The possibility of losing your job in singapore is very real when you're past 40. Affordable = 30% for 30 years smells like bullshit to me.
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HDB Mortgage SLAVES
- Thread starter Goh Meng Seng
- Start date
so what is the remedy?
Don't get married, don't buy house
and
continue to leech at your parents or in laws place?
:p
i think camping out at Istana or Oxley Rise is much effective!
In fact, it will be considered lucky if you still have a job when you are past 35. I know of a few people who are out and still looking for jobs. They are under 40. You might argue that they are the minority but I beg to differ. I will reckon that in today world, an average person will probably experience at least one layoff in his career. The older you kana, the harder to maintain your last income level usually. Some you do the maths.
In my opinion, 30 yrs loan is way too long, paying huge interests is one thing. If you are using up most of your cpf to clear your housing loan, by the time you retire, you will have no min. sum available and you will not be able to draw on your CPF for a comfortable retirement. Which is a shame as you have worked so hard and contribute to the country development. I would believe you should deserve more.
The reason I chose 1974 is to show how prices have risen over 30 years. Painting an empirical fact. In another 30 years time, we will go well past the current figures as the same basket of goods cannot be purchased by the same dollar. The formula and the methodology is the same. To an economist, money more valuable now than later.
I once cited the case of 3 civil servants of the same grade in the old SBF.
1) Person A bought a semi-D in the newly developed private housing estate in Serangoon Gardens
2) Person B bought a HDB flat and kept the rest in FD, continously putting his savings in it.
3)Person C never believing in borrowing money, saved up and bought his first house , a 3 room flat when he retired while staying in Govt qtrs.
After 30 years, Person A now owns a $2M asset that is unencumbered.Person B a 5 room flat valued at $650K and Person C a 3 room flat valued at $300K. Guess who paid the most in interest and came out best in terms of asset - Person A. The person C who was the most frugal had the least valued asset and he never paid a single cent in interest. So what went wrong with Person C?
The trick is put your money in an investment that grows the fastest with acceptable risk. There is only one in land short Singapore - property.
I once cited the case of 3 civil servants of the same grade in the old SBF.
1) Person A bought a semi-D in the newly developed private housing estate in Serangoon Gardens
2) Person B bought a HDB flat and kept the rest in FD, continously putting his savings in it.
3)Person C never believing in borrowing money, saved up and bought his first house , a 3 room flat when he retired while staying in Govt qtrs.
After 30 years, Person A now owns a $2M asset that is unencumbered.Person B a 5 room flat valued at $650K and Person C a 3 room flat valued at $300K. Guess who paid the most in interest and came out best in terms of asset - Person A. The person C who was the most frugal had the least valued asset and he never paid a single cent in interest. So what went wrong with Person C?
The trick is put your money in an investment that grows the fastest with acceptable risk. There is only one in land short Singapore - property.
Dear Scroobal,
For a person who is earning $100K or above per year, investing in property is a good option. However, HDB is and should remain just as BASIC housing for Singaporean.
Besides, it is not possible for Singaporeans to have TWO or more HDB flats at any one time.
Goh Meng Seng
For a person who is earning $100K or above per year, investing in property is a good option. However, HDB is and should remain just as BASIC housing for Singaporean.
Besides, it is not possible for Singaporeans to have TWO or more HDB flats at any one time.
Goh Meng Seng
Dear Scroobal,
Your analysis is flawed here.
Back in 1974, REAL SUBSIDIES were given to Singaporeans and that is why the flats are so cheap. The biggest leap in HDB prices happened during GCT time, 1990s. This is due to the drastic change in housing policies.
Thus, if you want to make a good comparison, you should use 1990s prices to compare with 20 years later, 2010 prices.
Having said that, the so call "capital appreciation" is a myth. It only makes you feel good on paper. The truth is, you cannot just sell off the only HDB flat you have. You will need to find another flat to buy.. at market prices?
Downgrading is not an attractive option due to the present HDB policy. You cannot get HDB loans if you are "downgrading". Meaning, you will be paying higher interests with bank loans.
Furthermore, for those who bought their flats in 1990s that take "HDB grants", regardless of the amount of grant they gave you, they will take away 25% of your sale proceeds of your HDB flat.
Meaning, if they gave you $40K grant, and you sold your flat for $400K, they will take away $100K! This is so if you want to buy another HDB flat! And this amount can "grow" as time goes by!
