Give us HDB FLat AT COST, Not 30yrs Mortgage Enslavement
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One must question why above 85% of Singaporeans live in public housing, the world must think Singaporeans are stricken with poverty malaise.
Public housing is a form of housing tenure in which the property is owned by a government authority, which may be central or local. Social housing is an umbrella term referring to rental housing which may be owned and managed by the state, by not-for-profit organizations, or by a combination of the two, usually with the aim of providing affordable housing.
Although the common goal of public housing is to provide affordable housing, the details, terminology, definitions of poverty and other criteria for allocation vary.
http://en.wikipedia.org/wiki/Public_housing
How to maintain the price of public housing you ask? Don't make it tradeable in the open market, you can only sell it back to HDB at original purchase price. You think the PAP government will allow that, turning their high profit center HDB into a cost center?
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Kk I think maybe i need to clarify myself. (Discussing stuff with logical people quite fun)
In life alot depend on luck/hindsight.... doing the same thing as the other 80% of the people does not neccessarily end up with the same result. (referencing to eagles post to me earlier.)
(referencing angel's post on property go upupup)Take property investments for example. You might be O levels or PSLE ... buy a property ... kenna enbloc(that I think more luck than hindsight) or invest wisely then sell at a good profit. Can make 1-200k a year just on that.
However in Singapore to enter the investment market after you buy a HDB is hard. Because the entry alone is at least +-500k on top of your HDB loan if you have not paid it up.
Problem case study ---- 500k (for cheapo private investment)+ 250k(for HDB) = 750k (dun talk about the deposit and all that cham cui lar). How much equity/income you need before bank is even willing to lend you that? For general public or non scholar material (referencing charlize's point) die le lol. Some countries dun have that problem... minimum wage gaotim that nvm u O, PSLE or wat hence charlize's pt is moot but in Sg it is a real problem.
What I'm trying to say is because the avenues of investment in Sg is relatively limited. Bank FD interest is low, investment property entry level is expensive, minimum wage is close to non existant, everything is tied to education and job (dun talk abt self employed, shares and all that lar... to me shares is touch and go dun believe go try). In SG's case (referencing eagle) do what the 80% does will end up like the 80% is true.... but only for Singapore cos of its economic climate/restrictions.
As for angel.... property in singapore not always up up up. Go talk to your dad... around 199x-200x many people lose alot of $ lol because they think property sure +++.
Always have enough equity and cashflow before touch property.
Kind Regards
Genie
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Originally posted by Atobe:
Does anyone have any idea what is the cost of an HDB unit ?
On Page 1 of this thread, the following was offered and which was also the subject of an earlier thread in 2009 :-
Both had reported the following:-
After Singapore was hit by three economic recessions - in 1987, 1997 and 2004 - each Economic Review Committee and their respective sub-committees had reported that the Singapore Government is taking too much private money through the CPF system.
This is from the 20 Percent forced contribution from Singaporean monthly wages and the prevailing approved rate from the Employers - which stands at 16 Percent.
The whopping monthly amount of 36 Percent paid monthly into the CPF fund - is accumulated throughout a Singaporean working life, which this Government can never fulfill its obligation to repay everyone when payout time occur; and this Government is resorting to a plethora of policy mechanism to whittle away its CPF debt to Singaporeans through the Medisave, Medishield, and now the CPF-Life Policies - as well as to delay the withdrawal date and reducing the withdrawal sums by increasing the balance needed supposedly for one's old age.
The ultimate Government policy in wiping its CPF debt to Singaporeans is through its HDB pricing mechanism to rob Singaporeans of its entire CPF savings - by arbitrarily pricing the HDB unit as high as the Singaporean can bear.
Considering that land has been "robbed" from private ownership through the Land Acquistion Act - in which land needed by the Government is acquired at below market rates - it is disingenious for the Government to claim that it has subsidised HDB prices by selling HDB homes at over 100 Percent of its construction cost.
It is interesting that the argument has now arrived to this point with an ingenious question of asking what should "affordability" be in pricing public housing ?
How does 'Fatum' proposed to measure "affordability" to Singaporeans - can there be common ground that is agreeable by all parties - some kind of perimeters that define what "affordability" should be ?
now that's a good example of selective numbers play .....
Here's the yishun dew spring project
http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/FF131E246C03304A482575230034347D?OpenDocument
There are 144 two room flats - priced at $79 to $90k BEFORE AHGs
There are 216 3 room flats - priced at $120 to $146k BEFORE AHGs
There are 504 4 room flats - priced at $197 - $239k BEFORE AHGs
AHGs ranges from 5k to 40k for each household.
