Sengkang Grand Residences a dream or nightmare for buyers?

When CapitaLand and City Development (CDL) teamed up to develop the 3.7 hectares residential site next to BuangKok MRT station in 2018, it promised to be a match made in heaven. Indeed, there was tremendous market hype as the two developers are the big boys in the real estate sector. The last time the two titans combined forces was in 2007 for the Botannia project in West Coast. Thus, it is not surprising that Sengkang Grand Residences became the best-selling integrated project in 2019.

But what raised plenty of eyebrows was the strong response shown during the launch day of Sengkang Grand Residences. 216 of the 280 units had been sold at an average price of $1,700 per square feet (psf). Prices for the integrated project start from $798,000 for a one-bedroom plus study unit, $998,000 for a two-bedroom, $1.498 million for a three-bedroom, and $2.1 million for a four-bedroom premium plus flexi. With such selling prices for Sengkang Grand Residences, one could be forgiven for thinking that it is a seller’s market now. But is it really so?

Sengkang Grand Residences

The selling prices of Sengkang Grand Residences are certainly mind-blowing. After all, the block-buster performance came against the backdrop of a slowing economy in Singapore. With retrenchments so rampant in Singapore, market sentiments had been extremely cautious for the past two years. But what made the launch performance of Sengkang Grand Residences standout was that 93% of the buyers are Singaporeans.

In my view, I suspect the strong buying support from Singapore buyers for Sengkang Grand Residences could come from a group of buyers – the en bloc beneficiaries. The period of 2016 – 2018 saw a slew of en bloc sales taking place in Singapore. Loaded with million-dollar windfalls, these group of people will need to look for replacement …

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Negative HDB sales

In recent years, HDB resale volume has been declining in the aftermath of various government cooling measures like the Mortgage Servicing Ratio (MSR) and capping of the loan term for HDB loans. Arising from these policies, there have been cases of negative HDB sales.

What is exactly negative HDB sales? It means that after you sold your HDB flat, the resale price is sufficient to pay off the outstanding HDB or bank loan but not enough to repay fully the CPF refund with accrued interests. In this situation, besides having no cash proceeds from the transaction, you may even require to top up the shortfall in cash to your CPF account if your property is sold below market value.

Negative HDB sales

According to CPF rule, there is also a difference for those owners who bought HDB flats with HDB loans and bank loans.

For HDB flats bought with HDB loans

The sale proceeds (including the option monies) will be used to pay off the following, in this order:

1) Outstanding HDB loan

2) HDB resale levy (if any)

3) Required CPF refund

If the sales proceeds after paying (1) and (2) is not enough to make the required CPF refund, you do not need to top up the shortfall in cash, provided the flat is sold at market value.

For HDB flats bought with bank loans

The sales proceeds (including the option monies) will be used to pay off the following, in this order:

1) Outstanding bank loan

2) Required CPF refund

3) HDB resale levy (if any)

If the sales proceeds after paying (1) is not enough to make the required CPF refund, you do not need to top up the shortfall in cash, provided the flat is sold at market value.

So how do sellers determine the market value of …

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Frightening HDB rules

If you managed to purchase a new HDB flat, especially a Build-To-Order (BTO) flat, you would have made your first pot of gold. This is because new HDB flats are heavily subsidized and after meeting the Minimum Occupation Period, they can be sold to the open market for substantial profits. So congratulations and lucky you! But there are a few frightening HDB rules that Singaporeans must know. Failing to do so may hamper your financial plan or even worse, damage your wealth.

In this article, I will touch on some of the important HDB rules. Note that the information is based on my best understanding of the rules. If there is any factual error, kindly highlight to me.

Eligibility to buy

Most Singaporeans thought that they are entitled to buy new subsidized flats like BTO, Executive Condominium (EC) and Design, Build, Sell Scheme (DBSS) twice. Actually, they are only half-correct. Yes, Singapore citizens are entitled to buy new subsidized property twice in total but not twice per type of property. This means that if you have bought a new BTO flat, subsequently you are not allowed to apply for BTO flat again. You can only apply to purchase new EC or DBSS.

