Give us HDB flats AT COST, not 30 yrs Mortgage Enslavement!

[Goh Meng Seng]

... and the prices have been going up.... if you like this context..

anyway... "HDB is your investment " does not say that you will definitely, stamp and chop, make a profit from your flat... but most people like to assume otherwise

Precisely. The whole logic is this. The opportunity cost of high HDB prices vs putting money into CPF, which is more viable and sound?

Prices peak at 1997 last time. The resale market is just catching up with 1997 prices. This is more than 10 years already. So, do you mean to say this is "increase" in prices? Nope. It is relative and it may not always be so.

Goh Meng Seng

 

[ChaoPappyPoodle]

HDB homes can be segregated into three groups -
1) already paid up in full
2) still paying up
3) waiting to sign up

Within each of these three groups, they can be segmented further but for any policy planning, they should be grouped as such as a first step.

Monetizing HDB properties implies using a property to obtain cash. What it is then used for is not essential to the issues here.

The issues is affordable housing and having sufficient funds for retirement at an age comparable to other first world nations.

Monetizing a HDB property and profiting from it implies that prices have risen. If prices rise in accordance with salaries then it is fair game. BUT if prices rise beyond salaries then issues will arise.

Using funds for retirement to purchase a home is a dumb and silly way to go about things and yet the PAPies want this to be the stadard procedure for the masses.

Secondly, the younger generation will have major issues purchasing a flat, an affordable flat if the PAPies vision of monetizing is seen in its proper perspective.

This country is too small for property speculation even in the private homes sector. When monetizing is fair game in the public sector homes, you will find that those that are still paying for their homes or waiting to sign up for a home to be in great distress for most of the rest of their lives.

This isn't an ideal aim of any good government. All governments, except the PAP, try to provide decent housing at an affordable price and allowing their citizens to pay for the housing while at the same time have enough to tide them for their old age.

The PAPies have nothing but to increase housing prices and at the same time ensure that Singapoerans will not have enough for their old age. This is excerbated further by the lack of spending on healthcare for the population which disaffects the aged even more.


Any new policy should take into account of the three groups stated above. Those that have already paid may not have sufficient funds for their old age.

Those that are still paying face strenuous daily issues paying for their government provided homes. IF they face a tough time during any one of the many economic cycles during their lifetimes, then they may lose their homes and their family.

Those still to sign up should not have the same issues as the previous tow groups. Any new policy should ensure this otherwise the policy is doomed to failure because it doesn't tackle the dual problem of affordable housing and sufficient funds for retirement.

 

[Zombie]

Prices peak at 1997 last time. The resale market is just catching up with 1997 prices.

last time big increase in 93, 94, 95, 96 and big crash in 97
recently big increase in 06, 07, 08, 09 and then big crash in 2010 when you suggest hdb at cost?

just joking

btw, since your argument is about buying direct from hdb, it is wrong to compare resale to resale like speculative activities...

 

[Ramseth]

...argument is about buying direct from hdb, it is wrong to compare resale to resale like speculative activities...

Mah Bow Tan already said. New flat sale prices are pegged to market prices minus subsidies, not costs of building new flats. New flat prices are also so expensive exactly because resale market prices are rocketing.

 

[aurvandil]

Mah Bow Tan already said. New flat sale prices are pegged to market prices minus subsidies, not costs of building new flats. New flat prices are also so expensive exactly because resale market prices are rocketing.

And the resale prices are skyrocketing because from 2003 to 2008, Singapore's Total Population increased by 17.6%. The number of HDB flats increased by only 1.2%.

As long as PAP has a lberal FT policy and a tight HDB builiding policy, HDB prices can be kept up indefinitely.

 

[Zombie]

New flat sale prices are pegged to market prices minus subsidies...

which is why, when you monetise the flat by selling in the resale market, you also monetise this subsidies... hopefully you know what i mean..

 

[Zombie]

And the resale prices are skyrocketing because from 2003 to 2008, Singapore's Total Population increased by 17.6%. The number of HDB flats increased by only 1.2%.

I think we can blame the BTO system... it is a good system to control stocks, but definitely not a good system to keep up with the market demand...

 

[Papsmearer]

One seemingly myopic alternative is to rent lah .... then die die protect the cashout windfall as retirement nest-egg & dun be a sucker again ... such an unsophisticated way of renting to death may in all eventuality turn out to be the most savvy.

Won't that be a slap in the face & an ultimate irony to one key pillar of our Singapore Miracle Story " over 80% Home-owning nation " ?!

I have advocated and will continue to advocate for unconventional means of living in S'pore. I have friends who buy in JB and commute a few days a week. With the technology today, u can work from your home office and most clients would'nt even know u are not in S'pore. At least 300,000 malaysians living in JB do the commute every day to singapore. U got to play the game the way they play it. If you play the game the HDB/PAP want you to play, you will lose. The initial acquisition cost of real estate in JB is half that of S'pore and its freehold. The other costs of living eg. food, maid, etc. are 20-30% lower every month. Earn S'pore dollars but spend in Ringgitt. That's what all the FTs do. They earn SGD and than spend it in Rupee, Renmibi, etc. The purchasing power is so much more.

