HDB Mortgage SLAVES

[QXD]

You have a either a penchant or the lack of intelligence for stating the obvious.

Just discovered chapter 1 of your finance textbook textbook I see, small boy...

Let me skip ahead and teach you a new term called in-fla-tion.

Don't get all confused now...

If your cost of funds exceed the potential ROI , it makes sense to borrow , cause by parking your ready funds elsewhere , one can earn a better ROI

Singapore interest rates are low , one can earn better returns by parking one's funds elsewhere.

 

[theDoors]

If we compared the previous cost based HDB flat pricing approach and the current market based pricing approach, the subsidy has been drastically reduced over the years.



Based on info from this link
http://newspapers.nl.sg/Digitised/Page/straitstimes19820923.1.8.aspx

Cost based approach:

Total cost of new flat: $59000, buyer pay $30,900, government pay $28,1000; Subsidy 47.62%

Market based approach:

Total building cost new flat $300,001 (HDB refuse to reveal actual building cost), buyer pay $260,000 (current pricing of new 4 room Sengkang flats); subsidy:15.38%

Click on the link.

It's a Straits Time archive from 1981. Pretty interesting to read.

 

[hochiminhcity]

I am sore with having to pay resale levy of 50% when I sold my flat in 1994 based on selling price, what it mean i have to share my profit with HDB.
I downgrade because of finances problem,I think it an unfair ruling.
I am using CPF to buy my flat, it my own money . where is the logic

 

[chinkangkor]

"affordable housing—ie, the average price paid by first-time buyers is four times the average salary or less"

The Economist

 

[kojakbt]

Its a ridiculous price to pay for a 99 tenancy agreement.

Actually, I don't know why this is an issue at all. If you talk to most ah pek and ah soh, it's not a big issue. To them, HDB 99 year tenancy is the same as those 99 year condo. They can sell away easily at the open market. So, ah peh, ah soh don't really care how you call it or word it in the contract as long as they can sell off easily when they want to.

Hence, I think this oft-argument that you don't own HDB blah blah blah is moot. Try explaining this to the ah pek and ah soh in legal terms and they will fall asleep. To them, it's as good as they "own" it cause they can sell it and get back any returns to their own pockets. In a real leasing case, you can't even sell it since you don't own it.

Avoid using this argument. Doesn't bite with the man in the street.

 

[kojakbt]

YOu are in no position to tell SInkieland is ready or not for protest and revolt. It should be a leader that initiated that. I dun think you have the balls and capabilites to be in a leader position. It really shows by your mindset and the way you reply to my posts.

A leader initiate and play around the pre-requisite, not subject to it.

You are those who dare not challenge the system and yet try to show that you are doing something but what you only do is just paper , talk-a-lot work.

What you know and what you do to solve is totally different thing.

You come and initiate a revolution lah...

 

[kojakbt]

He is wasting his breathe with People who bought their flats at anytime in the 70's eighties and or early nineties. They are sitting on cash on appreciating asset values and try as he says that its an illusion, that one will have to downgrade etc etc etc, the the people know best and they know who is better off in terms of overall wealth.

Locke

It's interesting. Most analysts would think that those who bought their HDBs in earlier generation would be very happy with PAP's "asset enhancement" policy and to continue to support them, since the value of their HDB's asset has appreciated considerably and they ought to be feeling very "wealthy" now...

However, talking to many friends and strangers in coffee shops, the reality is quite different. First of all, most DON'T feel "wealthy" at all. And when I ask them why not sell their flats and en-cash their flats, they will inadvertently ask "then move where? Everywhere is also expensive". Downgrade? "I'm happy with where I'm living now", "I don't want my relatives and friends to think that I'm in financial troubles" etc...

But most impt thing I noticed is that these fellas in their 40s and 50s are worried for their children. They are worried that their children will have to work to get more cash in order to buy the current more expensive HDBs and will delay their marriage. Some even worried that they will have to fork out money for their children to buy the more expensive flats...

So, Locke, the reality at the ground is very different lah.... even those who bought their HDBs 20 years ago, they are not happy also with the current more expensive HDB prices.... asset inflation does not benefit anyone...

 

[kojakbt]

Of course, slavery would be a popular term since prices now are perceived by locals to be higher than usual, but considering how home owners have seen their home values increase through the years, one can one surmise that, and as I have said a long long time ago, Singaporeans should learn how to be investment savvy; Make themselves more knowledgeable in controlling their own finances, stop expecting the government to spoonfeed you all.