Thus, the whole myth about "capital gain" is totally flawed.
Goh Meng Seng
Your analysis is flawed here.
Back in 1974, REAL SUBSIDIES were given to Singaporeans and that is why the flats are so cheap. The biggest leap in HDB prices happened during GCT time, 1990s. This is due to the drastic change in housing policies.
Thus, if you want to make a good comparison, you should use 1990s prices to compare with 20 years later, 2010 prices.
Having said that, the so call "capital appreciation" is a myth. It only makes you feel good on paper. The truth is, you cannot just sell off the only HDB flat you have. You will need to find another flat to buy.. at market prices?
Downgrading is not an attractive option due to the present HDB policy. You cannot get HDB loans if you are "downgrading". Meaning, you will be paying higher interests with bank loans.
Furthermore, for those who bought their flats in 1990s that take "HDB grants", regardless of the amount of grant they gave you, they will take away 25% of your sale proceeds of your HDB flat.
Meaning, if they gave you $40K grant, and you sold your flat for $400K, they will take away $100K! This is so if you want to buy another HDB flat! And this amount can "grow" as time goes by!
Thus, the whole myth about "capital gain" is totally flawed.
Goh Meng Seng
Absolutely agree with HDB providing basic housing. I am also not suggesting that they buy more than one HDB house. As it stands, it best to buy the biggest HDB flat that you can afford and stretch the payment as far as possible in view of exceptional price appreciation in land short Singapore. Those who were frugal ended being losers.
They must also make a mental note to upgrade as their income increase.
They must also make a mental note to upgrade as their income increase.
Its makes little or no difference if I used figures from 1850, 1900, 1950, 1990 or 2005. If I used figures from 1974 to 1989, its still better to stretch because of the high appreciate value of properties. It always grows faster and always ahead of inflation.
When you deal with properties and equities, the outlook is always long term. Short term has downswings. 1990s saw a drop.
In the case of civil servant A, he can sell his $2M semi-D, buy a 3 room flat for $300K and fund his retirement. Someone with a 5 room HDB flat can also downgrade. You can't get those kind of asset appreciation from FDs and the usual instruments. What is a frugal chap in a 4 room flat going do with with savings and interest accrued. He still won't be in the same asset class. By downgrading, I mean an outright purchase and not another loan.
By the way, capital appreciation is not a myth. Its an empricial fact in HDB, private properties and the world over. In the old days, the advice to the less sophisticated is to put all your spare cash in your home. It was sound then and it is sound now.
When you deal with properties and equities, the outlook is always long term. Short term has downswings. 1990s saw a drop.
In the case of civil servant A, he can sell his $2M semi-D, buy a 3 room flat for $300K and fund his retirement. Someone with a 5 room HDB flat can also downgrade. You can't get those kind of asset appreciation from FDs and the usual instruments. What is a frugal chap in a 4 room flat going do with with savings and interest accrued. He still won't be in the same asset class. By downgrading, I mean an outright purchase and not another loan.
By the way, capital appreciation is not a myth. Its an empricial fact in HDB, private properties and the world over. In the old days, the advice to the less sophisticated is to put all your spare cash in your home. It was sound then and it is sound now.
Dear Scroobal,
I think you don't get my point.
First of all, even with real capital appreciation on our HDB flat, we cannot capitalize on it as those private property owner.
Secondly, if you bought the flat at $300K, I pay only $260K due to grant, and I sold it off at $400K as it appreciates, I will have to pay HDB $100K as resale levy before I could buy another flat. I might have "gained" $40K but seriously, this amount may just be enough to cover my interest cost.
This would mean that in effect, I gain nothing in spit of a capital gain of 33%!
Goh Meng Seng
I think you don't get my point.
First of all, even with real capital appreciation on our HDB flat, we cannot capitalize on it as those private property owner.
Secondly, if you bought the flat at $300K, I pay only $260K due to grant, and I sold it off at $400K as it appreciates, I will have to pay HDB $100K as resale levy before I could buy another flat. I might have "gained" $40K but seriously, this amount may just be enough to cover my interest cost.
This would mean that in effect, I gain nothing in spit of a capital gain of 33%!
Goh Meng Seng
Thats why we are having an asset bubble.
People now know that cash is worthless in the long run; Govs can just print their way out of debt.
Once the USA stops exporting inflation (cos they export nothing that the rest of the world needs except maybe education/movies/787s/micheal jackson), you will see our property bubble come back to haunt us.
