SDP proposes a class of 'non-open market' HDB flats
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SDP proposes a class of 'non-open market' HDB flats
Flats could only be sold back to HDB, with no chance of capital gains
By RACHEL CHANG
and TESSA WONGTHE Singapore Democratic Party (SDP) yesterday unveiled a housing policy paper proposing a new class of flats that they say could be priced as low as $70,000.
These "non-open market" (NOM) flats would be priced by the Housing Board only to recover the cost of administration and construction.
That is, the land that the flats are built on should not have to be paid for by flat-buyers, said the paper, launched at an event at the Quality Hotel.
The SDP calculated that NOM flats could be priced at $70,000 for a two-room unit and up to $240,000 for a five-room. It said these prices would allow a family to pay off a housing loan over nine to 15 years, on payments of no more than 20 per cent of gross monthly income.
Currently, an average five-room flat costs about $380,000 and a 30-year loan can be paid off with payments at about a quarter of a median monthly household income of $5,600.
NOM flats could only be sold back to HDB, said the SDP, with no chance of capital gains.
Separately, open-market flats - that is, akin to normal flats now - would continue to be built. These would continue to be priced on the basis of recovering land costs as well, and would be allowed to be bought and sold for capital gains.
The party also said the new system would be phased in slowly so as not to crash the current market. Existing flat-owners would be given the option to convert their flats to NOM ones - and receive cash and CPF reimbursements from HDB on the amount they have paid above the new flat prices.
Aside from NOM flats, the SDP paper also called for the Housing Board to build a buffer stock of flats to meet unanticipated demand, and to give priority in the ballot to families with young children.
The policy paper was written by four SDP volunteers: PhD student Jeremy Chen, 30; doctors Leong Yan Hoi and Toh Beng Chye, both 48; and property consultant and accountant David Goh, who is in his early 50s. They argued that the surge in the housing market over the last half-decade has put it on an unsustainable trajectory in the light of Singapore's rapidly ageing population. Demographically, they said, Singapore is at a point similar to Japan in 1990 at the peak of its housing boom.
Economic Society vice-president Yeoh Lam Keong said the NOM flat proposal would help delink first-time buyers from the market system. "If we continue with the current system, HDB prices will keep increasing... and the Government will have to keep increasing subsidies."
But, he cautioned, the two types of flats could create a "class system" among flat-owners, with some unable to gain from property appreciation.
Home, The Straits Times, Monday, November 5 2012, Pg B5
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Geesh... finally someone with the smarts to come up with this. It was way overdue.
Property appreciation is NOT the only way to make money.
To invest all our personal savings in 99 year lease hold is financial suicide .. it's simply not sustainable in the long term. Any assets with a Limited Term is a depreciation.
Our current ruling government need to send their policy maker for some financial training. They obviously are so deluded , someone needs to educate them QUICK !!!
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Originally posted by jojobeach:
Geesh... finally someone with the smarts to come up with this. It was way overdue.
Property appreciation is NOT the only way to make money.
To invest all our personal savings in 99 year lease hold is financial suicide .. it's simply not sustainable in the long term. Any assets with a Limited Term is a depreciation.
Our current ruling government need to send their policy maker for some financial training. They obviously are so deluded , someone needs to educate them QUICK !!!
I don't think they're deluded. more like simply disconnected.
and just want to sweep everything under the carpet and pretend everything's fine without doing anything and hoping things with automatically change for the better.
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no capital appreciation? it is better to rent a place and put the balance money in the bank. Good financial planning....
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If you just rent, you're not going to have a fixed asset to fall back on when your investments or the market for that matter, go belly up. And look at the deposit rates today, inflation the last time i checked was hovering around 5%. At the end of the day, a roof (that you own and can't be chased out of) over your head is something you can rely on. Even if the place is a one bedroom studio. Just my personal thoughts. ;)
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Originally posted by That thing:
If you just rent, you're not going to have a fixed asset to fall back on when your investments or the market for that matter, go belly up. And look at the deposit rates today, inflation the last time i checked was hovering around 5%. At the end of the day, a roof (that you own and can't be chased out of) over your head is something you can rely on. Even if the place is a one bedroom studio. Just my personal thoughts. ;)
If you pay rent you won't be chased out.
why is a fixed asset a better place for you to fall back on? if property gives zero return with no capital appreciation, then put your money in any other places that give some returns is still a better investment.
when there is no capital appreciation, may be property market will go belly up first.
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The plan is basically a 99 yr rental plan paid up front. If you go into the details, you can only "sell" it back to HDB whom will refund the money - number of years you've stayed. N
As for current system HDB keep increasing, the current situation is more a case of too much liquidity floating around and pple dumping the money into property. It won't last forever. If it goes out of control we may get into a Japan situation. The Japanese are in their 3rd decade of decline, mainly sparked off by the mother of all housing bubbles
The government knows this and are trying to cool the market, however they are reluctant to allow the market to crash. Pple need to look beyond this and keep thinking the government wants the value to go up. They are not that stupid. Long term it will do them more harm than good.
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raid the reserves?
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Originally posted by charlize:
raid the reserves?
The deterioration of Singapore's infrastructure eg MRT beakdowns, telecommunication breakdown, flooding, high ranking civil servant court cases............... also raiding the international reputation of Singapore's invisible reserves ?
Next, to expect ? Island-wide Electricity power breakdown ?
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frankly, the gabrament should never have let the HDB housing market go "free market" as it is supposed to be subsidised housing..
the idiots let it get turned into a casino because they were collecting "house tax" in the form of GST and Stamp Duty...
greed got the better of them and the whole country is suffering for it...
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single alone people cannot buy flat fom HDB. left over BTO flats also cannot. my neighbor upstairs rent to cheena people very noisy. wanna move also cannot. confirm vote pap out during GE2016. and this whakaw is from which GRC SMC 1? move there ad vite him out.
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is SDP taking inflation into consideration?
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Originally posted by lce:
is SDP taking inflation into consideration?
inflation can be taken into consideration.. and this is better than having to shell out COV which fuels the inflation you're talking about
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Are they going to take this plan and make it theirs?
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The only way to bring down the HDB flat prices is to disallow HDB flat owners from using their HDB flats as collateral for bank loans to purchase new flats or buying private property, like in the past since HDB is a public housing scheme from the government and subsidize by the government. This HDB flat prices increases in the late 90s when the government allowed the banks to give loans to the HDB flat owners and using the HDB flat as collateral. HDB should go back to the basic again whereby they provide HDB loans to Singaporeans regardless whether they are first or second or third time...HDB flat buyers in the open market. This system would protect the HDB owners from creditors should they go bankrupt. I believe this too would actually bring down the private property market tremendously and reduces the numbers of bankrupt Singaporeans due to investment in the private property market or HDB resale market.
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Ok.
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Because of letting HDB flats to be use as collaterals and letting the banks to manipulate the property market in Singapore, many Singaporean families were homeless. Remember that HDB flats is only meant for Singaporeans and Singaporeans should refrain and be protected from the influence of buying and selling trends in the HDB resale market for fast profits gain....ended up many too became homeless.
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Ok.
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