flats are priced at $349,000 to $394,000.
4-room flats are priced at $523,000 to $597,000.
5-room flats are priced at $536,000 to $727,000.
On the average, they are going for $520 psf.

Their prices are wedged between those of resale Housing Board flats and those of private 99-year leasehold condos in the same area.

A five-room, 11-year-old HDB flat near the project site changed hands for $545,000 in November, for example, while units at private condo Kerrisdale in Sturdee Road sold for $731 psf to $786 psf late last year.

Other similar developments - which could house about 2,500 more units - are being planned for Ang Mo Kio, Bishan, Toa Payoh, Simei and Bedok.

My thoughts:
This DBSS at Boon Keng is considered quite an expensive development! To buy directly from HDB, families income must not be more than $8,000 a month. Can families with household income of $8,000 and less easily afford these units?

Let's say we calculate by the norm. 5% cash 15% CPF.

5% of an average $550,000 is $27,500 (cash) don't forget it is cash!!! Another 15% from CPF $82,500 for downpayment. Total cash + CPF paid up is $110,000 and the balance is $440,000.

For loan amount of $440,000 at 3.35% (quote for HDB flats) @ 30 years, the monthly repayment is about $1,940.

This means a hypothetical couple earning $8,000 needs to come up with $2,000 cash every month - that is a hefty one-quarter of combined earnings going to the housing loan!

I think HDB gives a lot of perks for first-timers. If I'm not wrong there is a HDB concessionay rate of2.5% for first timers, if that's so, then the cap rule still makes some sense. If not, HDB should seriously look at this dumb 8k rule in this booming property market!

My cousin is thinking of applying for a unit in City View with her boyfriend. She's thinking of not starting work till much later so that their combined income reflects less than $8,000. Not sure how HDB works this out and I'm sure they are not stupid, but here are my questions:

(1) How long must the combined income of less than 8K be valid before they can qualify for a new flat?

(2) Between the time of downpayment till the flats are ready in a few years time, what if the couple's income crosses the $8,000 mark?