HDB
SG Wealth Builder

The rationale of this policy is probably to ensure an even distribution of the demands for different categories of subsidized HDB flats. Otherwise, there may be excessive demands for BTO, EC or DBSS. But many Singaporeans thought that they are entitled to a BTO for the second time, which is not true due to this policy.

Singaporeans thought that they can make a second pot of gold through buying a second BTO but sorry for pouring cold water, the government only let you strike gold once. So make sure you fully utilize this one golden …

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7 Money-Wise Tips When You Buy a Home

With property prices rising, there’s a need to be more financially savvy when it comes to shopping for a home. Not so much as cutting corners but finding better and more efficient ways to shop for a house. Considering how much you’re going to need to shell out for one, being money-wise is a good, practical approach to take.

SG Wealth Builder

 

Money-Wise Tips

  1. Use property listings. In a world where everything happens online, checking online property listings is certainly one way to save customers the time and money it takes to find available properties for sale. With sites like Property Guru, homes in OUG Parklane for sale can be found in a matter of minutes instead of the hours or days it used to take. You won’t have to pay a visit to the properties for a first look. You can do that online and generate a better list of prospective homes that meet your requirements. In the past, home shoppers could only explore a few homes so coming up with a prospective list of properties took time. Now, you can achieve the same results at your desk. You save on time, effort and travel, all with handy tools like property finders.
  1. Hire a real estate agent. You save time and effort when you hire a real estate agent to assist you. Navigating through one paperwork after another could take a lot of time, especially if you aren’t familiar with the process. Your real estate agent will guide you through it so you won’t have to worry about getting the information wrong. Also, they have the kind of negotiating skills and insight that could give you the lower price on the property you want.
  1. Take your time. Rushing through the entire home buying experience can lead to huge mistakes—the financial
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What Is Going To Happen To The Property Market In Singapore?

Below is a guest article from Gerald Tay of Conspiracy of Real Estate Investments (CREi) Academy Group. CREi provides property investment education tailored specifically to the ordinary investor & folk; and share time-tested, proven investment strategies which every keen ordinary investor can learn and apply with consistent success.

We know property prices have gone down, albeit an 8% dip since the peak of 2013.

There’re plenty of arguments from “experts” (mostly against) if the Singapore Property Market will indeed face another round of severe price correction – low price levels as seen in the 1997 Asian Financial Crisis, the economic stagnation period between 2002 and 2005 and 2008 Global Financial Crisis.

The arguments suggest prospective buyers who are eagerly waiting on the side-lines are looking for answers in the wrong place.

Some arguments have the audacity to suggest buyers, instead of waiting for the “impossible” scenario of a bloody market, they should take advantage of (somewhat) “discounted” prices by developers who are desperately clearing stock today.

Their Reasons:

  1. A low unemployment rate of 1.8%
  2. The economy is projected to grow positively, albeit at a modest pace of 2% to 4%.
  3. The Government had interceded early against over-leveraging with prudent lending measures such as Total Debt Servicing Ratio (TDSR)
  4. Increase in mortgage loans manageable with higher interest rates.

Words are wind. The best lies are seasoned with a bit of truth.

If you read local property reports or watch financial news, they often have a sophisticated panel of “experts” to predict market directions and tell buyers/sellers what to do. They look the part with their slick backed hair, fancy suits and snazzy market efficiency theories. What’s not to believe?

The problem is that these “experts” live in a bubble and their own denials. They’re famous for collectively never having predicted …

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Homeowners feel the heat from rising interest rate

It is like a rude shock to a sweet dream. Singapore homeowners are given a reality check since the start of the year when the key interest shot up like nobody business. Perhaps it is a sign of things to come but the trend is expected for a long time since the last financial crisis in 2008, which led to many countries to adopt loose monetary policies in the form of quantitative easing, notably from United States, Europe, Japan and China.

According to the Association of Banks in Singapore’s website, the latest three-month Singapore interbank offered rate, SIBOR, was 0.972% as of 20th March 2015. This was the highest level since 2008 amid expectations that United States Federal Reserve would possibly raise the lending rates mid of this year.

Obviously the above information is bad news for home-owners who borrowed a lot from the banks to finance their properties. Any slight incremental increase in the lending rate would affect their spending abilities.

