HDB High Prices & Influx of FT

[Goh Meng Seng]

One of my favorite blogger Lucky Tan has written on the reasons of the rise in HDB resale as well as new flats' prices. The moderator of 3-in-1 Kopitiam Kojakbt has put up one of his reasoning and his chart on how influx of Foreign Talents is correlated to the pricing of HDB resale flats. (See above)

Although the Pearson Correlation Coefficient is pretty high for the two sets of data, technically speaking there must be a reasonable explanation behind such correlation, else such correlation would be considered irrelevant statistically.

The more appropriate data to be used is the number of increase of PR and non-native Citizens vs the HDB resale pricing. This is because only PR and new non-native Citizens are allowed to buy HDB resale flats. The Total of Foreigners in Singapore could only at best be an approximate to the increase in PR or new non-native Citizens, assuming that the number of new PR and Citizens are directly correlated with the Total number of Foreigners. In Singapore, we have not much choice of data set because the government does not release specific numbers on the increase of PR and New Citizens.

The spiral of HDB resale prices is basically due to two forces, demand and supply. Singaporeans generally could only own one HDB flat per household. It would mean that the supply of HDB flats to Singaporeans are more or less in equilibrium. However, with the injection of new demand caused by the increase in PR and New non-native Citizens, it would cause an inequilibrium in the demand and supply. The supply of HDB resale flats are limited as most Singaporeans bought the flats for own use while the demand of such flats keep going up with the influx of foreigners as PRs and New Citizens.

This will inevitably cause the prices of new flats to surge because the present new HDB flats' price are pegged at the resale flats' price. In effective, HDB is just giving a "discount", not a real subsidy for native Singaporeans. The implicit result would be the influx of Foreigners would have tremendous impact on Singaporeans, especially the young couples, in terms of higher HDB prices.

My suggestion is as follows:

1) HDB should stop hoodwinking Singaporeans by pegging the new HDB flats' prices to the resale HDB market prices and disguise such Discounts as "subsidies". The pricing should be de-linked and new HDB prices should be sold to Singaporeans at cost price and on top of that, REAL subsidies at cost price should be given as follows:

a) Born native Singaporeans or those who have lived here for more than 15years, $20K of subsidies from cost price.
b) Those Singaporeans who have completed their NS, another $10K subsidy
c) Those who get married before 30 years old another $20K subsidy.

2) In view of present FT policy, PAP must solve the problem of inadequate infrastructure, especially housing. HDB should sell NEW HDB flats to PRs direct at MARKET PRICES, instead of cost prices. This will ease the unbalanced market situation due to high influx of FT getting PRs. By earning from these PRs, HDB will be able to cross subsidize native Singaporeans.

This will of course encourage more PRs to convert to Singapore citizenship and at the same time, give REAL VALUE to Singapore Citizens who have contributed to this Nation. On top of that, it encourages family units to be formed without discriminating those singles badly. Singles who are native Singaporeans and served their National service would get their subsidies in recognition of their contribution to the Nation as well.

There is no reason for HDB not to sell New HDB Flats to PRs at MARKET PRICE instead of allowing the resale market to grow into a bubble and in turn, affect all native Singaporeans' housing liabilities. High HDB prices will prevent young couples from forming up family units early. This is a contradiction to our National needs.

It is time for PAP government and HDB to give due recognition to Singaporeans' contribution to the Nation and put tangible value to our allegiance as a citizen. It is unacceptable for us, especially the young Singaporeans, to pay the price of PAP's indiscriminate FT policy in terms of paying higher price for HDB flats.

Our PAP government has been talking big about how they value Singaporeans and putting their interests FIRST above all others. But the truth is, the PAP government is the MAIN CULPRIT in hurting Singaporeans' interest by implementing such housing policy that inflate the prices of new HDB prices for our young Singaporeans. If this policy is not curbed, our future generations would definitely be burdened by higher housing cost all across the board.

Goh Meng Seng

 

[singveld]

i have a better idea, let's kick out the foreigner.
or build a camp, to house them, 12 to 40 share a room, like what we have in the army.

 

[shelltox]

For those retires who are in their 70's, it is time to sell their flats to the new PR and profit from it. rent a 1 room flat or get lost along orchard road and get sent to hospital,. act blur and act like you have dementia. the govt will feed you for life.

 

[Lee Hsien Tau]

That's where you're acting like an idiot!

