Main Stories - Written on Saturday, September 19, 2009 0:04 - 50 Comments
Disillusioned with trying to purchase a HDB flat
The following is a comment by one of our readers in response to an earlier post on TOC, “HDB flats – “affordability will always be there”, says Mah.” We publish it here without edits.
Disillusion
A few years ago, just 4 month shy of my 35th birthday which marks my eligibility to purchase a 3 room HDB unit under the single scheme, I had viewed a 3 room flat at Marine Parade with a full sea view for an offered price of $200,000.
Just when I hit my birthday, the en bloc frenzy started and ever since the asking price for a 3 room in Marine Parade is at least $280,000 and above going for as high as $380,000 for a corner sea view unit.
It has been 3 years and the seller asking prices had not let up, a sign that free market is ever propelling the valuation upwards. The agents told me this is caused by PR buyers and rich investors who had cashed out on their en bloc sales hence are buying the HDB for rental income purposes. This had led the market valuation to be irregular and unfairly spiked by this small group of investors.
The social ramification is that sincere and frustrated buyers had been unfairly priced out. To add to the woe, singles are not eligible to buy direct from HDB and those earning above $3000 are not eligible for singles grant and the cheaper HDB loans. I wrote to an MP years ago expressing the singles plight. I was willing to take a bank loan and forfeit the singles grant but I sought to have my purchase made direct from HDB which is much cheaper than in the open market since I was financing under a single income.
Unfortunately I was told the government policies are pro family and to allow singles to buy subsidize housing may result in social ills. I was shell shocked and till this date I still do not understand how increased home ownership by singles is a societal problem. It is ironic that young couples are now highlighting their same plight as well.
Isn’t it telling that the ‘’reason’’ told to be years back can no longer hold water since the pro family couples themselves are getting the same hit albeit them financing the unit with a dual income. For whatever HDB policies and their rationales in place, they certainly isn’t functioning at least for these two classes of people, the singles as well the young middle income couples, given the ever increasing HDB prices.
I cite these real cases I know :
Two families who lived in a 4 room unit that both families co-owned (they are relatives) had decided to split for space and privacy reasons. One of the childless couple in their 60s had balloted 6 times for a studio unit unsuccessfully and finally gave up. (This is another problem which is a separate topic of discussion altogether.)
They recently bought a 30 over year old 3 room unit in a very original condition for $255,000 including COV. After paying the agent fees on both transactions, stamp duties, legal fees, renovation fees etc the whole unit came up to a whopping $300,000! So even if one was not to select a unit from the matured estate (Marine Parade, Queenstown etc), the average cost of a 3 room unit is still not considered affordable for the majority middle income class.
For a single to take say $150,000 loan at age 35 would mean they are tied to a mortgage till their 50s or 60s, a lifestyle choice many certainly do not want to have. One often misses this other critical point , that is the value that one pay for a flat now say $300,000 will effectively cost an estimated $350,000 to $400,000 after serving say 20 to 30 years of interest. For this couple, they are left with almost nothing in their CPF except for the minimum sum of which half is pledged to the property I think.
I cite another friend situation whose parents are married but not leaving together. She is a single and staying with one parent. Both parents are co-owners of the house. One parent is renting a room at $500 a month and my friend had been paying the rental for the last 8 years so she would have spent close to $50,000 by now.
She does not have an option because she was not at an eligible age to buy in the earlier years and whilst she is now she feels that the current spiked price does not warrant the hefty loan she has to lock herself in for many years. She wants so badly to buy a unit for her other parent and is bearing the guilt that she is not able to provide a haven for her other parent in their golden years. At the same time she knows it does not make financial sense to keep forking the rental cost. These are the citizens out there who are in real conundrums and dire straits.
I hear so very often in newspapers reports of investors snapping up condos and then profiting from the sales. The recent one I heard was someone who bought a high end condo in the east at over $700,000 before it was officially launch. We speculated that he has connections hence had received exclusive prelaunch invites. He later sold the condo for 2 million. It makes me cringed each time I hear rich people out there getting richer through property speculation whilst the commoners are struggling so hard to have a small piece of a haven from a land they call their home.