Taking into account that the average AHGs ranges from 20 to 30k, how, pray tell, did you arrive at the figure of over 100% profit ?
And with regards to affordability, personally, looking at the prices here, is a two or three room a stretch for you ?
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yr 1997 many got their hands burn.
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Originally posted by eagle:
Just in 2005, a 4-rm flat costs $100k+. The run up to 2007 mania did not just affect Singapore, but worldwide.
Read carefully.
You just proved my point about myopic views.
Well said. I didn't disagree on this point.
While I won't deny that his inventory management has failed, my stand still remains that government policies are usually reactive instead of proactive.
And if his planning goes wrong, and there's an over supply of flats, leading to say a 4-rm flats selling for $80k at the extreme, new buyers will be happy, but retirees looking to downgrade to get extra cash will be extremely unhappy. Aging population mah.... must make older voters happy leh...
want to know why older flats actually become more valuable ?
read up on HDB SERS scheme. That's why when old flats are being targetted by the HDB for redevelopment, prices actually shot UP !
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Something is gravely wrong with the country when 85% of the population lives in public housing.
Another interesting fact, Hong Kongers spend 3.4% of their monthly household expenditures on utilities. If you gross up the 3.4% (based on S$200 from Singapore Power) , it would mean that the monthly household expenditures (not household income) is S$5,882.
According to the 2006 census[1], the total Hong Kong population was 6.6 million. The breakdown by type of housing was as follows:
- Public rental housing: 31.0%
- Housing Authority subsidized sale flats: 17.1%
- Housing Society subsidized sale flats: 0.7%
- Private permanent housing: 49.3%
- Temporary housing: 0.7%
- Non-domestic housing: 1.2%
Subsidized sale flats listed here are not tradeable in the open market.
In 2009, 53.9% of the 2.3 million domestic households were owner-occupiers.[2]
In 2004/2005, housing expenditures were accounting for an average of 30.6% of the average monthly household expenditures, with utilities accounting for an additional 3.4%.[3]
http://en.wikipedia.org/wiki/Housing_in_Hong_Kong
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Originally posted by βÎτά:
Something is gravely wrong with the country when 85% of the population lives in public housing.
Another interesting fact, Hong Kongers spend 3.4% of their monthly household expenditures on utilities. If you gross up the 3.4% (based on S$200 from Singapore Power) , it would mean that the monthly household expenditures (not household income) is S$5,882.
According to the 2006 census[1], the total Hong Kong population was 6.6 million. The breakdown by type of housing was as follows:
- Public rental housing: 31.0%
- Housing Authority subsidized sale flats: 17.1%
- Housing Society subsidized sale flats: 0.7%
- Private permanent housing: 49.3%
- Temporary housing: 0.7%
- Non-domestic housing: 1.2%
Subsidized sale flats listed here are not tradeable in the open market.
In 2009, 53.9% of the 2.3 million domestic households were owner-occupiers.[2]
In 2004/2005, housing expenditures were accounting for an average of 30.6% of the average monthly household expenditures, with utilities accounting for an additional 3.4%.[3]
http://en.wikipedia.org/wiki/Housing_in_Hong_Kong
Are you saying that Hongkong housing policy is better ie Singapore should adopt the rental housing policy instead of the ownership housing policy ?
May I suggest you use the Econlit search engine to search on the research economic articles on housing policy in the different countries ?
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Originally posted by Seowlah:
Are you saying that Hongkong housing policy is better ie Singapore should adopt the rental housing policy instead of the ownership housing policy ?
May I suggest you use the Econlit search engine to search on the research economic articles on housing policy in the different countries ?
Would you prefer to live in subsidized housing if you are poor, or attempt to buy it paying an arm and a leg?
Public housing is for poor folks to live in, not investment grade property like private housing where it's readily traded in the open market. If you want to invest in property buy private properties, not "subsidized" public housing.
I would suggest that you search the Econlit library for housing policies of different countries too.
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Originally posted by βÎτά:
Would you prefer to live in subsidized housing if you are poor, or attempt to buy it paying an arm and a leg?
Public housing is for poor folks to live in, not investment grade property like private housing where it's readily traded in the open market. If you want to invest in property buy private properties, not "subsidized" public housing.
