2019 welcome the most anticipated and only EC launch – Piermount Grand at Punggol. In fact, in its launch weekend, it sold over 45% of their units at an average price of $1080psf. Wow, EC breaching the $1000psf range, it’s the first time in EC history. Accordingly to news release by CDL, second-timers accounts for about 65% of the units sold.

Starting prices for each type of unit as below:

Type | Size [sqft] | Price |

3 Bedroom | 840 – 1216 | From $888,000 |

4 Bedroom Premium | 1302 -1410 | From $1,340,000 |

5 Bedroom Premium | 1432 – 1701 | From $1,508,000 |

Quick check on SRX shows that their cheapest sold thus far were at $888k for a 840sqft 3-bedder unit while their most expensive unit goes at $1.737m for a 1700sqft penthouse unit.

**Impact to Buyers:**

- High bid price = high price tag

With the aggressive bidding of land by developer, the higher costs will be bear by the buyers. As such, buyers who are looking to score an EC would have to expect a higher price tag.

- Higher downpayment

Since July 2018, the government roll out their latest cooling measure and set a higher downpayment at 25% over property price. Together with the increase in the property price, couples can expect to fork out a higher quantum out of their pockets.

- Smaller units expected

To make units somewhat still “affordable” to consumers, developer usually will try to build smaller units as permitted by the regulations set by HDB/URA. In this instance, payment of $888k only gets you a 840sqft condo. This is a far cry from the 900+sqft of a standard 4-room HDB.

**How much must one earns to afford the cheapest of each unit types?**

Compare to the previous EC launch – Rivercove Residences, Piermount Grand certainly have a much higher entry price for those looking to get a EC. This kind of lead me to think how *“well-endowed”* must one’s bank account be for them to afford a unit in this project?

Assumptions made:

- Both owners are less than 35 years old, which means that the loan tenure is the maximum of 30 years.
- The couple do not have any debt or financial commitment.
- Monthly instalments is calculated using an interest rate of 3.5%, which is the recommended rate from MAS to calculate instalments amount.
- Income remains constant for the entirety of the duration.
- The couple is taking the maximum loan based on their income in order to reduce the initial cash outlay for the purchase.
- Grant is not considered in the calculations.

## 3 Bedroom

The starting price of a 3 roomer is $888k based on the above table. The maximum amount that a couple can borrow from the bank is up to 75% of the unit value.

maximum amount : $888k * 75% = $666k

One can only borrow a maximum of 30% of your income due to Mortgage Servicing Ratio (MSR).

Based on the above chart, the minimum income required is slightly less than $11k, roughly $10,750 to be more exact. The monthly instalment is $3225.

The initial outlay required is the 25% downpayment would be $222k, $21,240 for stamp duty and $2500 for lawyer fees. These only include the big ticket payment and does not include the miscellaneous fees that you need to fork out here and there.

This means that other than earning a minimum income of $10,750 per month, you will need to also have a savings of at least $245,740.

## 4 Bedroom

The starting price of a 4 roomer is $1340k based on the above table. The maximum amount that a couple can borrow from the bank is up to 75% of the unit value.

maximum amount : $1340k * 75% = $1005k

One can only borrow a maximum of 30% of your income due to Mortgage Servicing Ratio (MSR).

Based on the above chart, the minimum income required is actually more than $14k, which is above the maximum income eligibility of $14k for EC. The couple would need to have an income of $14k in this case, in order to meet the requirements. We will need to assume that the couple can only loan the maximum of $930k and pay the difference in cash or CPF. The monthly instalment in this case is $4200.

The initial outlay required is the 25% downpayment would be $335k, the top up difference of $75k, $38,200 for stamp duty and $2500 for lawyer fees. These only include the big ticket payment and does not include the miscellaneous fees that you need to fork out here and there.

This means that other than earning a minimum income of $14,000 per month, you will need to also have a savings of at least $450,700.

## 5 Bedroom

The starting price of a 5 roomer is $1508k based on the indicative price range. The maximum amount that a couple can borrow from the bank is up to 75% of the unit value.

maximum amount : $1508k * 75% = $1131k

One can only borrow a maximum of 30% of your income due to Mortgage Servicing Ratio (MSR).

Based on the above chart, the minimum income required is actually more than $14k, which is above the maximum income eligibility of $14k for EC. The couple would need to have an income of $14k in this case, in order to meet the requirements. We will need to assume that the couple can only loan the maximum of $930k and pay the difference in cash or CPF. The monthly instalment in this case is $4200.

The initial outlay required is the 25% downpayment would be $377k, the top up difference of $201k, $44,920 for stamp duty and $2500 for lawyer fees. These only include the big ticket payment and does not include the miscellaneous fees that you need to fork out here and there.

This means that other than earning a minimum income of $14,000 per month, you will need to also have a savings of at least $625,420.

*Do note that this is an estimated figures that help you with your initial financial plans, and does not represent the actual values. You will need to refer to the respective banks for actual loan amounts.*

**Last Words**

Based on the price range, it seems to target more to second timers who are looking for an upgrade from their HDB and have a substantial amount of savings in their bank account/CPF.

Doing a quick analysis of the price trend, it seems that in the near future, $1000++psf will soon be a norm in the EC market. If so, would “sandwich” class that earn below $14000 per month still think it is within their budget?