I have no qualms of people getting rich but what frustrates me is that HDB pricing tails behind the private pricing hence all these speculation has a spill over ill effect on the general public housing pricing. Short of being disillusioned by this free market ballooning which never seem to burst, the alternative lifestyle choice that had crossed many minds is migration. I’ve known friends who had left the country and I still often hear this as an escape route whenever lamentations of high mortgage loans and education stress surfaced. It may just be a matter of time before more will take the plunge and find a new haven somewhere else.
I know a reversal will create negative equity for many but for the sake of our generation the prices cannot keep going up. The government is the only authority figure who can intervene in the free market and bring to par what is irregular by renewed public policies. The US government has done it to save their corporations. Perhaps it’s time the Singapore do so to save their citizens.
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Disillusioned with trying to purchase a HDB flat | The Online Citizen | Alternative Loans
HDB market has been a FREE Market? My FOOT!
As efforts to ‘enhance’ property prices, thus the asset prices of Singaporeans, our Government has been playing with the supply side of the equation, ie. the supply of HDB flats and land sales. Never occur to them that there are growing number of Singaporeans not able to cope up with rising costs of living. They only looking in their own pay slip and those working and living next door to them.
Government policy is NOT sustainable in this matter. Lousy!
I’m not sure if I’m being a cynical 24 year old here, but I’m pretty sure that I would not want my kids (if any) to survive in the cruel society I am beginning to bear witness to in the last few years.
Heck, not even sure if I’d be able to survive given the ridiculous salary market out there versus cost of living. I like living here because it has been home for years, and I don’t want to ‘escape’. But it’s really tough; I’m not even talking about owning a home. Electricity and water bills make me want to cry. I’m in charge of that bill and it comes up to 10% of my former take home pay. I still have mobile/internet/cable TV bills, but that is not as important as the former.
I look at my parents’ generation’s take home versus cost of HDB flats then and I’m just blown away. Basic amenities should NEVER be controlled by the free market because it’s a flawed argument. I do not like that we would probably have to wait until something massive comes along before reform comes about, not unlike the healthcare crisis Obama wants to change for America now.
If our government has not thought about that, it is just p*ss-poor planning. Especially when so many Singaporeans have abandoned our nation for happier and freer lives abroad.
Seriously? Bitching about being priced out of a seaview apartment? #fail
For a start, vote Mah Bow Tan out at the next election since he is responsible for housing policies.
With massive losses in investments, to drain your CPF and also to ensure GLCs are highly profitable, prices would get out of hand.
Anyway, ministers’ pay and GST would probably be raised after election. You voted them, you support their policies – Full stop. There is nothing you can do, except to bitch and moan.
Please take note that PRs are not rich. We also human being. We don’t want to pay high price for HDB. But we are supposed to pay. Although we don’t have subsidize as citizens, we are pay income tax, corporate income tax and GST same as citizens. It is ok for us. We are not blaming anyone. We understand. Citizens must be first. But reducing subsidize for PRs is not good sign for Singapore in future. Singapore will sure miss talented PRs’ young generations.
Cheers!
////, singles are not eligible to buy direct from HDB and those earning above $3000 are not eligible for singles grant and the cheaper /////
contradiction here – if floodgate are opened to singles, wouldn’t it drive prices higher?
//////I cite another friend situation whose parents are married but not leaving together///////
contradiction #2 here – if floodgate are opened to divosrsee, wouldn’t it drive prices higher?
///////For a single to take say $150,000 loan at age 35 would mean they are tied to a mortgage till their 50s or 60s, a lifestyle choice many certainly do not want to have.//////
What did they do with thier money before reaching 35?
In short, let Public Housing be Publicly Affordable.
Let bungalows be very expensive.
I don’t care.
I don’t care about the rich .
Two PR siblings of age 21 and above and whose parents are not PRs are allowed to buy HDB resale flats. Singaporeans like Disillusion have to wait till they’re 35 before they can buy one either by themselves or with one other above-35 unmarried Singaporean. So two China Ah Tiongs siblings could come here to study at NUS, NTUor SMU, secure PT status, and buy a resale flat. And if they pay cash for the flat, they are allowed to sell it after occupying it for hust one year. Great deal for PRs but, as usual, at the expense (literally) of Singaporeans including Disillusion..
