HDB 101 : What the PAP don't want you to know.

[Papsmearer]

Good write up. I personally use my CPF to fund my home because i've actually written it off. My prediction is that its actually going to get harder and harder to 'withdraw' the money come retirement so i think of my 20% contribution as some kind of tax that i will never see again.

I think its more than 20% right? Your employer has to contribute too. 14.5% if I am not mistaken, so total is 34.5%. To write off 34.5% of your wages is a very hard pill to swallow. Yes, the govt. is making it harder and harder to withdraw. In fact, they are moving to almost nil withdrawal allowed thru their annuity scheme. They are getting desperate as the golden cow is now on its last legs, and the system has been tapped out of all money.

 

[Papsmearer]

To me its to vote them out of power.

The opposition this round should take on all the Ministers and even if they do not win the election but managed to kick out some Ministers-the message will be loud and clear.
They should focus on taking on the MM/SM's/DPM's and people like MBT/WKS/LSS -those who have made Singaporeans life miserable.

By the way, this is a good thread with many good suggestions by the threadstarter.

Yes, you are right, ultimately, that is the only and cleanest solution, to vote them out. But the problem is why am I bringing these issues up, why am I educating people here? Is it not the job of the oppo to do it? The oppo themselves are not even aware of the extent. They are the ones that should be slamming these points home every where they go, on their websites, thru twitter, sms, emails, etc. The oppos has to raise some significant issues. I don't understand why they are not doing it.

 

[Papsmearer]

1. If things are as simple, then we will have world peace. Human to human interfaces make it hard to have many people under 1 household. People need personal space for their own interests.

2. Rent from HDB? You mean renting a flat from the open market or those subsidised rental flats from HDB?

3. Talk is cheap, walk the talk. How about those households with school going kids?

Ok, I have admitted the playing field is stacked in HDB/PAP's favour. If you are so fucking smart, what is your solution. I have presented 3, where are yours? If you don't have any fuck off. Dumbshits like you only know how to criticise. Lets see your solution.

 

[Papsmearer]

05-02-2010, 11:44 AM
Highfalutin
Alfrescian Join Date: Aug 2009
Posts: 369
My Reputation:Points: 65 / Power: 9


Re: HDB prices and future generation

--------------------------------------------------------------------------------

Very soon, multi generation family living under one roof will not be a sign of filial piety but neccessity out of pressured circumstances.

I want to say yes, but it will probably not happen. In order not to play the HDB game, you are right, multi generation should live under one roof. But the problem is there are too many ignorant and suckers willing to pay thru the roof to rent a flat for 99 years. As long as these people are around, the HDB has no incentive to reduce the price.

 

[Papsmearer]

Renting is not a good idea in the long run! You can't use yr CPF to pay for yr rentals. Since you can't take out the CPF before retirement age, you might as well use yr CPF to buy the HDB flat. That is not wrong, as it benefits you and not HDB.
If you rent from HDB, at the end of it all, you definitely do not have possession of anything and you will regret! If you pay off with CPF, you can at least have something (even if you dont own it in yr true sense of the word) to resell at a profit after x yrs. Especially, you shld try to use yr CPF as much as poss when you are still young. When you are old, it's better to rent (since you don't have much time left on this planet anyway).

If you want to rent short term to wait for the prop mkt to burst before you go in to buy, then ok, it's makes sense.

Again, we have to differ here, and I don't think you are too sure on the concepts here. If you rent, even in the long run, you would have preserved you CPF. The whole idea of CPF is for retirement. Its not to take out before retirement. There is no guarantee that you will make a profit from the flat if you sell it. If you bought your flat for $350K at age 25 years, and you decide to sell it when you are 70 years to fund your retirement as you suggested, what would you get for it? The flat would be 45 years old, even older if it was a resale flat. Would the bank even give a mortgage to a potential buyer for a flat that old? You will be lucky to get $150K for it.

Under the above scenario, If you say I will sell it after 20 years for $500K, that's great, you make $150K profit. Than what are you going to do for the remaining 35 years of your life? Rent? Buy another even more expensive flat? And you are assuming you can make a profit. Many people have lost money on their HDB flats too.

 

[iamtalkinglah]

Again, we have to differ here, and I don't think you are too sure on the concepts here. If you rent, even in the long run, you would have preserved you CPF. The whole idea of CPF is for retirement. Its not to take out before retirement. There is no guarantee that you will make a profit from the flat if you sell it. If you bought your flat for $350K at age 25 years, and you decide to sell it when you are 70 years to fund your retirement as you suggested, what would you get for it? The flat would be 45 years old, even older if it was a resale flat. Would the bank even give a mortgage to a potential buyer for a flat that old? You will be lucky to get $150K for it.