 

[Ramseth]

which is why, when you monetise the flat by selling in the resale market, you also monetise this subsidies... hopefully you know what i mean..

Whatever subsidy you monetised will be demonetised when you buy another new flat through resale levy, or when you buy a resale flat at market price without subsidy.

 

[Papsmearer]

MBT is thinking od people with more than one home. If you only own one home, you can't monetize that home without buying a new one. It's not like owning shares or bonds. MBT has been shown to be lacking in principles for not allowing public information, HDB costings. We should not take any of his word at 'cost price'.
.....................................................................................
MERDEKA!!!!!!!!!!!

A united front against the PAP. The aim is MERDEKA!

Chao, well put, I couldn't have said it better myself. Fantastic stuff.

 

[Zombie]

Whatever subsidy you monetised will be demonetised when you buy another new flat through resale levy, or when you buy a resale flat at market price without subsidy.

that is another story liao ...

 

[aurvandil]

I have advocated and will continue to advocate for unconventional means of living in S'pore. I have friends who buy in JB and commute a few days a week. With the technology today, u can work from your home office and most clients would'nt even know u are not in S'pore.

Sorry but I think the PAP has already stolen your idea. They however would like the older Singaporeans to adopt your "unconventional means" of living. The following is what I had previously written on what I think their long term plan is:

My thinking is that they are probably trying to make emigration an attractive option for older Singaporeans. Malaysia for example has a silver hair program which seems to be designed to attract Singaporeans who have retired. If you sell your HDB flat, you would have enough to make the deposit as well as buy a modest place to stay. The recent introduction of allowing MediSave in Malaysian hospitals might be an indication of a long term policy of encouraging elderly Singaporeans to leave Singapore and retire elsewhere.

This would then free up housing and other resouces in Singapore which can be allocated to "cheaper,faster,better" FT who can continue to be allowed into Singapore by the thousands to make the MNCs happy.

In one bold stroke, we

1) Export the aging problem
2) Import FT to solve the expensive Singaporean worker problem.

 

[Papsmearer]

Wouldn't reverse mortgage be a simple way to monetize investment

Just use this example. I am 65 and retiring. I bought my 5rm for $70K 25 years ago (fully paid up) and today it is worth $500K. If I sell it and buy another new HDB flat I need to pay levy of $50K. I can buy new 3rm flat in Sengkang for $130K. Math $500K - $50Klevy - $130K new flat = $320K cash.

At 65 years old, I have new fully paid up 3rm flat and $300K in cash is not too bad. After all my children have moved out and wife and I want a smaller place.

Fast forward another 15 years, I am now 80 years old. My 3 rm flat is now worth $300K (today's $), I can reverse mortgage flat for 20 years and get about $400 a month. This will be for 20 years or till I am 100 years old.

Sound pretty good and lots of monetizing here. GMS what do you mean by not being able to monetize. Perhaps I am missing something.

Facts

Media price of 5rm flat $500K --http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatMedianResalePrices?OpenDocument


Selling price of new BTO 3rm flat in Sengkang - http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/61B5EB4C03E73704482576E70037E37B?OpenDocument

Reverse mortgages sound good, but I can tell u they are a very expensive option. the bank has done all their homework and have a room full of actuaries working for them. For a lousy $400 a month, you will lose your asset for ever. Your probability of living to 80 is not good, and 100 years old is very remote. Highly likely the bank will be more than happy to finance u if you are still alive at 80, and pay only 5 years more before u die i.e. at age 85. So you would have received $24,000 but lost a $300K asset.

 

[Papsmearer]

Sorry but I think the PAP has already stolen your idea. They however would like the older Singaporeans to adopt your "unconventional means" of living. The following is what I had previously written on what I think their long term plan is:

My idea is their worse nightmare. They are advocating the portions for older people eg old folks home, medisave use in malaysia, etc. My idea is that for the 15,000-20,000 people every year looking to buy their first home, they should all look at JB, and buy there. Imagine the HDB losing the profit of 10,000 new flats, profits of at least $150K each if this group of people bought in JB. That's $1.5 billion inlost profits to the HDB. When it comes to the PAP, you got to hurt them in the pocket, that's where it counts.

 

[aurvandil]

My idea is their worse nightmare. They are advocating the portions for older people eg old folks home, medisave use in malaysia, etc. My idea is that for the 15,000-20,000 people every year looking to buy their first home, they should all look at JB, and buy there. Imagine the HDB losing the profit of 10,000 new flats, profits of at least $150K each if this group of people bought in JB. That's $1.5 billion inlost profits to the HDB. When it comes to the PAP, you got to hurt them in the pocket, that's where it counts.

I don't think that would be too much of a problem. You see their demand curve is near infinite. If that happens, what they will likely do is open the floodgate even bigger and allow in even more FT. Right now, infrasturcture constraints like housing and transport and the only things holding them back.

