I have always realised that we are overpaying for our subsidised new HDB flats. It is unimaginable that a new executive HDB flat in the 1990s cost only $150,000. Now a brand new one can cost anything from $400,000 to $600,000 depending on the location and level of the unit.

Can you inagine paying $500,000 to $600,000 for a brand new HDB flats in Tg Pagar’s Pinnacle? It is mind boggling. I wonder how much they make from such sales to the public per unit.

By valuing the prices of such popular flat units to the surrounding sub sales of HDB flats it is reasonable to assume that HDB Board may be in fact making money from these sales instead of subsidising it from public funds. So far, no one knows exactly how much a block of flats will cost to be built from the ground up nor how much is one unit’s flat subsidy. The answer given is always very vague and one gets the feeling that HDB is in fact making some profits all along.

Mah BT has spoken that they will loop off 20% from the prevailing sales price of new flats in comparsion with surrounding sub sales HDB prices. Thus, if the property market falls, buyers of brand new HDB flats may in fact incur a loss as the unit is pegged to the sub sales prices though there is a 20% in-built discount. Sub sales prices of flats in popular estates like Toa Payoh and Queenstown have known to fall drastically during the down period from 2000 – 2007. Valuations for a 5-room flat in Toa Payoh was only less than $400,000 all along but have skyrocketted to around $500,00+ lately before the crisis came.

A thought-provoking article nonetheless.

I have a feel that HDB does NOT make profit on paper. But it is a case of left pocket to right pocket… SLA is the one making huge profits, leasing the land to HDB.

The profitability of HDB is a non-contestable debate. A big portion of our huge reserves was generated through HDB flat sales.

This government requires others to be transparent except themselves.
This governemnt investigates others not thmselves.
This government acts legally (arguably at times). But ethically, morally?
:>

My fear is
bcos HDB pricing is somehow so high,
HDB leaseholders can only hope that this price will forever be kept high.
Else….

2) lobo76 on November 24th, 2008 8.40 am I have a feel that HDB does NOT make profit on paper. But it is a case of left pocket to right pocket… SLA is the one making huge profits, leasing the land to HDB.

———————————————

We can only guess given no details.

HDB flats cost so much because, in addition to the cost of the land, HDB factors in the costs of building infrastructure from scratch:
- land clearing
- new roads and carparks
- new sewage network
- new electricity, gas and water distribution networks

All these add up to more than the actual construction cost of the prefab concrete boxes we live in.

There’s alot of fund movements here and there as far as huge profits are concerned within the gov linked corps, therefore, it is impossible to knowif they are profiteering from the public as their figures keep changing, even they themselves are not clear except for the person whom authorised all these movements. Since when did the garment ever disclose anything correctly about HDB pricing to the public eversince the incident about the late Teh CW issue? all we know is that the figure keeps changing all the time, Why? because there is no one to check on them, so they just do what they like. No wonder many of my foreign friends said that our garment is mad whenever I mention about our motorcar and hdb flat prices.

Sad to say, HDB subsidised new HDB flat are just a gimick. Imagine 1 Block HDB got 10 floor, 1 floor got 10 units, and 1 unit average $300K, total sale by HDB are S$30 million. This is just 1 Block of HDB, normally HDB sell 1 Lot of land which consist of few Blocks.

Land & building cost normally is not transparent to us. So where is the “Subsidise” that HDB talk about. To my estimation, one 5 room HDB est. cost should be more than $200K – 250K, unless the land cost is every expensive. So what kind of “SUBSIDISE” Mr. Mah is talking about? Everytime they talk with a lot of hiden data, and where is transparency that they stressing on?

Statistics can lie, as we all know. A clever manipulator will choose stats that prove his point.

As i insist, HDB prices are too high,they will fall next year,because they are a lagging indicator of a weak economy. So, any efforts done by HDB to prop up the market is pointless.

With the latest plan to build more 2 and 3 rm flats, i am afraid there will be an oversupply and pull down their prices, but that’s good news for ppl interested in these flats.