I can relate to homeowners’ fear as I have home mortgage loan as well. Any form of market uncertainty is bad from a homeowner’s point of view because of budgeting concerns. Incidentally, in a few months’ time, the tenure of my mortgage loan will expire and I am looking to refinance my mortgage loan. The amount is not significant and I can choose to repay in full with my savings and CPF monies. However, doing so would reduce my cash flow and affect my ability to upgrade to a bigger house to cater to my growing family size. So my wife and I decided to go for refinancing after weighing the opportunity costs.

For HDB owners who have sizeable outstanding loans and choose to repay in 25 years, the best option is always to opt for HDB concessionary …

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Singapore best investment blogger

In the past, I’ve been thinking about how to achieve financial freedom and be a millionaire by 35 through property investment. But I have long passed this stage. I begin to think about my relationship with this society and how I can contribute and give it back – Property Soul, Founder of Property Club Singapore

The above are words of wisdom extracted from one of the email exchanges I had with Property Soul a few months ago when she approached me to do a book review on her new book “Dirty Truths and Profitable Secrets to Building Wealth Through Properties”. For the uninitiated, Property Soul is one of the local finance bloggers who specialize in real estate investments. She is quite well-known in the local finance blogging community and she shared a lot of useful tips on property investments in her blog. Many Singapore readers benefit from her sharing and obviously she has a lot of fans.

I believe there is no award for the best investment blogger in Singapore, but if there is, I would definitely nominate her. Why? Simply because of her passion and contributions to our society. Unlike other bloggers who are actually property agents trying to sell projects online, Property Soul is a thought leader who strive to drive the right principles among real estate investors, especially the novice ones. She has a day job in a different industry but yet she is able to start a successful property investment blog, launched a book, found a club and even hold seminars. So when she wrote that her aim is really to give back to society, I believe her. In that poignant moment when I read the above paragraph written by her, I was very touched by her lofty goal.

Far too many Singaporeans, including me, are

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Why property agents are so important in your real estate investments

In 2012, when my wife and I finally decided to downgrade to a smaller HDB flat, we started to search for a trustworthy property agent to sell our five-room flat. At that point of time, we didn’t approach our friends or relatives for referral because we wanted to be discreet about our plan. So when we saw a flyer from my property agent, we dropped him a call and arranged for a no-obligation meeting.The first meeting went well because my agent was really transparent about the whole process. He provided us an insight of the market dynamics, assessed our financial profiles, determined our needs and advised us on the various fees (legal, stamp duty and commission fee) and proceedings. He came across as a honest chap and did not brag about his past property transactions. We had a good vibe about him and decided to engage him to market our first home after a few phone calls.

One thing I liked about my agent was that he was able to provide a “one-stop” services such as recommending us a banker and a lawyer to process my home loan and CPF transaction. Our case was a bit complicated because we opted for a private loan instead of HDB loan. On top of this, the buyer of my home gave us a maximum grace period of six weeks to vacant our home, so we needed to manage the transaction schedule closely with the buyer and seller of our present home to ensure my family has a roof over our head. Therefore, my wife and I were very concerned of any potential show-stoppers. But thankfully, everything went smoothly and we completed the transaction in time.

I know most Singaporeans want “value for money” for their investments and prefer to arrange their own housing

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How to become rich through property auctions in Singapore

Many Singaporeans want to make money and become rich quick but very few bother to acquire the investment knowledge needed to build wealth. Recently, there was an online article in Yahoo Singapore which illustrated how a Singaporean managed to afford a HDB flat despite having little investment knowledge and drawing an average salary. Apparently, he shared that the landed property was bought for a low price because it was a bank fire sale. He further shared that bank sales can be a good source of deals and revealed that he made a profit of $850,000 after selling it in 2011.

After reading the article, I was really impressed by how he built his wealth and was also heartened that he unselfishly shared his money secrets to Singaporeans . Unfortunately, there were many cynical and negative remarks given by readers in the Yahoo website. Many of them were jealous of his achievement and took the chance to throw brick bats at government policies that restricted them from becoming rich through property investments. Usually these naysayers are those people that would never ever become rich because they don’t appreciate good advices given to them for free.