Er bro... not many Singaporeans can like you... an investment guru. Many are just your regular ah soh, ah pek trying to make a decent living here, getting by with a household income of 2-3K.

Even the most capitalistic society in the world, USA, has various forms of subsidies. Most economies are somewhere in the middle of 100% centrally-planned vs 100% capitalistic economy.

At this point, Singapore used to be on the left, but I think has swung too far right in recent times. Time to move back to the left a bit or there will be even greater social problems later (in China, where the income gap has become too great, poor farmers who are jealous of the rich folks are knifing the school kids of rich families in school).

QXD, I'm sure you don't want your kids to get knifed one day in Singapore, right?

 

[kojakbt]

I would like to ask why it's ok for first flat buyers to enjoy ever larger 'jackpot' price differentials between new and resale HDB flats by having HDB to artificially depress new and condone runaway resale flat prices?

PAP just need to cut back PR population by not renewing some of them and HDB resale price will slowly fall back to saner price...

Is this an equitable and sound policy? Moreover, first-time HDB flat buyers need not have to be all sgporeans. A newly minted PR/PRs can tag along a sgporean to take advantage of 'your proposed system' and make tons of $$ in the process. Is that you and your party's platform? Please think thru' this before PAP nails you on this.

This one cannot argue like that lah... if he is a Singaporean, he is a Singaporean. Then Singaporean should be able to enjoy the benefits. If you think the PR is just "tagging" along type, then don't give him citizenship lah... if it's up to me, I will only give PR a Singapore citizenship if he is willing to serve NS or send his son to serve NS....

Leave this populist HDB non-issue alone. You aren't up to it to criticise in my honest, honest opinion.

Bro, how can you like that.... anyone can criticize, including us non-politicians. Who are you to dictate what Goh Meng Seng can or cannot say? If you don't like to hear what he say, then ignore this thread or dont vote for him if he comes to your place to run for election. But you got no right to tell him to shut up...

 

[theDoors]

It's interesting. Most analysts would think that those who bought their HDBs in earlier generation would be very happy with PAP's "asset enhancement" policy and to continue to support them, since the value of their HDB's asset has appreciated considerably and they ought to be feeling very "wealthy" now...

However, talking to many friends and strangers in coffee shops, the reality is quite different. First of all, most DON'T feel "wealthy" at all. And when I ask them why not sell their flats and en-cash their flats, they will inadvertently ask "then move where? Everywhere is also expensive". Downgrade? "I'm happy with where I'm living now", "I don't want my relatives and friends to think that I'm in financial troubles" etc...

But most impt thing I noticed is that these fellas in their 40s and 50s are worried for their children. They are worried that their children will have to work to get more cash in order to buy the current more expensive HDBs and will delay their marriage. Some even worried that they will have to fork out money for their children to buy the more expensive flats...

So, Locke, the reality at the ground is very different lah.... even those who bought their HDBs 20 years ago, they are not happy also with the current more expensive HDB prices.... asset inflation does not benefit anyone...

It's just paper gain. You just end up paying more for property tax.

 

[kojakbt]

Actually , Real Investors seldom pay anything in Full Cash ; investment is not dependent solely on affordability , but by the cost of funds vs projected ROI (return on Investment)

If your cost of funds exceed the potential ROI , it makes sense to borrow , cause by parking your ready funds elsewhere , one can earn a better ROI

But of course, by leveraging, risk will also increase proportionally.... in a down cycle, many property players will also go bankrupt. I've seen it all.... But then, most "gamblers" will think they can never lose lah... HAHA!

 

[kojakbt]

"affordable housing—ie, the average price paid by first-time buyers is four times the average salary or less"

The Economist

This is another way to measure by using Price/Income affordability ratio. I think internationally, most would agree on a ratio of 5 or less.

If you work backwards by factoring the loan and debt servicing in most economies, it would be about 30% or less too... the other way of measuring housing affordability...

 

[theDoors]

When I joined the work force in 1993 the CPF contribution rate was 40% and the CPF capped was $6000. The maximum one can contribute to the CPF is $2400 per month.

When I purchased my new HDB 4 room in 2004 flat, it cost $125,000.

Currently, the price of new HDB 4 room flat is $260,000.CPF contribution rate is 34.5% at $4500 cap. The maximum one can contribute to CPF is $1552.50 per month.

New HDB flats prices have more than doubled in the midst of the worst global economic recession.