I never believe in the word “subsidy” especially from the gahmen. I would refer it as “sucker” we all are, buying at super sucker price from HDB.

9) Richard Tan on November 24th, 2008 10.32 am
……..Land & building cost normally is not transparent to us. So where is the “Subsidise” that HDB talk about. …. So what kind of “SUBSIDISE” Mr. Mah is talking about? ……….
—————————————-

I applaud Richard for asking the above questions.
Strangely, many singaporeans prefer to just accept what they hear.
This can be a big concern.

Your points are very logical and I support you. To know how much is subsidised, we need to cold hard truth what is the exact cost to build a flat.

To increase the momentum,
I urge TOC to have more articles Suggesting why we need More MPs and put them into the Parl To Ask the many questions of Public interest.

I mean, many Just Accept many things even when they Do Not Feel ok with things. Maybe they have Never Experienced All their questions being asked in the way they would like? for example, can someone justify clearly (to laymen) mathematically and financially what is meant by HDB being subsidised?

We need another TKL to probe into this HDB issues.

It is TOTALLY unimaginable why would MSM radio give what is baselessly alleged anti-gov blog its member the air time on such a high profile radio.

No one can blame anyone for having all types of imagination about this radio program.

We know the MSM.
We hear the rumors.
And yes, TOC has been given so much airtime by MSM.

Now, it gets confusing.

Would other activists get same airtime?
Or How about MPs like SKH or S Lim or LTK ?

I hope everyone ponders about this.

What’s going on? What is REALity?

Asking your MPs is useless, as they themselves do not live in HDB flats. Why would they bother about something that does not affect them, when they can easily get re-elected via the GRC-on-heavyweight-ministers-coattails-route? What they are saying is ‘market subsidy’, but who determines the market price when about 80 per cent of Singaporeans live in flats built by, you guessed it, HDB?

Too many questions left answered, or not answered properly. Too much at stake, especially when times are bad. But do not expect change from a system that helps build the wealth of the state at the expense of its own citizens.

7) TuLan on November 24th, 2008 10.21 am
HDB flats cost so much because, in addition to the cost of the land, HDB factors in the costs of building infrastructure from scratch:
- land clearing
- new roads and carparks
- new sewage network
- new electricity, gas and water distribution networks
All these add up to more than the actual construction cost of the prefab concrete boxes we live in.

===================================

What you have said is NOT TRUE.
- land clearing – included in HDB contractor’s contract

- new roads – built by LTA

- new carparks – as clarified by HDB, carparks are not included in cost of flat. Season parking pays for building carpark which is why it costs $90 per month.

- new sewage network – built by PUB

- new electricity network- built by Singapore Power

- new gas network – built by City Gas

- new water distribution network – built by PUB

17) Johnny on November 24th, 2008 2.29 pm

Yes John, but when they are being questioned, they always like to dumped anything and everything in just to confuse the public which they usually does in other area too. So in the end, their answers are just like no answer at all.

Given that Singapore is a densely populated city with limited space, I don’t expect flats to be sold at $50k.

What disgusts me is that PAP keep harping about subsidizing us when it is actually making a profit from us.

What they are giving is a DISCOUNT, not a subsidy. A discount similar to the one you get when you buy a pair of shoes with 20% off retail price.

Its not even a discount, all they do was super inflating the price to some maybe 300% and then give you a 20% so called discount, they still get at least 250% profit, masok pocket, who knows right? since no one can actually check on them.

Temasek got into the CNBC news about a particular share price thingie… Just caught the CNBC report….

16) poloteaa on November 24th, 2008 2.09 pm
“But do not expect change from a system that helps build the wealth of the state at the expense of its own citizens.”

I totally agree with poloteaa.

In one word, it’s PROFITEERING!

As usual they can’t and will never explain or answer all pertinent questions raised about “subsidy” because it will open up a can of worms. All the toxic skeletons will then come out from the cupboard!