Under the above scenario, If you say I will sell it after 20 years for $500K, that's great, you make $150K profit. Than what are you going to do for the remaining 35 years of your life? Rent? Buy another even more expensive flat? And you are assuming you can make a profit. Many people have lost money on their HDB flats too.

Sigh.... that's why lo..we are losers no matter what step?
Then if you don't know how to invest in your CPF, your CPF would be eroded by inflation.

What was not mentioned is that the capital value of HDB flats can only be unlocked if the owners emigrate or downgrade to a cheaper flat.

 

[kingrant]

Rental expenses erode yr disposable income, esp when you're starting out. Save on the rent - that's cash for you.

You can't use all yr CPF anyway to buy the flat, only those in the OA. You can't touch the SA and the min sum. At retirement, you have a flat. You could take a reverse mortgage on it and retire on the annuity, and medical coverage on the SA. At 70, don't think abt selling yr flat for profit - yes, it's too old. So you have to be smarter than that - sell it off after a few years only when you can take profits. Prop prices inevitably have been rising over a longer horizon, due to less land parcels to sell.

I have two private props - 1 freehold bungalow, and 1 pte condo. I rent out both for retirement income and rented a HDB. Now, which concept do you want me to be sure?

Again, we have to differ here, and I don't think you are too sure on the concepts here. If you rent, even in the long run, you would have preserved you CPF. The whole idea of CPF is for retirement. Its not to take out before retirement. There is no guarantee that you will make a profit from the flat if you sell it. If you bought your flat for $350K at age 25 years, and you decide to sell it when you are 70 years to fund your retirement as you suggested, what would you get for it? The flat would be 45 years old, even older if it was a resale flat. Would the bank even give a mortgage to a potential buyer for a flat that old? You will be lucky to get $150K for it.

Under the above scenario, If you say I will sell it after 20 years for $500K, that's great, you make $150K profit. Than what are you going to do for the remaining 35 years of your life? Rent? Buy another even more expensive flat? And you are assuming you can make a profit. Many people have lost money on their HDB flats too.

 

[Highfalutin]

Why are we drifting away from our concerns about our children's ability to buy "public subsidised housing that they won't be able to afford without lowering their quality of life"? Most of us here are not paying the astronomical prices that had skyrocketed over the last few years, right?

 

[0939]

In reality, we came to this world with nothing and we will go off with nothing. In our life time, whatever we owned, we will have to give it up. We can't bring it to our grave. In this world there are so many things in life we can reach it. Its all around us. Like owning a home, a car and good food etc. We must remember good thing life, will one day comes to an end.

 

[kingrant]

Not sure if that is what the threadstarter intended? Be that as it may, I agree HDB housing started as a public housing for lower-income families, so is supposed to be public housing that is affordable to its residents. I also think that the HDB shouldn't have moved away from using a cost-plus pricing concept to a market value pricing just because they are buying land from SLA at developed (higher) land prices nowadays. (Previously govt can seize land from landowners and compensate with peanuts.) So I think that the policy has backfired because while income levels have gone up only by single digits, housing prices have gone up by double digits over the last 40-50 years. E.g. a fresh grad in 1974 starting pay was abt $1200 pm. HDB flats were $35-50K. Now, a fresh grad starting pay is $2500 pm before crisis, and HDB flats are now $350K! So pay has doubled; but HDB prices have gone tenfold! Must be over the years, things have gone on autopilot and nobody notices anything that needs adjusting. Or worse, afraid to challenge one of those Old Man's sacred cows.

Why are we drifting away from our concerns about our children's ability to buy "public subsidised housing that they won't be able to afford without lowering their quality of life"? Most of us here are not paying the astronomical prices that had skyrocketed over the last few years, right?

 

[kingrant]

Best is still to grit yr teeth and aim for private property iso HDB. More freedom, more liberal. Private prop mkt offers more possibilities, en bloc esp. Enblo, despite the bad publicity it has invited, is not just money to be made. Enbloc allows a plot of land to be recycled and reused when the props on it age. This is where owning a HDB flat is at a disadvantage, as others have pointed out. And the HDB is a powerful landlord, too powerful in fact, that one shld avoid. It can take away what it giveth, and it tends to play dirty, claiming the greater good...always the greater good.

 

[Highfalutin]

E.g. a fresh grad in 1974 starting pay was abt $1200 pm. HDB flats were $35-50K. .

