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Old 26-02-2020, 10:19 PM   #293
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Join Date: Aug 2011
Posts: 2,560
Sounds reasonable. 50k expenses is plenty.

Some interesting calculations:

For a $1.8mil property (1125 sqft if $1.6k psf), they would still need $800k outside of a 35 year $1M loan.
Assuming $100k savings per year, that would still need 8 years of saving, that after buying the property, would leave them with near zero savings. Ouch.

And assuming the couple earns $16k right off graduation from university, the guy would be at least 34 years old. And the loan will only be fully paid by 69 years old.

50k expenses (assuming it stays constant, and increases with further increases in salary) + another 50k loan repayment, would then enable them to save another 50k a year. Using the savings, they could then pay down the remaining loan probably as fast as 15 years after receiving the key, and so start with near zero savings at the age of 50, but a fully paid condo.

Interesting fact:
Household income between $10k to $16k consists of 26% of the households in 2018.

Given there are around 1.7 mil households in SG, that is still 442k households. Probably 1% at any time is looking for a new launch EC, that's still 4k households. Not bad... Now I can see why last few ECs are almost selling out.
If 1.8m, make more sense to buy private condo. Loan amount can be double right ? 16k income can buy 2.3million cluster housing at watercove already
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