If truth of HDB be told, the little credibility and integrity that’s left of the leaders will all end up in the gutter as too much wool has been pulled over citizens’ eyes for too long.

MP’s representing citizens asking the right questions? Dream on!

They are only good at representing their political party and putting a hip hop show for their bosses!

It helps them to move ahead together while leaving the citizens behind.

feedmetothefish

I like to hear the Town Councils and their investments.
Please keep us up date.
Long Live Coalition Party (SDA, WP, SDP, NSP).

From a Michael Blackman article in AGE

“In autocratic societies, you don’t disappoint your superiors with statistics they don’t want to hear. “Guan chu shuzi, shuzi chu guan” (“officials produce numbers, numbers produce officials”) is what they say in China. ”

Sounds familiar?

IF PRICE HIKES EXCUSE WAS OIL,
IF $120USD A BARREL WAS THE EXCUSE,
AND
WE KNOW OIL PRICE CHANGES VERY VERY QUICKLY,
AND A FEW MONTHS AFTER THE HIGHEST OIL PRICE,
OIL PRICE DROPPED BY OVER 100%!
AND NOW IT IS AROUND 50 USD ONLY.

WE JUST NEED TO ASK OURSELVES,
DO WE EXPECT ANY HIKE TO BE UNDONE?

NOW IT GETS INTERESTING,
WE WOULD THEN NEED TO ASK OURSELVES, WHAT HAPPEN TO THE EXCUSE?

NATURAL GAS OR PETROL TO GENERATE?

NO, LETS NOT RUN AWAY FROM THIS QUESTION.
I LIKE TO SEE WHO CAN CONVINCE ME MY CONCERNS ARE INVALID.

With regards to the cost of each HDB flat, about 6 years ago, i was speaking to a friend who was a sub contractor. He told me that the cost of cement was very cheap and each fabricated unit, which was basically cement & steel was for less than $20k.

I am not including electrical,tiles, toilet bowls etc. But i figure that, it cost less than 50k for a 5 room flat. Cost could have changed since then. All u need to do is check the prices of cement per ton and guess it from there. I am excluding labour cost to intall the fabrication.

I dont think, they would reveal the true cost, it could have very serious implications.

26) stan on November 25th, 2008 9.48 am

…..I dont think, they would reveal the true cost, it could have very serious implications…..

-=-=-=-=

Assuming the above is true, for the purpose of discussion,
I feel that we need to know what are ‘the serious implications’ and to whom this is a serious implication?
The only thing we need to understand is, should there be transparency on the cost of HDB, your roof over your top. Basic need level 1 in maslow hierarchy. If HDB is fully privatised and no link to the u-kno-who, then would things be different? Now, the interesting question : Is there a clear reason for non-transparency ? If so, let it be known. If not, let it be known.

Oh, I kaypoh again. Our PEOPLE’s REPRESENTATIVES would surely help us find out the answer? And there you have it.

What is REALity?

Why is the cost of land factored into the cost of HDB flats in the first place? In essence, Singaporeans are merely LEASING for 99-years a HDB flat unit – we’ve no ownership of the land at all.

The land is purchased by the government, and remains under the government’s possession throughout, and even after the end of the lease period.

Effectively, we have been made to pay for the purchase, as well as rental, of the land both at the same time.

if HDB is really about providing better housing for singaporeans, buildings with higher levels should mean cheaper HDB loans since more people are staying for the same unit area when viewed from the top.

To: Shiiti gloup lehlong;

the Prices of Rice have fallen and Indonesia has 1.5 million tons for export.

UNFORTUNATELY STORAGE FEES FOR RICE IN SINGAPORE IS HIGH NOW AND THEREFORE THE PRICE OF RICE HAVE NOT BEEN ABLE TO COME DOWN(as it should).

SEE THE EXCUSE? HOW?

patriot

The HDB has yet to rebut Forum writer Tan Kim Chuan’s contention that it is “either over-pricing its flats or is profiteering from the property boom”.

