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

[eatshitndie]

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.

elementary, dear dr. watson, elementary. this was precisely the same deduction that crossed my mind when i was visiting sg last november. i toured jb and was thinking to myself: if sinkies were smart and sharp, they would have sold their hdb holes for profit and lived in jb for less, and at the same time milked the wonderful infrastructure and opportunities in sg which is only a couple of stone throws away. if million dollar ministers can milk the system, so can you.

 

[longbow]

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.

This is not correct. Banks do not take $300K asset in exchange for $24K loan. You are not understanding how it works.

Of course in reverse mortgage bank takes a chunk. It does not mean giving up all equity in house. Basically it is like a credit line or a mortgage except that the draw is a constant $400 a month. At the end of 20 years, you will still have 30 to 40% equity in that property. If the property mkt value is more (likely given 20 years) you will end up with 50% equity.

At the end of reverse mortgage you or your estate sells the house, pays off the bank and pockets the remaining amount or pays off balance from bank and keeps the house or if your son is young, refi a loan to payoff the balance and keep the house. There is still equity in the house.

In my opinion, reverse mortgage is good for that last leg of your live. Maybe at 75 years of age.

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.

 

[longbow]

Will not work for the young. If rjob allows you to do that then take advantage of it. But most Singaporeans work a 9 to 6 job. After factoring in taking kids to childcare and getting to work they do not have time to add another 1.5 hours to travel. Can you find good childcare in JB? If you kid is sick you have to take day off. In Singapore you can take longer lunch break and go back to check on child and leave an hour early to be with child.

Finally how about primary school. OK if you are single, freelance graphic artist - remember you cannot joint some friends for a quick coffee, share ideas. Everything is 1.5 hours back and forth.

It can work for retired people. They have plenty of time.

Also it is not whether the land is freehold that is important. What is even more important is whether your investment can appreciate. In HK there is no freehold land but investors in property has made many billionaires.

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.

 

[Goh Meng Seng]

If the deal is so good, why not many banks are taking it up?

The lease is 99 years. If you buy at 30 yr old and want to do reverse mortgage at 70, your lease will have only 60 years left. If suay suay you live for another 30 years, your bank will cry. A flat that is left with less than half of the lease, will have little value!

The problem will be more acute when you have an aging population with more elderly people than younger couples.

Goh Meng Seng

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.

This is not correct. Banks do not take $300K asset in exchange for $24K loan. You are not understanding how it works.

Of course in reverse mortgage bank takes a chunk. It does not mean giving up all equity in house. Basically it is like a credit line or a mortgage except that the draw is a constant $400 a month. At the end of 20 years, you will still have 30 to 40% equity in that property. If the property mkt value is more (likely given 20 years) you will end up with 50% equity.

At the end of reverse mortgage you or your estate sells the house, pays off the bank and pockets the remaining amount or pays off balance from bank and keeps the house or if your son is young, refi a loan to payoff the balance and keep the house. There is still equity in the house.

In my opinion, reverse mortgage is good for that last leg of your live. Maybe at 75 years of age.

 

[aurvandil]

Goh Meng Seng has good ideas but he can be very long winded. The following is a summary of what he is trying to say:

1) Under the current system, first time HDB home owners have to pay a very high price because HDB flats are priced based on the price of resale HDB flats.
2) HDB flats should be priced based on the cost it takes to build them rather than the price of resale HDB flats.

This simple message has been twisted into

1) Goh Meng Seng wants to collapse the price of HDB flats

Logically, this cannot happen. This is because to buy a flat from the HDB, you have to fulfill

1) Citizenship/Ownership requirements
2) Family nucleus requirements
3) Occupancy requirements which prevent first time buyers from immediately selling their flats in the resale market

Goh Meng Seng also talks about the idea of using your HDB flat to finance your retirement. This is a BAD IDEA because

1) The price of resale HDB flats can fall.
2) Other than selling the HDB flat, there are no other means on monetizing it. Previous attempts to monetize HDB flats via reverse mortgages failed.

Hence unless you have second property or are planning to emigrate from Singapore, it would be foolish to rely on your HDB flat as a means of providing for your retirement. Unfortunately many Singaporeans are FORCED to do so because they have spent ALL of their earnings on their HDB flat.

A vote for Mr Mah would therefore mean a CONTINUATION of the current policy of INFLATED prices for flats bought DIRECTLY from the HDB.

A vote for Goh Meng Seng would mean HDB policy REFORM so that you pay based on the COST of building the HDB flat.

 

[aurvandil]

On what can be done to help the present victims of Mr Mah's HDB policy, I am afraid that the answer is probably "very little".