You sell your flat, whether forced sale or willing, grabramen won't let you rent. Market rent, might as well not sell.

Act blur got dementia, grabramen take your medisave, suck dry, send your to Pelangi village lock-up until die.

Shelltox, find a 10-storey building, act faint and jump. Else shut the hell up.

For those retires who are in their 70's, it is time to sell their flats to the new PR and profit from it. rent a 1 room flat or get lost along orchard road and get sent to hospital,. act blur and act like you have dementia. the govt will feed you for life.

 

[chinkangkor]

Unless supply of HDB flats is increased, whether PRs are allowed to buy direct from HDB will not solve the housing shortage.

The solution is to increase the supply of HDB flats or dampen the demand significantly, otherwise the prices of HDB resale and new flats will keep on moving up.

 

[Goh Meng Seng]

Unless supply of HDB flats is increased, whether PRs are allowed to buy direct from HDB will not solve the housing shortage.

The solution is to increase the supply of HDB flats or dampen the demand significantly, otherwise the prices of HDB resale and new flats will keep on moving up.

The supply of HDB cannot be increased without selling to PR. That's the point.

HDB only sell to each Singaporean family unit one each, how could the supply increase without selling to PR?

Goh Meng Seng

 

[chinkangkor]

The supply of HDB cannot be increased without selling to PR. That's the point.

HDB only sell to each Singaporean family unit one each, how could the supply increase without selling to PR?

Goh Meng Seng

My understanding is HDB builds 8,000 units yearly currently. This number needs to be reviewed as it is grossly inadequate to serve the average number of 40,000 babies born.

 

[Goh Meng Seng]

My understanding is HDB builds 8,000 units yearly currently. This number needs to be reviewed as it is grossly inadequate to serve the average number of 40,000 babies born.

HDB is a monopoly. Even if it builds more, it doesn't mean the price for new flats will come down. This is especially so when the policy is set in such a way that new HDB flats' price is pegged with the resale market price. As long as the policy is not changed and the mismatch demand and supply in resale market is not address, the price of new HDB flats will stay high, regardless whether HDB build more flats or not.

Goh Meng Seng

 

[Meltdown]

One of my favorite blogger Lucky Tan has written on the reasons of the rise in HDB resale as well as new flats' prices. The moderator of 3-in-1 Kopitiam Kojakbt has put up one of his reasoning and his chart on how influx of Foreign Talents is correlated to the pricing of HDB resale flats. (See above)

Although the Pearson Correlation Coefficient is pretty high for the two sets of data, technically speaking there must be a reasonable explanation behind such correlation, else such correlation would be considered irrelevant statistically.

The more appropriate data to be used is the number of increase of PR and non-native Citizens vs the HDB resale pricing. This is because only PR and new non-native Citizens are allowed to buy HDB resale flats. The Total of Foreigners in Singapore could only at best be an approximate to the increase in PR or new non-native Citizens, assuming that the number of new PR and Citizens are directly correlated with the Total number of Foreigners. In Singapore, we have not much choice of data set because the government does not release specific numbers on the increase of PR and New Citizens.

The spiral of HDB resale prices is basically due to two forces, demand and supply. Singaporeans generally could only own one HDB flat per household. It would mean that the supply of HDB flats to Singaporeans are more or less in equilibrium. However, with the injection of new demand caused by the increase in PR and New non-native Citizens, it would cause an inequilibrium in the demand and supply. The supply of HDB resale flats are limited as most Singaporeans bought the flats for own use while the demand of such flats keep going up with the influx of foreigners as PRs and New Citizens.

This will inevitably cause the prices of new flats to surge because the present new HDB flats' price are pegged at the resale flats' price. In effective, HDB is just giving a "discount", not a real subsidy for native Singaporeans. The implicit result would be the influx of Foreigners would have tremendous impact on Singaporeans, especially the young couples, in terms of higher HDB prices.

My suggestion is as follows:

1) HDB should stop hoodwinking Singaporeans by pegging the new HDB flats' prices to the resale HDB market prices and disguise such Discounts as "subsidies". The pricing should be de-linked and new HDB prices should be sold to Singaporeans at cost price and on top of that, REAL subsidies at cost price should be given as follows:

a) Born native Singaporeans or those who have lived here for more than 15years, $20K of subsidies from cost price.
b) Those Singaporeans who have completed their NS, another $10K subsidy
c) Those who get married before 30 years old another $20K subsidy.