Our private property market is now in a downturn. But the HDB resale flat market is still firm due to Permanent Resident buyers pushing up prices.

Thus, HDB’s pegging its new flat prices to similar resale flat market prices had resulted in prices of new flats and resale flats chasing each other in an upward spiral that is detrimental to buyers of both new and resale flats.

The Total Breakeven Cost of a new flat comprise Construction Cost(CC), Land Cost(LC) and Other Related Cost(ORC).

Its Pinnacle@Duxton project has 1,848 units cramped into 50-storey blocks occupying a small plot of land.

From available public tender information, the actual CC component is $150,000 per unit. The onus is now on HDB to publicly disclose the remaining LC and ORC components.

A quick estimate of LC plus ORC is around $80,000, leading to an estimated Total Breakeven Cost of $230,000 per flat.

When launched in 2004, average Selling Price was $370,000 (actual range: $288,000 to $450,000), which translates to an average profit to HDB of $140,000 per unit sold.

428 unsold units were recently relaunched at average Selling Price of $550,000 (actual range: $450,000 to $645,000), which is $180,000 higher than initial launch prices. This arose from the HDB “market-based” pricing approach as market prices of similar resale flats in the vicinity were between $593,000 to $670,000.

Looks like more and more people are having more and more unanswered questions…how long will this situation last?

Guys,
When you talk about how much HDB selling each unit don’t overlook on the interest. If you buy and HDB flat for 300K, you don’t pay just 300K but more than 400K in 20-25 years time

If you calculate the interest payments by a working family, you will find that even with property price appreciation, they will end up losing in the long run. The only one who gains is the HDB. Many households could not afford to pay their arrears and service their mortgage so they end up downgrading and this converts to even more losses for the poorest segment. Yet our well-paid HDB agents continued to encourage people to own a flat, when it is obvious that this is not the right thing to do for some families.

The repyament of loans is contingent on people being able to keep their jobs for long periods of time. With the kind of job markets and the government policies nowadays, many of these jobs are either non-existent or not matched to the skills of the workers. The government naturally accuse Singaporean for being choosy but at their age, many older Singaporean cannot find a moderate pay job. After looking for a job without finding a suitable one for some time, many become discouraged and are no longer counted as “working population” because they are not actively searching for a job (because there are few in the first place). So this explains why the unemployment rate is so low in the last few years. Basically, they are massaged out of the statistics. But they reappear in other statistics, such as failure to repay their HDB loans, foreclosure, etc.

Everyday i see a lot of discontented comments here and on many other news blog. It’s all doing of all you commoner and old folks that grab those little handout everytime election comes around and kick a fuss for the next 3 to 5 years. Do you know how much paper loss both GIC and Temasek Holding is sitting on?

If the local newpapers dare to report it ! Then i think a lot of these people who vote for our hand picked talented PAP will Get A Reality Check.

Don’t even want to mention failed AUD400 million invested in a daycare company in Aust that recently closed down.

It’s the fault of all you naive Singaporean that created the monster ONE Party problem in the first place, so live with it !

Yes, lets admit that we are also Responsible being part of the Nation and being democratic citizens. Whatever complains we give, we are partly responsible. Lets improve and be more pro-active!

I have no questions on this article.
Just that I am not sure if justice and order can co-exist all the time.

35) PayAndPay on November 27th, 2008 7.39 pm Everyday i see a lot of discontented comments here and on many other news blog. It’s all doing of all you commoner and old folks that grab those little handout everytime election comes around and kick a fuss for the next 3 to 5 years. Do you know how much paper loss both GIC and Temasek Holding is sitting on?

God knows! The accumulated total losses to date could have even eaten into our nation’s reserve. Ever you people notice why they are abnormally quiet this round and only sneaking out at time to talk rubbish or things that are not relevant, ever thought they did it deliberately just to divert the attention of the people?

and if someday, someone from the inside can dare come out with the actual figure, that will be the day marking the fall of the ruling party, we have to wait . . .

