Orchard Residences: How much do you need to live like Jackie Chan?

Are you looking for an affordable condo, that will fit a tight budget in this shaken economy? Then click to navigate to some other page, because this one is about the direct opposite of what you’re looking for. This is about a competitively priced unit at Orchard Residences, that luxury residence on top of Ion Orchard, where Jackie Chan and Eduardo Saverin both own a unit in. Here’s how much you need to live here:

The competitively priced listing

You think I keep saying “competitive” because I’m being sarcastic or something, but I’m serious. This listing is $5,620,000 for a 1,808 square foot unit, at The Orchard Residences. That’s $3,108.41 per square foot, which really is competitively priced compared to other units here. Some of the other units go for $3,400 – $4,000 per square foot.

So, a unit right on top of a major mall, and in the heart of Orchard Road. Now, how much money do you need in the bank to buy this? Right, here we go.

First, the down payment

Let’s assume you have no outstanding home loan, and can get the maximum Loan to Value (LTV) ratio of 80 percent. You could borrow $4,496,000, which leaves you with a down payment of $1,124,000.

15 percent of the total cost can come from your CPF Ordinary Account, and of course you have $843,000 in there. Who doesn’t. You’ll have the pay the last five per cent of the price ($281,000) in cash. If you follow those articles about saving money by giving up Netflix, or saving $2 on every Starbucks latte or something, you’ll get there in no time*.

(*According to a very optimistic person we asked)

Second, the stamp duty

Let’s assume you have no other houses, and are a Singaporean citizen. You don’t face an Additional Buyers Stamp Duty (ABSD). That means you will pay a Buyers Stamp Duty of just…$163,200.

Don’t worry though, you can pay for it using your CPF (you know, the one you already took out $843,000 from).

Third, the monthly costs

Let’s assume you have a mortgage rate of about 1.8 percent per annum, which is typical on the market right now. Let’s also assume you take a 25 year loan. All in, your total monthly mortgage will come to $18,622 per month.

Incidentally, there is a maximum Total Debt Servicing Ratio (TDSR) of 60 percent, so you need to be earning $31,037 a month to qualify for the loan ($40,348 a month if you’re self-employed, or have variable income).

Maintenance costs are about $700 a month, but do you really care if you make $31,000+ a month?

Fourth, the renovation cost

1,081 square feet isn’t actually that huge. We’d estimate maybe $60,000 for flooring and painting, and maybe another $100,000 for furnishings (it’s not like you’re going to use plastic stools in your $5.6 million home, right?)

So let’s say $160,000, which is pretty conservative for luxury homes.

Lastly, the property tax

Rental at Orchard Residences can hit $17,000 a month on average. That’s an Annual Valuation (AV) of $204,000. Assuming you are living in it yourself, and not renting out, that makes your property tax $21,220 a year (about $1,768 per month).

So how much do you need to buy a unit in Orchard Residences?

You need $441,000 for the minimum downpayment and renovations, and $1,006,200 in your CPF OA. After that, you’re looking at paying $21,090 every month, in terms of the mortgage, taxes, and maintenance.

Alternatively, you could spend $1 million less, and purchase a 36-acre US military missile base with bomb-proof underground bunkers, from which to launch an invasion of a small country or something.

Just let that comparison sink in.