15 years ago, young Singaporeans aspired to own the 5Cs in life as a symbol of success. In case that sounds vaguely familiar, the 5Cs refer to Car, Cash, Condo, Credit card and Country club membership. Yet, young Singaporeans nowadays have been ‘condemned’ to BTO flats and MRT rides.
The 5Cs are no longer possible because the costs of owning these items have drastically increased because of PAP’s failed “asset appreciation” policy. For example, they built only 3050 units of HDB flats in 2008 but let in 250,000 immigrants, resulting in a sharp price spike in HDB prices by 10% to 15% in a single year!
For a middle-income couple earning $4k each, then they could easily afford a $500k 3 bedroom condo in the 1990s based on financial consultants’ recommendation that you buy a house not more than 6 times your annual income. However, you need to be the high-income earning $10k each to do so today.
How many people can afford to do so? In fact today’s newspaper shows that these luxury properties in the Core Central Region are being snapped up by the wealthy Chinese, Indonesians and even Malaysians! On the other hand, Singaporeans are fighting for sale of balance flats!
For us locals, it does no matter if your condo has appreciated by $1m over the last decade because eventually you will have to spend that money buying a new home at a higher price if you choose stay in Singapore. The only “winners” are foreign investors who cash out!
In fact, a car now costs at least 2.5 times as much from a cash flow perspective. 10 years ago, you could get a new Japanese sedan for $65k. Not only was there $0 down payment, you can stretch your loan and it will cost you about $1k month factoring in insurance, petrol and maintenance.
Today the financing ‘lease’ (if we assume that you do not wish to put a down payment) will cost $2k at least plus an additional $500 in petrol. And the whole difficulty gets compounded because the public transport system is much worse now that it was then with overcrowding and breakdowns!
The dreams of Singaporean dashed?