Fellow S’poreans:
Mah Bow Tan in Parliament declared that HDB new flats are “HEAVILY subsidized with a MARKET subsidy”.
His idea of MARKET subsidy is mere illusion — there is actually no CASH subsidy given in the pricing of new flats, and HDB is actually making big fat profits out of selling its new flats.
Full details of the HDB Flat-Pricing Scam are in following link:
“ROOT CAUSE of Sky-High HDB Flat Prices”
http://groups.yahoo.com/group/Sg_Review/message/6092
For those who want to express unhappiness of PAP’s or LHL’s anti singaporeans policy (6.5m population targeting) and unaffortability of HDB flats. Please visit the following link to sign up for the petition. Let your friends and relatives know to do a part as singapore citizen. Thank you.
Hello guys, if you want any change. do remember to vote carefully in the next election. That’s the only way you guys can change the policy.
OK #13 Yang and #5 Gigi,
I will vote carefully in the next GE, but pap is smart, when near to election time, price of HDB flat will reduce tremendously, COE will reduce, utility will reduce, and income tax will reduce and pap will give you bonus, shares etc…. so they will still win the election, Mah boh tan will be safe to collect million dollar salary, 6 months after the election, price will go up again, GST will go up etc…. this is a cycle, I observed it for so many years. Right now people complain and complain but no use. Unless the young generations unite and vote the pap out, then it will be real reforms and change for the better
Maybe it’s a sign that we are going the way of Japan where property ownership is only for the rich, at least in cities. But perhaps it’s high time as well to go Japanese in the next general elections.
One of the first policies that PAP had during the early years of nation-building was affordable property ownership for all, because only when you have a stake in the country will you want to stay and fight alongside your countrymen when difficulties arise.
If many continue to not be able to afford houses, there’s really nothing stopping the younger generation from packing up and leaving should good opportunities present themselves. Just my opinion.
In spite of all that the govt say about looking after the welfare of the country, what this govt is doing is to load its citizens with mountain of debt, while they get to enjoy their overpaid salary and perks. Kinda remind me of old china, where the emperor and ministers live in luxury while the common folks suffer in hardship. Of course once a while, the emperor will give a little freebee here and there for the common folks to show how “generous” he is and that the people should be grateful to have him rule over them…
HDB market pricing is a LIE. With 80percent of market share in property market, they are running close to a monopoly. They become the market and detemine the price. In the private sector, this is call profiteering. Valuation is a farce, with the govt telling them how they should value the resale flats. This way, when the govt market the new flats, they can ask exorbitant prices, even after the so call subsidies.
All the govt talk about subsidies and affordable housing is really baloney and lies. If your raise your prices really high (and profit say 100%) and give 5% discount, do we say that you are generous? or do we say you are pretentious and deceptive.
PRs have deep pockets. They can fork out 70-100K cash for a flat. can s’porean do so, especially young families without the help of their parents CPF? Why are 90 percent of S’poreans not confident about retirement? That is because they are settle with debt, and left nothing much to live on. The 1st generation got their flats cheap, so already fully paid up some years back and have some money for retirement. What about current generation who has to pay so much for the same space and clear out their CPF? Will they still be able to retire?
Pinkie Hum Junior likes to Wag Tail
There is only 1 option left.
clever people in the government with very clever policies…pay and pay lor…what to do…we chose them to rule our us mah!
SG = Screwed-up Gabra-men [not Singapore Government]
BUG = Bloody Useless Government [not the H1N1 flu bug]
MSG = Money-Sucking Government [not MonoSodium Glutamate]
PAP = Pay And Pay
PUB = Pay Until Bankrupt
HDB = High Debt Bankrupt
[ bloody hell, HDB new/resale flat prices so bloody costly, no thanks to that bloody shorty $2m Minister Mah Bow Tan! ]
MBT = Minister who Bullshit in Tampines ward
[ in reference to Minister Mah's "half-truth" statement in Parliament that HDB new flats are "heavily subsidised with a market subsidy" ]
TCM = Talk Cock Minister [not Traditional Chinese Medicine]
WKS = Won’t Kena Sacked
[ in reference to $3m DPM Wong Kan Seng, accountable for the Mas Selamat Great Escape Monumental Fiasco --- that led to Singapore becoming the "Laughing Stock of the International Community" ]
PAP say: Pay Peanuts, and you will get Corrupt Monkeys!