At the same time, CPF contribution has been drastically reduced. It's no wonder Singaporeans are left with nothing much to retire with.

Does the minimum sum make sense, when Singaporeans are saddled with higher mortgage obligations, mean testing for health care with drastically reduce CPF contributions?

By the time I retire, I calculated the minimum sum required would be $249,000 based on the current annual $6000 increment.

I transferred $117,000 from my OA to SA and write it off as minimum sum requirement. compounding at 4% interest (assuming it holds constant at 4%), it should generate the $249,000 required.

But $249,000 minimum sum to buy an annuity? I think that's madness.

 

[kojakbt]

<table width="100%" border="0" cellpadding="0" cellspacing="0"><tbody> <tr><td class="wintiny" align="right" nowrap="nowrap">34437.3 in reply to 34437.1 </td></tr> <tr> <td height="8">
</td></tr> <tr> <td class="msgtxt"> I agree with Meng Seng that PAP has ignored or refuses to address the issue of the 30 year loan period. I believe that yes, even if 30% of income payment may be the international norm on measuring of housing affordability, but I don't think they set a 30 year loan period as the norm too. On the period of the mortgage, nothing is said.


However, I do agree with Meng Seng's analysis that stretching the loan to 30 years will leave less for building up for retirement. Most damaging of all is that one will have to keep ensuring that one is employed until 50 plus years old. And everyone knows that nowadays in Singapore, esp with the influx of FTs, as you reach 50, your chance of being retrenched becomes higher! The last 10 years of servicing the 30 year loan will be most challenging for Singaporeans, indeed.


>And if you die early, the government of bank will have the last laugh in taking your whole flat without paying anything further!


I think this one not so true lah. If a person dies and is unable to service the loan anymore, the bank or HDB will sell off the flat at market rate. After paying off the remainder of the loan, any excess will be returned back to the estate of the deceased. If it's reverse mortgage, it's the same thing. Whatever amount that HDB "owes" to the deceased will be returned back to his estate.
</td></tr></tbody></table>

 

[UpYoz_olo]

<table width="100%" border="0" cellpadding="0" cellspacing="0"><tbody> <tr><td class="wintiny" align="right" nowrap="nowrap">34437.3 in reply to 34437.1 </td></tr> <tr> <td height="8">
</td></tr> <tr> <td class="msgtxt"> I agree with Meng Seng that PAP has ignored or refuses to address the issue of the 30 year loan period. I believe that yes, even if 30% of income payment may be the international norm on measuring of housing affordability, but I don't think they set a 30 year loan period as the norm too. On the period of the mortgage, nothing is said.


However, I do agree with Meng Seng's analysis that stretching the loan to 30 years will leave less for building up for retirement. Most damaging of all is that one will have to keep ensuring that one is employed until 50 plus years old. And everyone knows that nowadays in Singapore, esp with the influx of FTs, as you reach 50, your chance of being retrenched becomes higher! The last 10 years of servicing the 30 year loan will be most challenging for Singaporeans, indeed.


>And if you die early, the government of bank will have the last laugh in taking your whole flat without paying anything further!


I think this one not so true lah. If a person dies and is unable to service the loan anymore, the bank or HDB will sell off the flat at market rate. After paying off the remainder of the loan, any excess will be returned back to the estate of the deceased. If it's reverse mortgage, it's the same thing. Whatever amount that HDB "owes" to the deceased will be returned back to his estate.
</td></tr></tbody></table>

Judging by your line of reasoning, you will even eat shit if GMS says it's good. I didn't asked GMS to shut up. In fact I wanted him to come forth with reasons he suggested HDB or the government to implement policies he like. He shut up mysteriously where he was so vociferous previously. I find it damn strange.

You don't have to speak for him. I want him, as aspiring opposition politician to convince me he babbling and hiding when the going gets tough. I'm still waiting for him to rejoin this discussion.

Kojakbt, you are a clown. I'm asking why GMS wanted 1st time HDB applicants to enjoy huge gains when the beneficiaries may not all be sgporeans.

As a responsible aspiring policitian, one cannot hit and run and hide. I asked questions which I expected any self-respecting politician to answer. But the answers didn't appear. I'm damn disappointed.

How can I give my vote anyhow to these politicians? How???


:oIo:

 

[kojakbt]

> Judging by your line of reasoning, you will even eat shit if GMS says it's good.