This thread main point is that ppty prices are too high and its stifling entrepreneurship and SMEs as well.
Spore is not short of land! Look at the spore map/google! More than enough. The Gov wants you to think there is shortage of land and make you pay stupid prices for flats!
Spore is short of proper housing. We are short of decent homes at decent prices. We are short of privacy!
80% of spore homes are way below international/developed world standard! Even the condos in second tier china cities are better than our flats.
Anyway, the world is certainly not short of land.
just remember my maths
assume you and wife bought flat at 25 y/o at $350,000 wth $35,000 in cpf account. based on 4%/p.a compund monthly
min payment to finish payment in 30 years is $1,500/mth
you hit the 120% of value in 23 years 4 mths which means when you about 49 years old you pay in cash, cannot use cpf anymore.
in the mean time you cannot lose your job to FTs, no emergency use of money, you kids hopefully finish their degrees in singapore etc etc
yes... this is the definiition of affordability by mapok tan
assume you and wife bought flat at 25 y/o at $350,000 wth $35,000 in cpf account. based on 4%/p.a compund monthly
min payment to finish payment in 30 years is $1,500/mth
you hit the 120% of value in 23 years 4 mths which means when you about 49 years old you pay in cash, cannot use cpf anymore.
in the mean time you cannot lose your job to FTs, no emergency use of money, you kids hopefully finish their degrees in singapore etc etc
yes... this is the definiition of affordability by mapok tan
Totally agree. The world is never short of land if you could distribute all the human evenly on the liveable land in the world. I would say the high prices are because of our perceived value associated with certain locations. In all around the world, in most cities, there will be a few districts that are so coveted by ppl, the prices will always be skyhigh. In reality, you could build the exact same house anywhere in the world with probably the same amount of money (not considering other things like transporting raw materials, etc). Why is that an apartment in Mahanttan can costs so much more than a suburban one? It's the address that gives the home the value. For that district, a limited amount of houses could be built and the competition for these places hot up when you have the uber-rich to fight. Hence the prices shoot up. So, the basic principe is really the simple demand and supply equation.
For SG case, it is also because of low supply but high demand that is driving the prices up. Well, can the prices always increase? It could since the supply of the land is well under-controlled by the government. I can release land or stop development as and when I like. The price, I say, it counts. You can't possibly buy land from other source. That's the power of monopoly.
For SG case, it is also because of low supply but high demand that is driving the prices up. Well, can the prices always increase? It could since the supply of the land is well under-controlled by the government. I can release land or stop development as and when I like. The price, I say, it counts. You can't possibly buy land from other source. That's the power of monopoly.
The prices provided for 1973 makes a rather meaningful comparison between now and then. Seems like hawkers have been subsidising Singaporeans as the country develops.
I think the government doesn't expect you to retire with a single cent in CPF OA. There is the minimum sum to lock your CPF from 55 to 62 even you somehow manage to accumulate savings in the OA despite the high prices of HDB flats.
Then there is CPF life to lock the money after 62. A mind game playing on Singaporeans' fear of living to a ripe old age of 85.
Seems like HDB calculated very carefully how much CPF is to be exhausted when they calculate the pricing of the flat.
Nothing is left to chance.
In the 70s, only husband need to be gainfully employed for 20 years to complete servicing the mortgage
Now husband and wife must be gainfully employed for 30 years to complete servicing the mortgage.
The intention is to keep Singaporeans in the workforce until 62. How you stay employed, the government doesn't address the issues. You are left to fend for yourself throughout this 30 years of indebtedness.
So one hand, HDB wants to charge you high prices for new flats, the other hand ICA welcomes ANYONE, euphemistically labelled as FOREIGN TALENT, who wants to work in Singapore with open arms, it up to the Singaporean himself or herself to stay employed, payoff the mortgage and somehow still have money to retire.
By creating this situation where you in fact being held hostage to the HDB mortgage slavery while competing with the Foreign talents, you are simply at the mercy of the PAP.
We, the post 80s generation, are now given the social contract whereby we now have to run twice as hard on the thread mill.
We are “房奴” mortgage slaves in Singapore.
Fellow Singaporeans your family's cost of living have just been doubled with a stroke of a pen without you even noticing it. Your family's wealth have just been reduced by half without your realising it.
HDB mortgage slavery for Singaporean! Billions for the Leepublic!
Embrace your mortgage slavery or seek an alternative through the ballot box...