S’poreans say: Pay Big Bananas, but still get Incompetent Chimpanzees !!!
ST reporter asked HDB–how many lessee are in default on HDB loan.
HDB REFUSED to tell reporter.
Reporter did not probe further .because she woerks for 154th ranked ST—ricebowl at stake..
Last known figure was one in twelve in default.—probably one in ten now.
Situation is so bad that HDB has to create a new profession—-default councillors
Meantime, MBT says his pigeon-holes are AFFORDABLE.
When the collapse comes it is going to make US sub-prime look like a non- event.
The only factor holding up this BUBBLE is the 1,700,000 FW/FW/all comers in our midst.—of course this creates myriad of other social problems
PONZI would have been proud of HDB.
To: Wah Bian Ah,
Please do not use capital letters for your entire post. It’ll not be allowed.
Thanks.
To: theonlinecitizen,
Point taken, my apology.
It was reported in the Straits Times on 20th Sept that the number of new HDB flats were built:
YEAR 2006: 2400 New flats – Are they enough?
YEAR 2007: 6000 New flats – Are they enough?
YEAR 2008: 8000 New flats – Are they enough?
YEAR 2009: 8000 New flats – Are they enough?
But;
Nearly 25,000 couples were married each year.
Tens of thousands of new citizens were added each year.
Nealy 80,000 PR were added last year alone!
Many thousands of en-bloc owners are flushed with millions of dollars to tilt the market.
Singapore has become an a money making nation where the govt., especially Mr Marlboro Tan do not care about the citizens anymore. Despites so many voices from the public and feedback from other MPs, HDB and Marboro Tan preferred to turn a deaf ear to increasing number of poor citizens who cannot afford the high COV and HDB prices..
What subsidies for first timer? It’s not even withdrawable or sufficient to pay for the high asking COV! Dear Marlboro Tan, we young generations of SIngaporeans are getting smarter and will not be fooled by your unremarkable irresponsible & out of touch statements that you made in parliament.
If ever PAP lose the next election, Marlboro Tan has to be the main person responsible! Thanks to the nonchalant attitude and policies that you shown to Singaporeans.
Pls click to read all the voices from young couples who cannot afford HDB now.
Take note, more than 800 people have signed up.
http://www.thepetitionsite.com/1/lower-hdb-valuations-or-build-more-affordable-hdb-housing-for-singaporeans
There was a time, where HDB started building more flats, then they
started building bigger flats, because that is what the people wanted.
They even phased out 3-room flats as HDB flats then were really
affordable and most people could really afford more space and have
a better living environment.
Then they realize that that was not very profitable, so flats become
smaller and smaller, retaining the same 4-room and 5-room
classification, while shrinking about 10-15% in size.
Then they realize that profitabilty can be enhanced, by building less
HDB flats, causing supply to shrink and prices to rise.
When the prices has risen too much, guess what? They started building
even smaller flats, 2 and 3 rooms and priced them according to market,
and use them as a benchmark for affordability.
Imagine, using 30% of HOUSEHOLD income for a 2 room flat is
the benchmark for affordability. The strangest thing is most of the
electorate will believe, because if this word is repeated enough, it
becomes the truth.
If the younger and better educated generation is going to lap that
all up, its their problem. As far as I see, they do not really mind.
I think Marlboro T. is partly responsible for pushing property prices up. With new HDB priced according to open market, they have made a lot of profits, but at the same time has also pushed private residential prices up.
I, for one, wouldn’t want to spend 500k – 600k for a HDB. At this sort of prices, I’d rather just pay for a private apartment. Also, if I bought a new HDB flat at open market rate previously, when I want to sell, it is unlikely I’d sell at my previous price. I’d definitely want to profit, and hence, HDB prices keep edging upwards. As they edge upwards, this forces private property prices to also edge upwards. A cycle – created by themselves.
Also, with the increasing number of PRs, the number of HDB flats would very likely be insufficient. They probably didn’t cater enough. Those with sufficient money set aside, would also likely invest in apartments for rentals to provide for the PRs.