2) In view of present FT policy, PAP must solve the problem of inadequate infrastructure, especially housing. HDB should sell NEW HDB flats to PRs direct at MARKET PRICES, instead of cost prices. This will ease the unbalanced market situation due to high influx of FT getting PRs. By earning from these PRs, HDB will be able to cross subsidize native Singaporeans.

This will of course encourage more PRs to convert to Singapore citizenship and at the same time, give REAL VALUE to Singapore Citizens who have contributed to this Nation. On top of that, it encourages family units to be formed without discriminating those singles badly. Singles who are native Singaporeans and served their National service would get their subsidies in recognition of their contribution to the Nation as well.

There is no reason for HDB not to sell New HDB Flats to PRs at MARKET PRICE instead of allowing the resale market to grow into a bubble and in turn, affect all native Singaporeans' housing liabilities. High HDB prices will prevent young couples from forming up family units early. This is a contradiction to our National needs.

It is time for PAP government and HDB to give due recognition to Singaporeans' contribution to the Nation and put tangible value to our allegiance as a citizen. It is unacceptable for us, especially the young Singaporeans, to pay the price of PAP's indiscriminate FT policy in terms of paying higher price for HDB flats.

Our PAP government has been talking big about how they value Singaporeans and putting their interests FIRST above all others. But the truth is, the PAP government is the MAIN CULPRIT in hurting Singaporeans' interest by implementing such housing policy that inflate the prices of new HDB prices for our young Singaporeans. If this policy is not curbed, our future generations would definitely be burdened by higher housing cost all across the board.

Goh Meng Seng

During bad economic times, people who used to be able to afford to live in private properties are downgrading to HDB flats. That's why there's a huge rise in HDB prices & a drop in private property prices. It's bec more private property dwellers are getting poorer & are downgrading to the lowest common denominator housing which is HDB flats.

In America, more people are now eating at fast food restaurants like McDonald's during bad economic times. That explains why plenty of more expensive restaurant chains had already closed thousands of outlets across the country. While sales at McDonald's, the lowest common denominator amongst restaurants, is rising!

The same can be said about retailers in America. Sales at middle income retailers (like Sears, Nordstrom, & Macy's) and high end retailers (like Saks Fifth Avenue, Neiman-Marcus, & Tiffany's) are dropping like a rock. But the sales at Wal-Mart, the lowest common denominator amongst retailers selling at rock bottom prices, is rising!

When people are facing financial hardships, they naturally downgrade to the lowest common denominator!
Welcome to the 2nd Great Depression!

 

[chinkangkor]

HDB is a monopoly. Even if it builds more, it doesn't mean the price for new flats will come down. This is especially so when the policy is set in such a way that new HDB flats' price is pegged with the resale market price. As long as the policy is not changed and the mismatch demand and supply in resale market is not address, the price of new HDB flats will stay high, regardless whether HDB build more flats or not.

Goh Meng Seng

By increasing supply through building more new flats will take demand off the resale flats. This will help to cool down the resale market when many who need flats can move away from the resale market and buy direct from the HDB instead.

With increasing demand, the best solution is to increase supply and prices will certainly come down.

 

[Goh Meng Seng]

By increasing supply through building more new flats will take demand off the resale flats. This will help to cool down the resale market when many who need flats can move away from the resale market and buy direct from the HDB instead.

With increasing demand, the best solution is to increase supply and prices will certainly come down.

The demand is segregated into two different segments: Resale & New HDB flats

Resale market demand includes PRs, singles and Singaporeans with household income over $8000 and those who earn less. Singles, Singaporeans that earn more than $8000 and PRs cannot cross over to buy new HDB flats at this moment, thus the substitution effect of an increase in New HDB flats will not be effected. The problem now is that we do not know what is the proportion of the resale market demand falls under Singaporeans with household income lower than $8000. I suspect this is not substantial.

But increasing the supply of the new HDB flats will always be an important instrument. However, if the present HDB rules are not changed, the effectiveness of such move will be limited.

Goh Meng Seng

 

[ChaoPappyPoodle]

Increasing more flats alone will not help. It has to include lower prices for new flats. FTs will have to be reduced drastically. The FTs demand increases HDB resale prices. FTs demand for rental as well as purchases but most imortantly, they take away jobs that Singaporeans can do. A lot of HDB owners also own private properties and thse are rented out to FTs.