35) PayAndPay on November 27th, 2008 7.39 pm Everyday i see a lot of discontented comments here and on many other news blog. It’s all doing of all you commoner and old folks that grab those little handout everytime election comes around and kick a fuss for the next 3 to 5 years.

I have also seen alot of comments blaming the 66.6% who voted for PAP.
For goodness sake, don’t always put the blame on commoners and old folks.
a) You tell me actually how many percent of the voters voted for PAP taking into consideration there were so many GRC walkovers.
b) If the opposition is unable to put enough candidates to contest all constituencies and with so many walkovers who to blame.
c) If the opposition is able to form the next government, is there any guarantee that they can do a better job.

So please stop antagonising the common folks. Come out with a strong team then talk.

I am not the enemy of HDB, and was thankful when they introduce the balloon scheme when I was not able to wrestle with the mortgage loan. However, what I was initially paying with the HDB loan was approx. $ 700/-mth, but after taken the maximum approved of the balloon scheme, and upon expiry the shocking news to me is that now I have to pay them $ 1200/- mth. a differences of $ 500/- extra was force to put my burden at a worst staged.

The scheme is attractive but later when all those sum you were owing will penalise you with heavier payment and in the end you have to give up your flat to HDB. Was there a tricked to recover the property by being helpful and later expecting the result to be surrendering the flat.

However, I was lucky enough to be accepted in the hope programme where my wife have to undergo ligation to received $ 50K top-up into her C.P.F and $ 9,000/- in cash award to recover from the confused stage I was in.

I must add to say that MCYS have help me a lot in recovering from my problem, such as upgrading fund of $ 5,000/- and its a credit to their scheme. They are thoughtful and caring in my case.

However, the balloon scheme is what I was not ready to accept after a huge payment was pressure on me. The HDB officer was reluctant to give a thought at first that my wife will received her ligation amount of $ 50K C.P.F top-up soon. However, they later agreed.

Here the reason for people are returning their flats are the one that is caught with the balloon scheme and have to return their flat for good. Perhaps HDB could explained how many of them have taken the scheme and was forced to return the flat would enlighten in this issues.

In my company, senior managers are expected to know by heart the revenue of the company, by region, by product; the growth rate, YoY, QoQ. Are there any abnormalities? If there is, why? what causes it, what is being done, what is the expectation?

Do you think our Super Talented Ministers (who draw the salarys of the top earners in 6 professions) know all these statistics by heart? I doubt so, I think most will fall flat on their face when questioned about the statistics of the ministry they are running.

World class, 1st division my foot.

42) Nick on December 6th, 2008 2.12 pm
Do you think our Super Talented Ministers (who draw the salarys of the top earners in 6 professions) know all these statistics by heart? I doubt so, I think most will fall flat on their face when questioned about the statistics of the ministry they are running.

They are there not for what they proclaimed what they are, they are being placed there to draw top salaries for only 1 reason, to protect the master of the ruling party. what else? everybody knows here in sg.

Sometimes , I wonder this so called” Highly Paid Workers” are Blur that we are Smarter than them!
Lets say ,” if u need to construct a Building where do you find Resources to build it if you have none!”
These “Highly Paid Workers” forgotten , without the Citizen Money and Land , how can they Construct Building to make Money!
Finally, I conclude They use “Our Money” to earn “Our Money” ! Very Funny , Right!

To Gilbert Goh,

Actually for HDB,they would never make any money as the magical formula invejnted by you know who kicks in.

You see there is another outfit called SLA,Spore Land Authority which determines the value of the land they sell to HDB where the flats are up.

So the vale of land is variable,and solely determined by SLA,how to win?
The idea is to ensure that HDB does not make any cent and prove that PAP subsidize the poor and the middle class,a sure way to win votes and they sure do!

No way one can fight with the world class PAP propaganda PR(BS)machine!