A bubble is forming they say, but how can they not be responsible for it at all I really don’t know. Well, it seems the way this bubble is going to be burst is how they handled bubble gum. By stamping down as usual. :)
A paradigm shift is needed and sacred cows of SG need to be killed:
I agree with the author that HDB prices need to come down. this will displease the older generation but if the young is to stay in Sg and not migrate, this got to happen.
Employment act must be legislated into law and a minimum wage must be implemented.
Pension for true blue Singaporeans. Reserved jobs for SGporeans, ala Dubai.
NS – use professional army. Air Force got as many planes as ASEAN combined.
My neighbour works in the construction industry, building condo and previously his companies tendered for HBD flats.
The cost of each flat from the 4 rooms to 5 rooms even at today’s raw material prices is only between 60 to 90K, not counting the land cost which is from the Land Authority. ( right hand to left hand ) If a construction company tenders for a HDB project for 1000 flats at 300 to 400 million, you do the sums, its not difficult. This is only the cost to the HDB which also includes the carpark, walkways, a “small” playground. We pay 15 to 19 K for a lift upgrading and extra room, the cost is not more than 2 to 3K! The government is making more than the private developers of the condos. He laughs at us but what to do. Well if we are smart enough ,we all should know what to do, so he says!!!
With the prices these days, a downturn will hit them harder. The defaulters who bought at these high prices will be in for a very hard time, 230 – 350 K for a new HDB flat is just too high. I an concern for the ordinary folks who earn earn a combine of not more than 4 to 5 K a month. Howa re they going to afford a flat.
even my hdb castle was handover to me when in the 1st case was supposed to be for my youngest brother which fortunately he did fared well and now lived in a condo..as usual luck is on my side all my younger siblings had 1 goal in their minds..makin me as comfy as i can..henchforth the hdb castle is in my hands..legal/debts hassle free…i have numerous offers rangin from the 1st $199k till today @ over $250k or even more..i have never tempted to sell even to the extend of my 2nd younger bro who wants me to stay with him @ his childless spouse..i still say no..for i am a man with badbones…if you were to ask me to start from ground zero..you would had seen me livin under kallang bridge lioa..
for you shortlegg marborough..upp YOURs!..affortability me a s s….
~sigh~
The Singapore Daily » Blog Archive » Daily SG: 21 Sep 2009
[...] The Secret Political Blog: Can’t afford HDB flats? You deserve it if you’re poor – TOC: Disillusioned with trying to purchase a HDB flat – The Temasek Review: HDB: new flats sold at “significant discount” – Hard Hitting in the Lion [...]
Read that the 3 room flat in Marine Parade in 70’s cost S$7.5k/-. Today, it costs S$350k minimum. This is an increase of 47 times or 4700%. It would be a boon if our salaries had increased by this kind of ratio and we will all be happy beings in Singapore. An engineer then earned probably about S$0.6k. Today, they have start pay of S$2.8k…thats only 4.6 times or 460%. The HDB pricing had run away 10 times faster….(reading about the HDB as profiteering from the common man in the street is most discomforting…I hope this is not true). KPI for HDB should not be how much money they make, for the target set year after year can only be higher and higher….thats what KPI will end up doing. The KPI for HDB could well be how much lower the price of HDB they had made them to be as public housing, how much they managed to reduce the price of construction costs, etc….yet increase in quality, and how many % continue to be reduced in the number of homeless Singaporeans) . Such targets could be set by the tax payers. The best model for the HDB is still a cost minus model based on true cash subsidy for Singaporeans. In good times….costs move up….provide subsidy by a % from tax payers money, ERPs, COEs, which I presume supposed to be used for. When times are bad, costs move down, provide subsidy by % from tax payers money as well. In good times, more income, more income tax revenue, in bad times, lesser income, lower tax revenue…all goes in synchrony….up…down….together….there is sanity, there is logic. Citizens First should be the way. Many countries do not allow sale of the public housing to foreigners, regardless of residency status unless as citizens. They are only allowed to buy designated areas of private properties that are about 3 to 4 times the pricing of the public housing. This way, they also know where the clusters of foreigners are and not ended up with many parts becoming foreign owned. They attract only the truly rich, who will bring with them the ooomph to the local economy, with talents and capabilities. People like Jet Li, Jacky Chan, sure. If Warren Buffet and the likes of the tycoons from Asia want to become citizens, open our arms. We need such people to feed our casinos as well, not ourselves. We will be parched.