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"'The Grip of Death' is a literal translation of 'mortgage', when the owner of a house pledges his or her house to another with a handshake...unto death."
http://www.cfoss.com/grip.html
Chapter 1: The debt-based financial system
When a profession fails to deliver, people inevitably suffer. When that profession happens to be the study and practice of economics, the entire world suffers. The deluge of social and environmental problems brought on by humanity's endeavours to be 'economic' suggest that the economics profession is not just failing - its advice is proving mind-bogglingly destructive.
Our government officials, political economists and newspaper columnists appear intellectually content with the current arrangements, oblivious to the depth of the crisis that economics presents to the world. They still happily argue about the dangers of 'overheating' or needing to 'cool off ', as if an economy that functions along the lines of a domestic boiler or kitchen toaster provides an acceptable basis for co-ordinating human activity. They also appear perfectly satisfied to continue with 'business as usual', without questioning the most startling and contradictory statements issuing from the world of money and economics.
http://www.cfoss.com/grip.html
Chapter 1: The debt-based financial system
When a profession fails to deliver, people inevitably suffer. When that profession happens to be the study and practice of economics, the entire world suffers. The deluge of social and environmental problems brought on by humanity's endeavours to be 'economic' suggest that the economics profession is not just failing - its advice is proving mind-bogglingly destructive.
Our government officials, political economists and newspaper columnists appear intellectually content with the current arrangements, oblivious to the depth of the crisis that economics presents to the world. They still happily argue about the dangers of 'overheating' or needing to 'cool off ', as if an economy that functions along the lines of a domestic boiler or kitchen toaster provides an acceptable basis for co-ordinating human activity. They also appear perfectly satisfied to continue with 'business as usual', without questioning the most startling and contradictory statements issuing from the world of money and economics.
房奴
概述
http://baike.baidu.com/view/41339.htm
房奴（mortgage slave）一词是教育部2007年8月公布的171个汉语新词之一。“房奴”意思为房屋的奴隶。“房奴”是指城镇居民抵押贷款购房，在生命黄金时期中的 20到30年，每年用占可支配收入的40%至50%甚至更高的比例偿还贷款本息，从而造成居民家庭生活的长期压力，影响正常消费。购房影响到自己教育支出、医药费支出和抚养老人等，使得家庭生活质量下降，甚至让人感到奴役般的压抑。
概述
http://baike.baidu.com/view/41339.htm
房奴（mortgage slave）一词是教育部2007年8月公布的171个汉语新词之一。“房奴”意思为房屋的奴隶。“房奴”是指城镇居民抵押贷款购房，在生命黄金时期中的 20到30年，每年用占可支配收入的40%至50%甚至更高的比例偿还贷款本息，从而造成居民家庭生活的长期压力，影响正常消费。购房影响到自己教育支出、医药费支出和抚养老人等，使得家庭生活质量下降，甚至让人感到奴役般的压抑。
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The Chinese Communist Party has found a far more effective method of controlling the Chinese population without the use of bullets from AK-47s or tanks rolling over dissidents.
PAP is gentler and kinder, they want no more then 30%.
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Looks like Harry has learn a new trick from the Mainlanders...
No wonder he likes Mainlanders so much...
Looks like Harry has learn a new trick from the Mainlanders...
No wonder he likes Mainlanders so much...
Stretching a HDB loan up to 30 years is a bit too long.
Firstly, the segregation of the HDB price increase that is due to inflation outside of the PAP's control and those due to PAP's policies has never been attempted.
Secondly, so long as the PAP is in power, HDB flat prices will continue to rise.
Thirdly, so long as HDB flat prices continue to rise, PAP will always be in power.
Fourthly, 30 years of mortgages will create mortgage slaves as GMS said and be subjected to immense uncertainties as commoner said.
Finally, purpose of this thread...... vote Mah Bow Tan out, Goh Meng Seng in?
Firstly, the segregation of the HDB price increase that is due to inflation outside of the PAP's control and those due to PAP's policies has never been attempted.
Secondly, so long as the PAP is in power, HDB flat prices will continue to rise.
Thirdly, so long as HDB flat prices continue to rise, PAP will always be in power.
Fourthly, 30 years of mortgages will create mortgage slaves as GMS said and be subjected to immense uncertainties as commoner said.
Finally, purpose of this thread...... vote Mah Bow Tan out, Goh Meng Seng in?
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