I would suggest that you search the Econlit library for housing policies of different countries too.
your utilities of $200 is a bit shocking for an HDB flat, does your mom scream at you for leaving the lights on all night ? Or have you taken a peek at your parent's monthly utilities bills before ?
based on the HDB prices listed above, the mortgage to monthly income ratio is approximately 20%, so you would prefer to pay 30% of your paycheck for the rest of your life to rent a place to stay but won't want to spend 20%, or even 30% of your paycheck to buy a place ? .......
errrrrrrrr ...............
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Originally posted by Fatum:
now that's a good example of selective numbers play .....
Here's the yishun dew spring project
http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/FF131E246C03304A482575230034347D?OpenDocument
There are 144 two room flats - priced at $79 to $90k BEFORE AHGs
There are 216 3 room flats - priced at $120 to $146k BEFORE AHGs
There are 504 4 room flats - priced at $197 - $239k BEFORE AHGs
AHGs ranges from 5k to 40k for each household.
Taking into account that the average AHGs ranges from 20 to 30k, how, pray tell, did you arrive at the figure of over 100% profit ?
And with regards to affordability, personally, looking at the prices here, is a two or three room a stretch for you ?
Objectively speaking
144 * 90k + 216 * 145k + 504 * 235k - 864 * 20k = 162.66 mil
HDB still profit near 60 mil leh... Say land cost 10 mil, still profit 50 mil leh... Anywhere I missed out?
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Originally posted by Fatum:
your utilities of $200 is a bit shocking for an HDB flat, does your mom scream at you for leaving the lights on all night ? Or have you taken a peek at your parent's monthly utilities bills before ?
based on the HDB prices listed above, the mortgage to monthly income ratio is approximately 20%, so you would prefer to pay 30% of your paycheck for the rest of your life to rent a place to stay but won't want to spend 20%, or even 30% of your paycheck to buy a place ? .......
errrrrrrrr ...............
Your bill is less than $50?
A public housing is a place to live, if you are paying less in terms of mortgage payments as compared to the rental. Doesn't it make more sense to rent than to buy? Sorry I am not some Finance guru dealing in stochastic finance, so don't confuse me.
Ultimately with public housing it still belongs to HDB not YOU, as most folks like to be confused with.
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Originally posted by βÎτά:
Your bill is less than $50?
A public housing is a place to live, if you are paying less in terms of mortgage payments as compared to the rental. Doesn't it make more sense to rent than to buy? Sorry I am not some Finance guru dealing in stochastic finance, so don't confuse me.
Ultimately with public housing it still belongs to HDB not YOU, as most folks like to be confused with.
if you are paying less in terms of mortgage payments as compared to the rental. Doesn't it make more sense to rent than to buy?
No leh, it makes more sense to buy than to rent. You pay less for mortgage leh... Plus if you sell, assuming house prices remain the same, you lose only the costs of mortgage. Rental, you will never get back the whole sum.
I'm not some finance guru dealing in stochastic finance also, don't try to confuse me leh...
Ultimately with public housing it still belongs to HDB not YOU, as most folks like to be confused with.
Land in Singapore ultimately belongs to the government as well, not us, as most folks like to be confused with too.
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What is the politically correct definition of public housing?
1) A government entity set up to sell public housing to the abled / less abled and earning a hefty profit in the process.
2) A government entity set up to sell public housing to the poor at less than the cost of building.
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Originally posted by βÎτά:
Would you prefer to live in subsidized housing if you are poor, or attempt to buy it paying an arm and a leg?
Public housing is for poor folks to live in, not investment grade property like private housing where it's readily traded in the open market. If you want to invest in property buy private properties, not "subsidized" public housing.
I would suggest that you search the Econlit library for housing policies of different countries too.
There is a rental housing market in Singapore ie the 1 or 2 room rental houses provided by the HDB and the rooms rented out by HDB ownership for the poor.
For the poor, the HDB has provided them opportunities to upgrade to ownership when they are financially better ie HDB has provided them substantial subsidies to buy 3 room HDB flats.
It is logical that the money used for the paying the rent is better used to be paying for the instalments for a HDB flat with financial assistance from HDB and prudent choice on the size of the HDB flat bought based on one's financial ability.
By the way, Econlit is a database of research economic articles that are published in world economic journals and these articles are written by world leading economists and these articles are based on well researched data and analysis, not the articles in Wikipaedia that are contributed by some individuals who might or might not have the professional expertise.
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Originally posted by eagle:
No leh, it makes more sense to buy than to rent. You pay less for mortgage leh... Plus if you sell, assuming house prices remain the same, you lose only the costs of mortgage. Rental, you will never get back the whole sum.