Could not afford a HDB? Perhaps should look into JB or Batam where houses are more affordable. Our MIW once said that JB could be a option for old folks to retire there if they can’t afford to retire in SG. Will our young couple makes JB or Batam their homes too while bring along their aging parent to retire there if they couldn’t afford a HDB in SG?
I agree with the author. I strongly felt that Singaporeans had been betrayed by the PAP. As a citizen, since we were a child, we had been taught to love Singapore and defend the country because this is our home. As Singaporeans, we have to serve NS and attend ICT every year and pay for income tax and GST to fulfill our duties and responsibilities as a Singapore citizen.
A couple of months ago, I also encounter similar experiences as the author. After working for more than 13 years, and being eligible to purchase a HDB flat, I suddenly found that I cannot even afford to buy a 3-room HDB flat because I am not eligible for a HDB loan and grant because my pay is more than $3,000. As single, I am also not allowed to buy a new flat. If I were to take up a bank loan to purchase a resale flat, I have to pay 5% of the flat in cash, other than the COV. So, if I do not have enough cash, how to purchase a resale flat?
Even if I were to get married to be eligible for the HDB loan and grant, I also need cash to pay for the wedding expenses, dinner, house renovation, etc. Again, no cash how to get married? So, without a house and a family, where is the home I am taught to defend since I am a child?
With the influx of foreign talents and PRs pushing up the HDB resale market and pressing down the salary range, I felt that Singapore is not worth defending anymore, because Singapore is no longer the home of Singaporeans. Hence, what’s the purpose of wasting the time of Singaporeans serving NS to defend a Singapore that has been ‘colonised’ by foreign talents and PRs, who are taking away the houses and jobs of Singaporeans? Why should Singaporeans lay down their lives to defend a Singapore that is a home to foreign talents and PRs?
Moreover, unlike the SAF regulars whose salary are given a premium above market rate and paid a large sum of money when they retired from SAF at the age of 50, a NSman is not pay by the SAF to defend Singapore. So, why should a NSman laid down his life for Singapore when in peacetime, the SAF regulars are paid more than a normal NSman?
test test.
KopitiamApek
post #8 on September 19th, 2009 11.24 am
////contradiction here – if floodgate are opened to singles, wouldn’t it drive prices higher?////
do singles not have a right to public housing?
////contradiction #2 here – if floodgate are opened to divosrsee, wouldn’t it drive prices higher?////
do divorcees not have a right to public housing?
also, why the negativity from someone who harps on being positive? you seem to resent singles & divorsees, to use the word “floodgate”.
////What did they do with thier money before reaching 35?////
good question, if the younger generation know that all that they work for will not give them a comfortable life when after retirement, is it so wrong to enjoy the journey (growing up & old) than to ponder a retirement that is likely filled with uncertainty?
is the destination more important or the journey?
Let’s do an ‘Independence From Foreigners” just like what LKY did “Independence from the British” 44 years ago.
34) Anonymous on September 21st, 2009 6.52 pm
Being Singlea and divorced in Sg is FAILURE in PAP’s eyes. except His daughter and second son, because their gene are different from ours
Serving NS is to enslave our thinking, BE OBEDIENT ! BE SLAVES !
FT are talents, fre etheir mind and so they craete jobs for singaporean, according to PAP’s theory
People, VOTE WISELY in future GE, break the chains casted on us !
May ALL THE OPPRESSED PEOPLE RAISE THEIR VOICE AND CAST THEIR VOTE FOR A REAL SINGAPOREAN’S SINGAPORE !!!
he’s lamenting that he cannot afford a corner unit with a seaview? Try buying a flat at woodlands, i believe you can get a seaview and jb view to boot. 3 room flats there 250k is more than sufficient to cover the valuation + COV.
There can only be so many blocks facing the sea, especially in a mature estate.