The problem can be solved but first the pappies have to go because it is obvious that the pappies care very little for the average Singaporean.

 

[ilovechery]

i have a better idea, let's kick out the foreigner.
or build a camp, to house them, 12 to 40 share a room, like what we have in the army.

Bro Singveld, for the PRC shina pigs in particular, rape them in Nanking Massacre style ok?

 

[chinkangkor]

The demand is segregated into two different segments: Resale & New HDB flats

Resale market demand includes PRs, singles and Singaporeans with household income over $8000 and those who earn less. Singles and PRs cannot cross over to buy new HDB flats at this moment, thus the substitution effect of an increase in New HDB flats will not be affected. The problem now is that we do not know what is the proportion of the resale market demand falls under Singaporeans with household income lower than $8000. I suspect this is not substantial.

But increasing the supply of the new HDB flats will always be an important instrument. However, if the present HDB rules are not changed, the effectiveness of such move will be limited.

Goh Meng Seng

There are many s'poreans marrying foreigners. This can be seen from the statistics of children born with a foreign spouse. According to HDB rules, a s'pore citizen and a PR getting married can purchase a new flat. So if the HDB ramped up its building programme, this group, which is significant, can turn to buy new flats.

I like your suggestion of letting PRs buying direct from HDB at market rates. However, if HDB does not increase the supply of new flats, even if PRs are allowed to buy direct from HDB, I'm afraid many will still not get to own a new flat because there are simply insufficient new flats to go around.

 

[Goh Meng Seng]

There are many s'poreans marrying foreigners. This can be seen from the statistics of children born with a foreign spouse. According to HDB rules, a s'pore citizen and a PR getting married can purchase a new flat. So if the HDB ramped up its building programme, this group, which is significant, can turn to buy new flats.

I like your suggestion of letting PRs buying direct from HDB at market rates. However, if HDB does not increase the supply of new flats, even if PRs are allowed to buy direct from HDB, I'm afraid many will still not get to own a new flat because there are simply insufficient new flats to go around.

Yes, I can agree on that one. The total supply of new HDB flats must increase ultimately.

Goh Meng Seng

 

[longbow]

FT can impact HDB prices, not just "non-native" citizens and PR.

FT together with relaxation of HDB rental rules allow people to get pretty good returns on their flats. Instead of them selling their flat and upgrade to private condo, they can now keep the flat and in fact use income from their flat to help pay for the pricy new condo.

This reduces supply of resale which in turn force some to wait for new flats.

Think about it, where do you think all these FTs are staying? They cannot afford condo rental so many are in rented HDB flats.

 

[longbow]

Read a few years ago that Singaporeans are asset rich. So it is important that property prices steadily increase or else we are going to have many retirees without much savings to live on.

 

[Goh Meng Seng]

Read a few years ago that Singaporeans are asset rich. So it is important that property prices steadily increase or else we are going to have many retirees without much savings to live on.

If we carry on this pace, normal Singaporeans will have nothing left for inheritance by their children! I mean, CPF money locked and now, HDB flats in reverse mortgage....

Goh Meng Seng

 

[shOUTloud]

Read a few years ago that Singaporeans are asset rich. So it is important that property prices steadily increase or else we are going to have many retirees without much savings to live on.

the fact of the matter is that high property prices do not benefit everyone, just like high salaries means nothing if inflation is higher than high salaries.

anyway, I dun think selling HDB flats to PRs is a politically correct solution. It will create further uproar amongst the pple. Think HDB has to build more flats to meet demand and at the same time, maybe impose a moratorium on PRs buying flats unless they worked in Singapore for 3 years (for example). This should give HDB breathing space to build flats while deflating the bubble.

 

[makapaaa]

>>>a) Born native Singaporeans or those who have lived here for more than 15years, $20K of subsidies from cost price.
b) Those Singaporeans who have completed their NS, another $10K subsidy
c) Those who get married before 30 years old another $20K subsidy.<<<

U wanna bankrupt my family izzit? What's your ulterior motive? *chey*

2) In view of present FT policy, PAP must solve the problem of inadequate infrastructure, especially housing. HDB should sell NEW HDB flats to PRs direct at MARKET PRICES, instead of cost prices. This will ease the unbalanced market situation due to high influx of FT getting PRs. By earning from these PRs, HDB will be able to cross subsidize native Singaporeans.

Hey, u there! Why da ya wanna make it so "onerous" for my FT pets to replace Sporns?​