[COLOR=_______]No. If I think it's a good argument, I'll support. If it isn't, I don't. It's that simple.[/COLOR]

> I didn't asked GMS to shut up. In fact I wanted him to come forth with reasons he suggested HDB or the government to implement policies he like. He shut up mysteriously where he was so vociferous previously. I find it damn strange.

[COLOR=_______]I thought he already said giving higher subsidies to 1st time Singapore buyers for HDB resales?[/COLOR]

> You don't have to speak for him.

[COLOR=_______]I don't speak for him.[/COLOR]

> Kojakbt, you are a clown.

[COLOR=_______]Well, I try to entertain when I can... [/COLOR]

> I'm asking why GMS wanted 1st time HDB applicants to enjoy huge gains when the beneficiaries may not all be sgporeans.

[COLOR=_______]If you are talking about new HDBs, only Singaporeans can buy. If you're talking about HDB resales, if I have my way, I would bar PRs from buying altogether. [/COLOR]

> How can I give my vote anyhow to these politicians? How???

[COLOR=_______]Quite frankly, these days I've changed my thinking. Even if oppo send a monkey to represent them, I would still vote for oppo. Voting for PAP is even worse![/COLOR]

 

[chinkangkor]

PRs forming family nuclei are eligible to buy HDB resale flats with no restriction on income ceiling so long they do not apply for HDB loans or grants. The best of this housing policy for foreigners (PRs) is that they can still own private properties so long they stay in the HDB flat.

With such a housing policy encouraging rich foreigners (PRs) to have a go at the HDB resale market, is it any wonder why the HDB resale prices skyrocketed with the explosion of the PRs population in the last few years?

 

[kojakbt]

PRs forming family nuclei are eligible to buy HDB resale flats with no restriction on income ceiling so long they do not apply for HDB loans or grants. The best of this housing policy for foreigners (PRs) is that they can still own private properties so long they stay in the HDB flat.

With such a housing policy encouraging rich foreigners (PRs) to have a go at the HDB resale market, is it any wonder why the HDB resale prices skyrocketed with the explosion of the PRs population in the last few years?

In the past, many young couples who want to get married quickly can go for HDB resales. HDB resales were a lot cheaper then. Also, for some, they just want to stay closer to their parents...

Now, this option is gone for young couples liao... they have to go for BOT, which means got to wait for 3 years or so...

Is it any wonder that young couples are married later and having kids later?

 

[chinkangkor]

In the past, many young couples who want to get married quickly can go for HDB resales. HDB resales were a lot cheaper then. Also, for some, they just want to stay closer to their parents...

Now, this option is gone for young couples liao... they have to go for BOT, which means got to wait for 3 years or so...

Is it any wonder that young couples are married later and having kids later?

I agree with you that our housing woes will worsen our already very low birth rate. Ordinary people like us can see this clearly but it's strange that our highly paid PAP govt seems to have problem seeing what we are seeing.

 

[chinkangkor]

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Buying a Resale Flat
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Eligibility SchemesEthnic Integration Policy & SPR QuotaEligibility To Buy : Public Scheme

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The Public Scheme allows you to buy an HDB resale flat with your family from the open market.

To buy a resale flat under this Scheme, you must meet the following eligibility conditions.

Criteria

Detailed Description


Citizenship You must:
Be a Singapore Citizen (SC) or Singapore Permanent Resident (SPR)
Include at least one listed occupant who is a SC or SPR



Age You must be at least 21 years old.


Family Nucleus You must form a family nucleus, such as:
Your spouse and children, if any, or
Your parents and siblings, or
Your children under your legal custody, care and control (for widowed, divorced or separated persons)



Income Ceiling There is no income ceiling unless you are applying for CPF Housing Grant and/or an HDB Loan.


Ownership of Private Residential Property

You can own private property (unless you are applying for a CPF Housing Grant and/or an HDB loan). However, you must live in the HDB resale flat.


Ethnic Integration Policy and SPR Quota Proportion of your ethnic group and SPR quota (if applicable) has not reached the limit. Find out more about the Ethnic Integration Policy (EIP) and SPR Quota.





CPF Housing Grant

Under the Public Scheme, you may apply for one of the following CPF Housing Grant if you meet all the eligibility conditions for the respective grant:
CPF Housing Grant for Family
CPF Housing Grant for Singles




Last Updated on 09 Mar 2010
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If you are buying the resale flat jointly with one or more persons (up to a maximum of four persons), you must decide how you and the other co-owners would want to hold the property.



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