Bedok South Ave 2, 1977, 4 room S - $18,000. 4 room A - $20,000. 5 room point block $30,000. I lived there.

 

[iamtalkinglah]

Bedok South Ave 2, 1977, 4 room S - $18,000. 4 room A - $20,000. 5 room point block $30,000. I lived there.

Wau biang! Even cheaper! (But I wasn't born yet so I don't know :()

 

[Highfalutin]

Wau biang! Even cheaper! (But I wasn't born yet so I don't know :()

PAP now play by different rules yet want you to swear the same kind of gratitude and loyalty.

 

[Papsmearer]

I am paying off a 30 year $90,000 HDB loan on a monthly repayment of $350. I consider that as rent. A rental scheme whereby I have to pay an upfront of $80,000! I consider myself lucky because if I were to do it all over again now, it will be $180,000 for the same rental $350! How's that for perspective? I got the loan four years ago. The rental payment will be taken over by my children when I'm gone.

Well, I have to say that your situation is not really the norm for sinkies. No one has a $90K loan anymore, unless they paid in the low $100sK for their flat. No flat is that cheap anymore. Either that, or u had some money to pay down most of the price of the flat. Anyway, I would think the normal HDB loan is now more like $350K?

 

[Papsmearer]

Sigh.... that's why lo..we are losers no matter what step?
Then if you don't know how to invest in your CPF, your CPF would be eroded by inflation.

Yes, that is why I say the playing field is heavily favoured against the people, The PAP have had 40 years to refine their ability to milk every last cent out of us. And yes, I forgot, one of the solutions is to give up sinkie citizenship and take all the CPF money out. That does not mean that you leave singapore. You can still return to work here as an FT, and we know what advantages are offered FTs.

 

[tookara]

when is hdb's asset bubble going to burst?

 

[Cestbon]

Clap clap clap........................Just up u point. Really very detail.
This waht we hope to hear that PAP/ministers trying to lie to all peasant.

 

[Papsmearer]

Rental expenses erode yr disposable income, esp when you're starting out. Save on the rent - that's cash for you.

You can't use all yr CPF anyway to buy the flat, only those in the OA. You can't touch the SA and the min sum. At retirement, you have a flat. You could take a reverse mortgage on it and retire on the annuity, and medical coverage on the SA. At 70, don't think abt selling yr flat for profit - yes, it's too old. So you have to be smarter than that - sell it off after a few years only when you can take profits. Prop prices inevitably have been rising over a longer horizon, due to less land parcels to sell.

I have two private props - 1 freehold bungalow, and 1 pte condo. I rent out both for retirement income and rented a HDB. Now, which concept do you want me to be sure?

Under your scenario mentioned above you are one of the lucky few that are not playing the HDB game. U do not own a HDB flat, and in fact you are following one of the solutions by renting it. This whole thread is not applicable to you.

U have still not address the problem of selling of the HDB flat early to make a profit. If you manage to do that, where would you stay? U probably still have 30 + years of your life to live. Do you rent? If the real estate market has increased to the point that you are selling you flat at a profit, I can guarantee you the rental market would be even higher. Your excess profits will be eroded away by higher rents over the last 30 years of your life. If you don't rent and buy another flat, well, would it not be more expensive too due to the same rise in real estate prices that enabled you to sell your original flat at a higher price?

Finally, yes, its true that you can use only the money in the Ordinary account towards flat purposes. But add it all up over the 20 years of the HDB loan. First, you have to take the money out for the down payment, and than money out for the money payments, and any other upgrade costs. Total this all up over 20 years, and add in the Present Value of money and it will easily cost you several hundred thousands dollars out of your CPF account. If you don't buy a flat, all these money will be available to you at your retirement.

 

[Papsmearer]

Best is still to grit yr teeth and aim for private property iso HDB. More freedom, more liberal. Private prop mkt offers more possibilities, en bloc esp. Enblo, despite the bad publicity it has invited, is not just money to be made. Enbloc allows a plot of land to be recycled and reused when the props on it age. This is where owning a HDB flat is at a disadvantage, as others have pointed out. And the HDB is a powerful landlord, too powerful in fact, that one shld avoid. It can take away what it giveth, and it tends to play dirty, claiming the greater good...always the greater good.

Yes, ultimately, the aim is to get private property to avoid the HDB/PAP trap. However, I caution you on private property. In my opinion, not all private properties are born the same. A 99 year lease private property is just as bad as a HDB flat. U face essentially the same problem, accept the landlord is a private developer. Freehold is the best option. But of course the cost is very high, and in the high end of the market, the fluctuations in price is even worse.