Singaporeans must realize that to become rich, you must adopt the habits of rich people and arm yourself with knowledge. To learn how to make money through properties, you must first build up your investment knowledge. The key to successful investments is never about timing, nor through sheer luck. It is all about educating yourself on the nuances, tricks and avoiding the usual traps. To this end, one of the local finance bloggers, Property Soul is organizing an education seminar on Everything You Want to Know About Property Auctions and Mortgagee Sales.

Synopsis
Do you know why some seasoned investors like to buy and sell

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How much are you saving on property by riding the North-South MRT?

SG Wealth Builder is pleased to form a partnership with SRX Singapore Property to bring you the latest information on how to build your wealth through property in Singapore. Below article is based on information provided by SRX Research and readers must not interpret it as a form of financial advice. Check out how to be a successful wealth builder in Singapore.

Yesterday, you moved into a 1,000 square foot condo in Novena.

Today, you board the North-South line for your office at Raffles Place.  For every minute you are on the MRT, you have saved $81,479 on the purchase of your home compared to someone who has purchased a comparable unit within a kilometer of Raffles Place.

$81,479 a minute.

For the first time in your life, you wish you had a longer commute.  In your case, Novena is 11 minutes from Raffles Place.  You saved a total quantum of $896,269 by living within a kilometer of Novena MRT.

$896,269.  Not bad for an 11 minute commute.  And, think of how productive you were in those 11 minutes.  You probably read the Today paper and answered your emails.

Or, perhaps, you listened to some music while you dreamed of how you’re going to spend the $896,269.  You could buy another home or put 3.7 kids through four years at Harvard or drink 746,891 cups of coffee from your favorite hawker stand.
In life we make choices.  When it comes to property, location’s the primary determinant of how much we pay.  In the case of the North-South line, the general rule is that the longer your commute, the more you save.

So, after a long day at the office, instead of dreading your 38 minute commute to Woodlands, plug in your earphones, sit back, and dream about

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Property Cooling Measures Freeze District 9

SG Wealth Builder is pleased to form a partnership with SRX Singapore Property to bring you the latest information on how to build your wealth through property in Singapore. Below article is based on information provided by SRX Research and readers must not interpret it as a form of financial advice. Check out how to be a successful wealth builder in Singapore.The below data vindicated the principles that Property Soul has been trying to highlight in her book “No B.S. Guide to Property Investment – Dirty Truths and Profitable Secrets to Building Wealth through Properties”. Before you decide to buy a second property, ask yourself whether you want to live in it or rent it out for investment purposes. It is important that you are clear of the purpose because the consideration factors for buying a house for living and for investment purposes are very different. No B.S. Guide to Property Investment – Dirty Truths and Profitable Secrets To Building Wealth Through Properties is available now in major bookstores such as Popular, Kinokuniya and Times.

If you want to see out how impactful the government’s cooling measures, look no further than District 9.

According to the Singapore Real Estate Exchange (SRX), the median Transactions-over-X Value (T-O-X) for District 9, which consists of Orchard, Cairnhill, and River Valley, was NEGATIVE $130,000.
Each month, SRX computers compare the actual transacted value for each unit in a district with its X-Value.  The X-Value is a computer-generated estimate of the market value for a home.  The difference between the median transacted price and the district’s X-Value is the T-O-X.
In District 9, more than half of the buyers paid below market value. In fact, 50% paid at least $130,000 below market value.
In contrast, the T-O-X in District 10, which covers
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Property Investment: Location. Location. Location.

SG Wealth Builder is pleased to form a partnership with SRX Singapore Property to bring you the latest information on how to build your wealth through property in Singapore. Below article is based on information provided by SRX Research and readers must not interpret it as a form of financial advice. Check out how to be a wealth builder in Singapore!What are the three most important factors in determining the value of a home?  Location.  Location.  Location.
This is a very old real estate joke that has survived the years because there is so much truth in it.

Another piece of advice that has persisted through time is buy the worst house in the best neighbourhood you can afford.
Both of these ideas point to the fact that location is by far the most important of all the factors that determine the value of a home.  While the quality of a building and its interior impact price, it is the location that ultimately drives the value of a home.

For example, savvy buyers and investors are combing through Geylang in search of bargains that will rise in value as the area upgrades.  They see opportunities to buy at a dip in the price.

