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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

Readers who would like to read the full articles can view it here. For readers with Springpad and would like to share and contribute can email me.


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Friday 25th of January 2013

Some people are really borned with silver that price I can buy 2 4rm BTO in sembawang side by side...combined to become 7RM. I still don;t think it makes money sense to be saddled with a $700k..after interest could be 800-900k debt...could have bought a cheaper one and save that 400k....


Sunday 27th of January 2013

Vintire, they see that as part housing part investment. eventually it will turnup well.


Friday 25th of January 2013

Hi Drizzt,

Well, I think that the $200k saved by not buying a BTO 5 room flat in Toa Payoh or Boon Keng, for examples, is quite substantial and if we invest the savings carefully, we could get at least $10k annually from it to help with living expenses. ;)

CCK is not as ulu as when I was a teenager serving NS in Keat Hong Camp back in 1990. It is also quite well connected. To get to Orchard Road, for example, take bus 190. It is a fast 30 minutes ride.

Cost of living is also relatively lower in CCK compared to many other areas on the island. The population density is also lower. :)


Sunday 27th of January 2013

that is perhaps close to our country side.


Friday 25th of January 2013

Same as my 4-room HDB flat at $55K at Punggol Rd and next to old cemetry.

But, few years later HDB developed the town centre, built more flats and smartly changed the name from Punggol Rd to Hougang Ave 10.

It doesn't sound so ulu and more people came to live here.


There is reason for being cheap. That is fact of life.


Thursday 24th of January 2013

Hi Drizzt,

Good value for money, right?

5 room flats from $317,000 to $385,000 only. :D$file/12NOVBTOCCK_about1.htm

Khaw Boon Wan boleh!


Friday 25th of January 2013

goodness keat hong is ulu. but is that why its so cheap.


Thursday 24th of January 2013

i do think it is a big issue when kids feel entitled to receive monies from their parents for property and for their university education - especially those who are unable to get into a local university, or a course of their choice in the local university. Sure, you may have to wait more years to get the BTO flat, and you get less frills as opposed to a DBSS or EC or a new condo, but part of learning to be an adult is to learn how to deal with what life hands to you. and whine and gripe and expect monies to fall unto you. if your parents are willing and able to help, be grateful. i fear that once every parent starts doing it, it creates some sort of expectation on the child that the parent should continue to help out even though the child is now an adult earning his own keep.

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