House Ownership Important to The Poor ?

Let presume you are the lower range of the age target 35. Payment of $200 per month from your monthly $1000. That's already 20% of your income provided it is already disposable income. Poor people I know of dun even earn that $1000 disposable income. Govt building 2 room flats and wants poor people ownership would not work. That would only provide an "incentive" to sink them into greater debt. Does the government guarantee that the poor fellow will be employed for the next 20 years till he is 55 years old while earning that $1000. Any hiccups in the economy, that poor fellow bears the brute force. I would rather that the government "teach" the way how to fish than providing them the easy bait. The focus on job re-creation is excellent, works for them and contributes to the economy, and the focus should still be this. Maybe we Singaporeans should move with the global trend to rent apartments to rent houses rather than actual flat ownership. Renting houses frees up more disposable income than having assests frozen in living houses. He cannot sell because he lives in it. He cannot benefit from the sale, he does not know how. That poor fellow is not going to benefit much from living in that house, coping with day to day living is already hard enough assuming he/she has no kids. My recommendation is that government builds these new 2 room flats and then rent out these flat at a subsidized rate. Help the poor achieve better cashflow while creating more substainable jobs for them which they are already doing. Educate the children borned in a poor family free of their limiting beliefs. Instill correct working attitudes and inspire them to get out of the poverty circle. Education dont come cheap here in Singapore so do public transport. With more disposable income, they can provide more for their kids with additional help of bursaries from the govt.

I will help the poor when I get more successful, but in a way that really helps them in a real substainable way. 取之社会， 用之社会. I really hate to see talents go to waste because they are "handicapped" not physically or mentally but in money terms. Money is always printed in the mint, but life is finite and God given.


Enjoy today.



Cheers
Niversphere.

News Excerpted from CNA
Government to start building 2-room flats before year-end
By Asha Popatlal, Channel NewsAsia


The government will start building new 2-room flats before the end of the year.

It is currently assessing what the demand is likely to be and where to build these flats.

National Development Minister Mah Bow Tan, speaking to reporters after a community event on Saturday, said certain criteria would however apply to interested buyers.

These include an income ceiling so that lower-income families will not have to compete with others to get these 2-room flats.

After all, Mr Mah said, the idea of such grants is for this group to be able to afford their first home as soon as possible and to have assets when they retire.

Another criteria will be that at least one member of the household must have worked over the last 2 years in line with the philosophy of workfare.

Mr Mah said: "There will be demand from 2 categories of people. Those who are downgrading - elderly, lower income who may not meet repayments and may want to down size. The second category are the low income and anyone who may not be able to afford larger flats. Two-room flats are a good way for them to get started and own their first flat and as salary increases, as their children start working, they can upgrade."

Mr Mah also told reporters that the government is also looking at releasing a piece of land on a short 30-year lease basis that could ideally be used to build a retirement village, although its ultimate use will be up to private developers. - CNA/ch


News Excerpted from CNA
Lower-income workers welcome housing grants for flat purchases
By Hasnita A Majid, Channel NewsAsia


Low income-earners have welcomed the measures announced in the Budget on Friday to help first-timers buy their own flats.

They can receive a housing grant of up to twenty thousand dollars.

Property agents say that the measure will certainly help this group get affordable housing.

41-year-old Arivuazahagan and his family have been living in a one-room rental flat for the past 19 years.

Although he pays slightly more than S$40 to rent the flat every month, he wants to buy his own place.

But the sole breadwinner of the family who earns less than S$1,500 a month as a security guard has been waiting for his elder son to complete his national service before he buys a flat.

He said: "I am only waiting my sons to be stable. When they finish NS, they can work and get some money so my CPF can buy house. If I want to buy house, at least 2 to 3 persons work then it is comfortable."

With the new housing grant that the government has announced, Mr Arivuazahagan will stand to receive up to S$60,000 - the maximum grant of S$20,000 as he's earning below S$1,500 a month - and another S$40,000 if he's buying a resale flat near his parents.

And he is already looking forward to a three-room flat so that his sons can each have a room of their own.

A better option for him, say property agents, is to buy a new two-room flat that the government is planning to build.

Chris Koh, Director, Dennis Wee Properties, said: "First a 2-room flat I foresee HDB will price it at about S$70,000. With a S$20,000 grant added on, means effectively I pay about S$50,000 for that flat so S$50,000 if I were to divide it again, maybe over a 20-year loan and that will result in an instalment of about S$200. It's definitely payable because with a S$1000 salary, assuming that we are talking about the age group of 35-45 with a contribution of 20-30 percent to the CPF account, then I'll have sufficient instalments so that may be a better option for someone with lower income."
Alternatively, Mr Arivuazagahan could also consider a 2-room resale flat that's available in the market to get maximum benefits from the grants.

Under current regulations, first-time buyers of resale flats are eligible for the grant of $30,000 or $40,000 if the resale flat is near his or her parents.

The grants are not eligible for new flats.

There are currently 6,294 two-room flats that are currently owned by Singaporeans, with another 23,057 rented out in the market.

Mr Koh said: "Two-room flats are very popular. In fact not a lot of people want to sell them. The people who own them are of a higher age group. In fact when there's a flat to sell, we get a lot of calls from retirees. Retirees who downgrade, pay the flat fully and not have any loans. You do see people in two-room flats in areas like Bedok and they are very sought after. You don't see them coming up for sale so often but when they are up for sale, we get a flood of calls for that flat. It's quite easy to sell because there's demand for it."

Property agents suggest that the government should look into allowing the new housing grant to be used to pay the monthly instalment of their flats and not just as down payment.

Mohamed Ismail, CEO, Propnex, said: "For the existing grant of $30,000 to $40,000, the current requirement here is that one has to utilise towards all the down payment. Leaving it in the CPF to pay towards the instalment will definitely help the lower income, especially one who's earning below $1,000."

"He does not want to be burdened by the monthly commitment and if this top up can be used towards the monthly instalment, then it will again free him from other commitments or whatever costs of living that one has to take care of."

The new initiative to help low wage earners buy their own flat is expected to benefit some 6,000 households per year.

It is part of the government's aim to help up to 90 percent of Singaporeans to own their homes. - CNA/ch