Geylang is situated in an excellent location, surrounded by expressways with quick access to downtown, Marina Bay, East Coast Park and other points of interest.  All Geylang needs is some rezoning and a facelift, and it will be competing with the more fashionable neighbourhoods of Singapore.

Other areas, like Novena and Balestier, are making their play for under-appreciated neighbourhoods that are up and coming.
These neighbourhoods have several things in common.  First, they are located next to expressways and MRTs with quick access to places of work and shopping.  From a transportation standpoint, they are

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Cooling Measures Property Sale? Yes!

SG Wealth Builder is pleased to form a partnership with SRX Singapore Property to bring you the latest information on property trend in Singapore. Below article is based on information provided by SRX Research and readers must not interpret it as a form of financial advice.

Many Singaporeans want to make money and become rich quick but very few bother to acquire the investment knowledge needed to build wealth. Check out how to be a wealth builder in Singapore!
In the world of shopping, it’s easy to spot a sale.  Big, bold red-lettered signs plastered all over stores’ windows, proclaiming huge discounts and savings!
But it’s not so simple in real estate.   To find a good deal, one needs to put in hard work and analysis.  To make matters worse, you must be brave enough to act before the herd mentality kicks in and recognizes the good deals, bidding the prices up.  It takes courage to buck the trend.
In February 2009 when the SRX Price Index (private, non-landed) was down 26% from the pre-financial crisis peak, there were some buyers who went into the market.
While the rest of the market was in a state of panic, these buyers did their homework.  They analyzed the situation and concluded that they could take the risk to invest in a down market.  My guess is that most of them were careful not to overextend themselves in the event the market continued to decline.  When the market eventually recovered, they saw huge gains.
The general mood of today’s market, like 2009, is one of pessimism.  Everyone seems to be griping about the market.  That is everyone but the shrewd bargain-hunters.  A quick perusal of project data in SRX Analyzer revealed that some buyers are purchasing homes in fundamentally-sound projects that are experiencing
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X-Value a close approximation to HDB Valuation

SG Wealth Builder is pleased to form a partnership with SRX Singapore Property to bring you the latest information on property trend in Singapore. Below article is based on information provided by SRX Research and readers must not interpret it as a form of financial advice.Since the launch of X-Value on 20 Mar 2014, more than 60,000 homes have their X-Value calculated on www.srx.com.sg and Agent Connect apps. Buyers, sellers, and real estate professionals have used it as a starting point in pricing their home.
In order to understand how closely HDB valuations track the X-Value, all SRX HDB transactions in 2014 with complete valuation data were used in a comparison study.
From 1 Jan 2014 to 30 Mar 2014, the study analyzed a total of 1,774 HDB transactions. 98.2% of all valuation prices fall within a +-10% range of the X-Value. 
Valuation over X-Value
Comparison with international standards
A guideline to assess where acceptable valuation margins stand is the judgement of J Coulson in K/S Lincoln v CBRE Hotels (2010). Source: http://bit.ly/PRlH4e
The Court found that the valuation was within a +- 10% margin and hence ruled that the valuation was acceptable.
In another Australian study done in 1983, the actual percentage of valuations within a variation range of < 10% is 95% for a ‘Simple Property’ done by valuers. Source: http://bit.ly/1h7toOI
Table of valuation margin of error
The equivalent table for the margin of difference between HDB Valuations and the X-Value is shown below.
Delta VOXProportion of all transactions
 +-3%57.30%
 +-5%81.34%
 +-10%98.20%
 +-20%98.89%
Within a +-5% range of the X-Value, more than 80% of the valuations fall within this range. This compares favourably with the Daniels findings of 50% of ‘Simple’ Property for a +-5% range. Likewise, within a +-10% range of the X-Value, more than 98% of the valuations are
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Property Investors’ Alert: HDB COV Falls to Zero in Feb 2014

SG Wealth Builder is pleased to form a partnership with SRX Singapore Property to bring you the latest information on property trend in Singapore. Below article is based on information provided by SRX Research and readers must not interpret it as a form of financial advice. HDB median COV dropped to ZERO. Overall HDB Cash-Over-Valuation (COV) dropped from $3,000 in January 2014 to zero in Feb 2014. This is the first time COV hit zero since 2006 when SRX began collecting COV records. 