I'm not some finance guru dealing in stochastic finance also, don't try to confuse me leh...
So you telling me, that if you pay $100 for mortgage and $50 for rental.
You'd rather pay $100 for mortgage?
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Originally posted by Seowlah:
There is a rental housing market in Singapore ie the 1 or 2 room rental houses provided by the HDB and the rooms rented out by HDB ownershe for the poor.
For the poor, the HDB has provided them opportunities to upgrade to ownership when they are financially better ie HDB has provided them substantial subsidies to buy 3 room HDB flats.
It is logical that the money used for the paying the rent is better used to be paying for the instalments for a HDB flat with financial assistance from HDB and prudent choice on the size of the HDB flat bought based on one's financial ability.
By the way, Econlit is a database of research economic articles that are published in world economic journals and these articles are written by world leading economists and these articles are based on well researched data and analysis, not the articles in Wikipaedia that are contributed by some individuals who might or might not have the professional expertise.
So the rest of those living in 3 rooms and above are not poor?
Then why public housing?
There is a stark difference between Singapore's definition of public housing and the rest of the world.
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Originally posted by βÎτά:
So you telling me, that if you pay $100 for mortgage and $50 for rental.
You'd rather pay $100 for mortgage?
You said this leh:
if you are paying less in terms of mortgage payments as compared to the rental.
Not more in terms of mortgage payments leh.
You trying to tell me $100 is less than $50?
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Btw, I rather pay $100 for mortgage than $50 for rental.
The $50 will forever be gone, but for the $100, assuming 10% interest rate, $90 is still mine.
I'm not some finance guru dealing in stochastic finance hor, don't try to confuse me again leh...
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Originally posted by eagle:
You said this leh:
Not more in terms of mortgage payments leh.
You trying to tell me $100 is less than $50?
Sorry, I muddled the sentence.
My fault.
Should be.
If you are paying less, in terms of rental compared to mortgage payments.
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Fatum,
I hope this will be my last reply to you. You ask what is the "affordable price" for a 4 room flat if I think $200K is too much to pay?
I am sorry to say that you have missed the point totally. It is not about a static price stated now and then. As I have said, you are buying your 4 room flat at $200K basically because people like me are making noise and challenging Minister Mah. HDB reacted and lower the price. Yes, HDB, as the monopoly of the new HDB flat market, has the total power of manipulating the prices.
But that is besides the point. What we are talking about is a system of pricing, not about what is the "right price" for different times. I am talking about a sustainable pricing mechanism that is fair to Singaporeans. A market discount pricing system which is practised now is not the appropriate system as I have mentioned, PAP has the social obligation to provide cheap and basic public housing for the masses. In the past, PAP government has the proper pricing mechanism, that is based on COST PRICE of the flat. They have even given a REAL SUBSIDY based on that COST PRICE. They have fulfilled their deal on the Land Redistribution contract.
So far, HDB has REFUSED to publish the COST PRICE of building each flats. But we have established the COST PRICE by some other means. It comes to about $120K (excluding land price) for a 4 room flat. Please note that this include the building of road networks and carparks for the whole surrounding as a project. For carparks, HDB continues to get revenue by means of collecting monthly car park fees.
The Cost Plus pricing, as someone has called it, is a more stable and sustainable pricing mechanism. It will be shielded from the fluctuation in pricing due to liquidity availability or sudden surge in population due to some policy mismanagement. The inflation (or increase in prices) of new HDB flats will be solely pegged at the inflation of construction cost which is linked to general economic growth. This would mean that this it is more closely linked to wage growth as well. This could be determined by examine the HDB prices back in 1981 compared to present prices based on cost price, then comparing it to the real earning of citizens. A 4 room HDB back in 1981 would cost about $40K to $60K. If based on this cost plus pricing, the 4 room flat now would be around $140K. This would be about 2-3 times of the 1981 prices. Real earnings for workers has grown about 2-3 times as well for the similar period. You can check this out from Lucky Tan's blog:
http://singaporemind.blogspot.com/2010/04/mah-bow-tan-we-dont-fudge-numbers-part.html#links
This would be a fairer pricing mechanism that suits the social role of the government. Don't you think so? I am not even asking PAP government to give REAL SUBSIDY at cost price. I am merely asking PAP government to be responsible and honor their part of the social contract.
I would not expect HDB to be in the position to control Resale market. It is a many sellers many buyers market. I wouldn't force PAP government to do something that is not within their power or means. Just leave Resale market as it is.