Want cheap want fresh, want near the sea? You want a unit with such good qualities, everyone wants it too, and there’s bound to be lotsa people willing to pay a premium for such a unit.
There’s limited supply in mature estates unless hdb decides to buy back the flats and rebuilds a super high rise like 50 storeys blocks to accommodate the demand.
Here’s the thing, someone wins, someone loses. If they allow hdb prices to crash, what about those who already bought them at high prices? Put yourself in the shoes of those people, if you already plonked 500k into a hdb and suddenly it drops to 300k. I think you’ll be hopping mad too. In this situation what’s going to be fair for you, will not be fair for the other person affected.
So unless HDB decides to break the bank and covers those people’s losses. There is currently no real feasible way to salvage the situation.
Allowing cpf (retirement fund) to be used to purchase housing is one of the biggest factor that cost this mess.
Sure I figure every singaporean won’t mind living in a high floor seaview hdb flat that only cost them $100k, as much as I would really like to shag Angelina Jolie or that hot midget in the bar with a club leg and wears an eye patch.
It’s kinda too late to salvage the situation or to bring prices back down to earth. Unless the government decides to allow hdb to bleed, ie: to compensate all citizens who are affected by the sudden plunge in prices.
I can imagine any other way to make hdb prices drop.
Having read this article, and being concerned about HDB affordability myself, i went to HDB website and did some back-of-envelop calculations.
The first thing that i needed to define was affordability. Many commenters have lament about affordability without stating what that means. To me, I simply define it as 25% of my income because to me, it means not using any cash to pay for my house. After all, i can’t take out the money, so teh money is as good as not there. Since CPF is 34.5% (20% employee, 14.5% employer), it makes sense as i can service my house and have 10% income for medi and savings.
One often stated principle of housing is to buy within our means. But how do we define what is ‘within our mean”? So i simply list all the houses in order and match it with the corresponding house size. Say if I am the 200,000th richest guy in SG, I will stay in the 200,000th house according to size (which is a 3rm flat).
To cut the long story short, if you stay in an average price flat (not seaview prime flat), you will need to make at least $4,000 in household income for your flat to be affordable (i.e. 25% of your income).
Basically, Households who make less than 4k are screwed. Of course, this raise an interesting question- why there is no big hoo ha over the prices yet? After all, almost half teh population earn less than that amount.
The short answer is that this policy only screws the younger generation over. and the younger generation (25-40) is disproportionately under-represented in this income group. Hence, there are only about 5-9% that fall through the cracks. Not to say they are not important, but this explains why there isn’t a major revolt against the high housing prices. (not enough extremely unhappy people).
Of course, this problem is growing as more young people enter into the property market and expectations of living standards increase.
*i used all publicly available data from HDB, Singstat. If anyone wants to discuss more abt the numbers, can contact me.
by allowing public housing prices to escalate like no tomorrow, HDB is one of the root causes of social issues.
1) racial quota, restricting sales for locals (any racial quota for PRs?)
2) escalating prices across the board
3) profiteering from new units
4) profiteering through ballot exercise
5) lack of social security, with too much income tied to paying installments, less disposible income, locals get blamed for not spending enough. lol…
6) hindering couples from getting hitched
7) hindering couples from planning from raising children
HDB can afford to charge less for newer units but greed is a problem. can HDB lead by example & moderate their profits? otherwise how to expect salaried workers do likewise?
it’s one thing to tell people to live within one’s means, its another to rise the cost of living beyond the means of most.
Housing monopoly by the state one would imagine that to change the shortage situation is a matter the gahment could effectively address without any complication from any thirdth party. Land are gahment owned as well. It boiled down to policy to keep the housing market value high. It is operated like a commercial businese. Sinkaporean must wake up to the fact that the ruling party do not have their interest at heart except maybe during the GE. Housing is a basic human right and it is the basic building block of a home. Rich foreigners are buying houses for investment and not for living we all know that. There should be restriction on foreigners owning HDB housing to give Sinkaporean a chance to own a place called home. Has our gahment gone so out of touch that they do not know what is going on? I suspect because MM Lee did not say anything on this issue, no other ministers in the cabinet dare to raise it. It was like Mao China when the whole country was breaking up and no one dare to tell him that his policies was destroying the country. No major change until LKY is gone.
