Parents paying for education and now housing downpayment.

Last weekend, Sunday times have a series of three articles talking about a growing trend of young adults just entering he workforce seeking assistance from parents to pay for down payment of new flats.

Copywriter Amos Yeo, 26, got a helping hand from his father when he and his girlfriend, scriptwriter Pamy Tan, 24, wanted to buy a five-room public housing flat under the Design, Build and Sell Scheme.

The couple had recently graduated and been working at their jobs for about six months when they saw the unit at Parkland Residences along Upper Serangoon Road, next to Punggol Park, and which had a price tag of $720,000. They had combined savings of less than $15,000 and, with hardly enough in their Central Provident Fund accounts, it was a far cry from the initial 20 per cent payment of $144,000 that was required.

But Mr Yeo’s father, a civil servant, 56, who declined to be named, stepped in to give their plans a kick-start in February last year.

Knowing that they would be able to support paying the maximum loan of 80 per cent from a commercial bank, Mr Yeo’s father loaned the couple the full $144,000 to secure their new home.

They did not need to touch their savings.

Lack of affordable housing?

When I came  out to work most  of my friends  don’t face such a steep issue with getting a hdb flat. That was around 2004.

As time passes,  foreign influx, free market and investment speculation have driven up private home prices and since public housing is tied to private housing prices, they moved up as well.

However, I got to hand it to Mr Khaw Boon Wah, to take swift actions to increase the supply of housing and spread out the frequency of release.

Yes the problems mentioned in that article stems more from chasing housing as am investment

Public housing investment

One couple mentioned would probably be able to qualify for a build to order flat, probably a 4 room at 400k yet they were targeting a DBSS at 720k.

Obviously the mindset is that housing is a great investment and a great inflation hedge.  The price can only go up with time.
I think nothing wrong with that,  but this is an indicator for me how strong the mind share of property is in grain in average Singaporean mindset.

The key is to gain as much property as possible, rent them out, leverage up, pay the mortgage with another rent.

The music keeps playing as the interest  rates remain low, employment remain in abundance,  population grows towards 7 million.

Early formation of family

The second reason I feel is that the young adults have no choice since it takes time to built these flats and by the time they have save enough for it,  they would have to wait another  three years to get the flat.

This is an issue if you think about it because saving until 30 years old (4 years of saving) them wait until 33 will probably push back the years to for a family.

That entitlement feeling

What I hope that do not develop is that of a mindset amongst the youth that the parents are always there  as a safety net  to provide  you with funding for all your needs.

I think all parents would want the best for their children no matter what age their child is. But the worse thing that can happen to society is to create more self centered individual who lament that their parents  were not able to provide them with loans for university education (that was in the past)  and now down payment for housing.

The we will really be a nanny state

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