Goh Meng Seng
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Originally posted by eagle:
Btw, I rather pay $100 for mortgage than $50 for rental.
The $50 will forever be gone, but for the $100, assuming 10% interest rate, $90 is still mine.
I'm not some finance guru dealing in stochastic finance hor, don't try to confuse me again leh...
$90 is perceived to be yours, but ultimately HDB will repossess the flat when the time is up.
A choice is given to you, either you top up and get a new flat or they pay you less than the market value.
But you lose interest in your mortgage payments.
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Ahh.... Mr Goh... now I see your point... clear now... Thanks for sharing...
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Originally posted by βÎτά:
$90 is perceived to be yours, but ultimately HDB will repossess the flat when the time is up.
A choice is given to you, either you top up and get a new flat or they pay you less than the market value.
But you lose interest in your mortgage payments.
When the time is up?
Hmmm... Buy flat at 30 yrs old, 99 year lease...
So 99 + 30 = 129Wow! The time will be up when I'm 129 yrs old!
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Originally posted by eagle:
Objectively speaking
144 * 90k + 216 * 145k + 504 * 235k - 864 * 20k = 162.66 mil
HDB still profit near 60 mil leh... Say land cost 10 mil, still profit 50 mil leh... Anywhere I missed out?
that is true enough, but what if we look at things at an even more macro level ?
Let's remember that the HDB is not concerned with the building of new HDB flats alone. They are also operating in the resale market through subsidies for home seekers.
For each new couple that choses to purchase a resale flat, 30 to 40k of subsidies are granted to them as well, plus, potentially up to another 40k of AHGs is applicable to them as well. Where do you suppose the HDB gets the money from ?
Just as new flat buyers like us are subsidizing the purchase of smaller units by other home owners, we are also subsidizing the purchase of resale flats by other people.Jiak ter, per gau, eat pig, pay dog, make sense ? fair ?
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Originally posted by goh meng seng:
Fatum,
I hope this will be my last reply to you. You ask what is the "affordable price" for a 4 room flat if I think $200K is too much to pay?
I am sorry to say that you have missed the point totally. It is not about a static price stated now and then. As I have said, you are buying your 4 room flat at $200K basically because people like me are making noise and challenging Minister Mah. HDB reacted and lower the price. Yes, HDB, as the monopoly of the new HDB flat market, has the total power of manipulating the prices.
But that is besides the point. What we are talking about is a system of pricing, not about what is the "right price" for different times. I am talking about a sustainable pricing mechanism that is fair to Singaporeans. A market discount pricing system which is practised now is not the appropriate system as I have mentioned, PAP has the social obligation to provide cheap and basic public housing for the masses. In the past, PAP government has the proper pricing mechanism, that is based on COST PRICE of the flat. They have even given a REAL SUBSIDY based on that COST PRICE. They have fulfilled their deal on the Land Redistribution contract.
So far, HDB has REFUSED to publish the COST PRICE of building each flats. But we have established the COST PRICE by some other means. It comes to about $120K (excluding land price) for a 4 room flat. Please note that this include the building of road networks and carparks for the whole surrounding as a project. For carparks, HDB continues to get revenue by means of collecting monthly car park fees.
The Cost Plus pricing, as someone has called it, is a more stable and sustainable pricing mechanism. It will be shielded from the fluctuation in pricing due to liquidity availability or sudden surge in population due to some policy mismanagement. The inflation (or increase in prices) of new HDB flats will be solely pegged at the inflation of construction cost which is linked to general economic growth. This would mean that this it is more closely linked to wage growth as well. This could be determined by examine the HDB prices back in 1981 compared to present prices based on cost price, then comparing it to the real earning of citizens. A 4 room HDB back in 1981 would cost about $40K to $60K. If based on this cost plus pricing, the 4 room flat now would be around $140K. This would be about 2-3 times of the 1981 prices. Real earnings for workers has grown about 2-3 times as well for the similar period. You can check this out from Lucky Tan's blog:
http://singaporemind.blogspot.com/2010/04/mah-bow-tan-we-dont-fudge-numbers-part.html#links
This would be a fairer pricing mechanism that suits the social role of the government. Don't you think so? I am not even asking PAP government to give REAL SUBSIDY at cost price. I am merely asking PAP government to be responsible and honor their part of the social contract.
I would not expect HDB to be in the position to control Resale market. It is a many sellers many buyers market. I wouldn't force PAP government to do something that is not within their power or means. Just leave Resale market as it is.
Goh Meng Seng
as per my reply to eagle.