The task of correcting the present system to make a better future is daunting enough.

It is a STUPID arguement that we should continue with the current broken system as it is only "fair" that future generations must suffer in the same way as previous generations.


If Singaporeans want to hold someone accountable, then they should "target" Mr Mah and vote him out of office.

 

[Papsmearer]

elementary, dear dr. watson, elementary. this was precisely the same deduction that crossed my mind when i was visiting sg last november. i toured jb and was thinking to myself: if sinkies were smart and sharp, they would have sold their hdb holes for profit and lived in jb for less, and at the same time milked the wonderful infrastructure and opportunities in sg which is only a couple of stone throws away. if million dollar ministers can milk the system, so can you.

That is exactly what I have been saying, but sinkies as a whole are gluttons for punishment. i started another thread called HDB 101. Firstly, u have to recognize the con/scam before u arrive at the solution. Sinkies dun even realise its a scam, how do they arrive at the live-in-JB solution? Such a highly educated population and yet so stupid. Sigh.

 

[Papsmearer]

On what can be done to help the present victims of Mr Mah's HDB policy, I am afraid that the answer is probably "very little".

The task of correcting the present system to make a better future is daunting enough.

It is a STUPID arguement that we should continue with the current broken system as it is only "fair" that future generations must suffer in the same way as previous generations.


If Singaporeans want to hold someone accountable, then they should "target" Mr Mah and vote him out of office.

Do not be mistaken. Mah is just the padawan learner. the real Sith lord behind this is Lee Con You.

 

[Papsmearer]

Will not work for the young. If rjob allows you to do that then take advantage of it. But most Singaporeans work a 9 to 6 job. After factoring in taking kids to childcare and getting to work they do not have time to add another 1.5 hours to travel. Can you find good childcare in JB? If you kid is sick you have to take day off. In Singapore you can take longer lunch break and go back to check on child and leave an hour early to be with child.

Finally how about primary school. OK if you are single, freelance graphic artist - remember you cannot joint some friends for a quick coffee, share ideas. Everything is 1.5 hours back and forth.

It can work for retired people. They have plenty of time.

Also it is not whether the land is freehold that is important. What is even more important is whether your investment can appreciate. In HK there is no freehold land but investors in property has made many billionaires.

U are not really being creative in your solutions. If I was in the scenario u put about the sick child, I would have bought a nice semi D or bungalow in JB. Move my retired parents or in laws in to live with me. Get them a R$300 a month maid. Buy them a nice used car for R$20,000. Child sick, they can send to dr. or maid can pick up from the childcare centre. Maid can take care of the child if they are sick or parents or parent in laws living with you can take them to dr. If your job allows, u can stay home in your home office and still be in touch with your office via phone, email, etc.

many gated community have chinese schools near by. Why is land appreciation a factor? U are comparing apples and oranges. have you not read anything on this thread? If you hold on to your HDB flat long enough, it will be worth nothing. The freehold property in JB can house 3 generations of your family without having to give it up. Right off the bat, u have a guaranteed financial benefit. Anyway, see the Living in JB thread or the HDB 101 thread.

Typical loser sinkies like you will say this and that cannot work when they are presented with a solution. A winner will think of ways to make it work by hook or by crook.

 

[Goh Meng Seng]

A related article by Lucky Tan:

Debt and Delusion

And here is my comment on his article:

Hi Lucky,

I applaud you for your effort in trying to educate your readers about the delusion of debt HIDDEN under the magic word "wealth".

However, it is truly sad that many people don't really realize what it means to be "DEBT FREE".

The PAP government has created a dangerous delusion of "ASSET ENHANCEMENT" which in fact, is "LIABILITY ENHANCEMENT" if you are going to finance such things through getting bigger loans. There are many reasons for the PAP government to do this.

The recent assertion by Minister Mah about HDB flat as a source of "retirement financing" is totally flawed or even dangerous. Many people assumed that property prices will also go up which is categorically false. This would be especially so when the population start to age, with more elderly people trying to sell out while too few young couples to buy up.

Furthermore, it has made the assumption that everybody will be able to stay employed for 30 years! What we are seeing right now is that there are 33,000 households unable to keep up their mortgage payment. Many have lost their flats, along with all their CPF savings when HDB or the banks evicted them out and repossess the flats. Such risks has not been fully explained to Singaporeans at all.

For those who chose to stay with their parents instead of buying a flat, they may have a better chance of retiring comfortably.

We could only do that much in trying to show people what they are getting to by this PAP government's dangerous scheme.


Goh Meng Seng