 COV Trend

 
(2). Twelve out of 28 HDB Towns saw zero or negative median COV. This is an increase from seven HDB towns in January that saw zero or negative COV. Bukit Panjang, Punggol, Sembawang, Sengkang and Woodlands led the drop with negative overall median COVs recorded in Feb. Bedok, Bukit Batok, Chao Chu Kang, Geylang, Jurong West, Tampines and Yishun recorded zero overall median COV.

 HDB Median COV by Town and Property Type

 
(3). Almost four in ten HDB deals closed below valuation. According to transaction records from srx.com.sg agencies, 37.3% of HDB resale deals were closed below valuation in February. This represents a 7.9 percentage point increase from 29.4% of negative COVs in Jan.
 
(4). HDB resale prices fell 1.8%. Overall, HDB resale prices fell 1.8% in February. This is the sharpest month-on-month fall since prices started declining in April 2013. With the latest decline, HDB prices now are at the same levels as 20 months ago in Jun 2012.
 
(5). Resale volume dropped 6.3% y-o-y. According to flash estimates, 734 HDB flats were sold in February’s resale market, a 20.0% month-on-month drop from Jan 2014’s 918 units. On a year-on-year basis, January’s resale volume posted a smaller 6.3% drop from 783 flats sold over the same month of last year.
 
(6). Rental volume dropped 13.7% y-o-y. An estimated 1,118 HDB flats were
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Billionaire Kwek claimed that home prices may slip 5%

Over the last two weekends, my wife and myself visited private condominium showrooms of D’Nest, Urban Vista and Q Bay. We were not planning to purchase our second property at the moment but is visiting the showrooms just to have actual sensing of the market. Even though there has been much media coverage on the state of private home in Singapore in recent years, we feel that “seeing is believing”. It is more important to have actual sensing of the market because that will provide better picture of the market dynamics.
Well, according to an article in PropertyGuru, Executive Chairman of City Developments Limited (CDL), Mr Kwek Leng Beng forecasted that private home prices in Singapore are expected to drop by up to five percent due to an oversupply of residential properties from 2014 onwards. He went on to state that private home prices would likely drop by five percent from now until 2014 if all the cooling measures implemented by the government remain in place. He urged the government to lift some of its cooling measures, such as the two year “qualifying certificate”for developers. With these qualifying certificates, it will be suicidal to keep buying land at high prices just because we want a land bank,” Kwek said.
SG Wealth Builder

To put things into perspective, the current housing situation is not truly due to demand and supply dynamics. The private home market has witnessed huge gains in prices in recent years because of the hot money flowing from foreign countries such as United States and China as a result of loose monetary expansion. Cash rich investors poured in funds to pump up prices of local private homes. Therefore no matter what policies that are going to be or have been implemented by government, they will have limited effectiveness to cool the

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5 room HDB BTO flat

I came across a blogger in The Finance SG and felt compelled to blog down my thoughts. Apparently this blogger and his girlfiriend had purchased a 5-room HDB BTO flat but had difficulty forking out $4000 cash for the balance downpayment. He is still a full-time student and has no income.

Lack of integrity
After reading his article, I can only said this blogger has no integrity at all. He bragged that he managed to fool the HDB into delaying the signing of the agreement lease for many times. This is because he don’t have the cash to pay the balance downpayment and has to depend on his girlfriend’s year end bonus and use her CPF savings to pay for it.

Property

To me, this fellow don’t deserve the flat at all. Obviously he don’t have the financial capability to afford the flat, so HDB should have given the flat to more deserving applicants. In fact, I wondered aloud how in the bloody world did his Housing Loan Eligibility got approved? The couple’s monthly income is only $2400 and this guy is still studying. Either HDB is not doing their due diligence or this blogger is telling half truth.

Self-denial and overestimation of ability
One of the blogger’s readers pointed out that if he cannot even afford $4000, he has no business buying such a huge flat. Of course he denied and claimed he can afford it. To me, this blogger don’t know what he is doing. We Chinese has a saying that goes “If you don’t have such big head, don’t wear such big hat”. It is good to have dreams and goals in life. But it is not okay to overestimate your abilities and overstretch yourselves. Furthermore, this fellow has no job, no income. Even if he managed to

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