If we solve the housing problem by getting people to stay in Johor, then we remove a major constraint of the FT policy.

Come to think of it, I remember reading they are already thinking along these lines. After the huge outcry over HDB rental housing being used to house IR foreign workers, there was some talk about housing them in Batam. It might morph to eventually housing them in Johor and having a bus to ferry them to the IR.

 

[Papsmearer]

I don't think that would be too much of a problem. You see their demand curve is near infinite. If that happens, what they will likely do is open the floodgate even bigger and allow in even more FT. Right now, infrasturcture constraints like housing and transport and the only things holding them back.

If we solve the housing problem by getting people to stay in Johor, then we remove a major constraint of the FT policy.

Come to think of it, I remember reading they are already thinking along these lines. After the huge outcry over HDB rental housing being used to house IR foreign workers, there was some talk about housing them in Batam. It might morph to eventually housing them in Johor and having a bus to ferry them to the IR.

Ok, I have a problem with this FTs-are-costing-the-price-increase theory. Look at it logically. Are there a lot of FTs here? Yes, there are. But the vast majority are not eligible or able to buy flats. when u are displacing a local sinkie for a $800-$1000 month job, how can u afford to buy a flat? Not to mention PR and citizenship requirements. Than u say, but they are renting and creating a demand for rental housing. This may be true. But a lot of them live in dorms or in HDB supposedly soon to be demolished flats. Also, those that rent from current flat owners squeeze 8-10 people or more into a flat. So, they are actually very efficient in their usage of rental flats. Coupled with the fact that many sinkies are kiasu to get into trouble with the HDB by doing illegal subletting.

For those FTs that earn a lot of money, and they were inclined to buy property in S'pore, they will buy private instead. For those that earn middle class wages and want to buy a flat, they have to run a gamut of qualifications, both for resale and new.
- They have to be PRs or Citizens. Only 40K PRs are granted each year, and 20,000 citizens. These people have to form a famlily unit. How many FTs who are PRs or citizens have their children here too? How many of these PRs come here as a family unit?
- We agree that FTs come here and displace sinkies by taking the same job at a much lower pay. How and why do they do that? they do this because, they can repatriate a portion of their pay back to their homeland where the SGD has a much bigger purchasing power. And they can only do this if they live on the cheap in S'pore. Purchasing a flat will defeat this purpose.

So, i really would like to see some concrete evidence rather than histeria at this point about the effect of FTs on the HDB market.

 

[elephanto]

I have advocated and will continue to advocate for unconventional means of living in S'pore. I have friends who buy in JB and commute a few days a week. With the technology today, u can work from your home office and most clients would'nt even know u are not in S'pore. At least 300,000 malaysians living in JB do the commute every day to singapore. U got to play the game the way they play it. If you play the game the HDB/PAP want you to play, you will lose. The initial acquisition cost of real estate in JB is half that of S'pore and its freehold. The other costs of living eg. food, maid, etc. are 20-30% lower every month. Earn S'pore dollars but spend in Ringgitt. That's what all the FTs do. They earn SGD and than spend it in Rupee, Renmibi, etc. The purchasing power is so much more.

This suggestion i like best in terms of practicality & controlleability.

Sorry this is a micro view, alas, me no smart enough to translate this into a viable macro policy.... at the end of the day, every buddy kee-kee-koo-kee-kee !

 

[Papsmearer]

I don't think that would be too much of a problem. You see their demand curve is near infinite. If that happens, what they will likely do is open the floodgate even bigger and allow in even more FT. Right now, infrasturcture constraints like housing and transport and the only things holding them back.

QUOTE]

the demand curve is not infinite. FTs know a scam when they see one, especially those from the PRC. They are not so stupid and gullible to buy flats. Sinkies on the other hand don't really have any other options.

 

[aurvandil]

Ok, I have a problem with this FTs-are-costing-the-price-increase theory.

Almost 90% of the available housing in Singapore are HDB. Our FT population is about 33% of the total population. It seems highly unlikely that 33% of the population has somehow squeezed into just 10% of the housing units in Sg that comprise of landed properties, condos and dorms.

Mr Mah got caught "off-gaurd" again the by illegal sub letting problem in the HDB heartlands. The subletting approvals which he voiced off in Parliament look ridiculously small compared to the HDB rental adverts which appear in the newspapers.

Is he actually going to do something about it, haul Singaporeans off to court and evict the FT?

Probably not since we do have to provide a place to stay for the FT that have been granted passes. If he takes stern action, where will the FT stay? At the beach in Sembawang?

 

[aurvandil]

the demand curve is not infinite. FTs know a scam when they see one, especially those from the PRC. They are not so stupid and gullible to buy flats. Sinkies on the other hand don't really have any other options.

Why is it a scam since Mr Mah has but his head on the line that HDB flats will only go up?

And he can make the price of HDB flats levitate by restricting the supply of flats relative to the Total Population of Singapore.