“I suspect because MM Lee did not say anything on this issue, no other ministers in the cabinet dare to raise it”
Why did MM Lee and ministers want to raise it in first place when they are also the one who benefit from it ? Aren’t these are billionaire and millionaires, and what these rich people do with their money other than place them in investment. How about in property investment when gahmen know information we don’t ? Did we not remember that LKY and his family get discount for property somewhere in 1998, and Woody act blur to move on and clear them of corruption ? Isn’t there is a law passed to prevent private investigation of gahmen and ministers ? Does that tell us something about the crony family business affair ?
It’s also important to remember that just FIVE years ago, HDB prices were still manageable. A 3-room flat in clementi can cost around 100,000. Now it’s more than twice the amount!
Back then the Pinnacle held its first sale, top units priced at 350,000. That was astronomical by those days’ standards. Today the same top units are priced 700,000!!!
The thing is whichever way, HDB makes. Imagine this, when you buy a house from HDB first hand at $300,000, 5 years later when you sell, you manage to sell it for $400,000. What happens is that any new flats being sold in the area you sold in would start going for around $400,000, and this goes on. That’s where the bubble is really growing.
See the gap between HDB prices and private property, it has narrowed down considerably. HDB is making all the money that 1st hand owners are making. But the difference is that previously, Initial HDB prices were not so high. Now, it is so much higher, and who would really sell at a loss? People would only want to sell higher, and this is making new HDB flats not affordable for the young homeowners as open market prices of HDB are high.
HDB is really what is driving property prices up a lot., though they do not want to admit it.
38) mice is nice
I do not resent singles and divorsees, it is you who is accusing me f being so.
My question was ” wouldn’t it drive prices higher?”
is the destination more important or the journey?
yes true, but it will be a journey with great short start and a long miserable ending.
and I am sure it is someone else’s fault
KopitiamApek
post #48 on September 25th, 2009 12.36 am
////I do not resent singles and divorsees, it is you who is accusing me of being so.
My question was ” wouldn’t it drive prices higher?”////
keke, my bad. sorry.
currently with public housing policy no, even if the policies change to allow singles & divorsees freer access than before. such policies do have a positive effect (1) encourage rootedness to S’pore, (2) spur singles to date, get hitched & hopefully have babies
not all are single by choice. financial woes is a major bugbear to finding a partner. there is no good reason to add additional burdens. its a lose- lose-lose situation.
////is the destination more important or the journey?
yes true, but it will be a journey with great short start and a long miserable ending.
and I am sure it is someone else’s fault////
currently the journey (not just the start) is painful & long enough, if the end is just more of the same what are the young working for?
how do you know the ending will be long & miserable when the start is not great?
I have heard too much that alot of the PRs my friends are buying our HDBs and rent it out to reap a profit yet those 20000+ applications in this coming half yearly sale are desperately looking for a flat. How ironic?
Please , can the govt do a bit for the concern on the citizen? Can you stop those PR from exploiting our rights to have a so called affordable home for us fellow singaporean. Put a stop to those PRs to rent out. HDB flat primary purpose is to have a affordable home for Singapoean. I dont see it happening? We dont need an ever expensive living society but a socially concerned govt that will make our life in Singapore meaningful. How ironical that this time round we singaporean are force not to invest in Johore but to buy a house there leaving no chance on those expensive and difficult to get HDBs, while the malaysian(SP PR) are buying our HDBs renting out…Fustrating!!!!!!
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This reminds me of a story 30 years ago when the Malaysia and Indonesia gov decided to become richer by discriminating against the local chinese. The result: They decide to come to sg and sg becomes wealthier as a result, even though still slower than Hongkong, taiwan and south korea back then.
If the Johor gov has some talented ppl and smart ass, they would suddenly attract all the wealth to Johor and sg is doomed liao. Cos everyone will be migranting over there, malays and chinese lol.
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Uncategorized - Jan 15, 2010 10:12 - 126 Comments
It is affordable – Mah Bow Tan
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Uncategorized - Jan 15, 2010 10:12 - 126 Comments
It is affordable – Mah Bow Tan
More In Uncategorized
- Rebutting Law Minister K Shanmugam
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