HDB: Myths & Truth I

[Goh Meng Seng]

It has been more than 2 weeks since I sent in my email to MOF to obtain the data/methodology for Mr Tharman’s statement in Parliament which said that poor income families in Singapore would be helped to the sum of $460,000. In spite of sending reminder, I have yet to receive a response.

If the numbers are accurate and correct, it is unknown why MOF would refuse to release the data/methodology. Without transparency, there can only be rumor and speculation about the accuracy on what Mr Thraman claimed.

Well, throwing numbers and figures in a serious place like Parliament could be pretty easy. However if such so call "statistics" or "figures" are not and could not subject to public scrutiny to the fullest details, then I guess such talk is just <span style="font-weight:bold;">Highfalutin</span> expression without any solid foundation.

I have also written to HDB to seek clarifications on what Minister Mah has brought up in parliament about the affordability issue. Similarly, I have been ignored. This is a government that self-proclaim to be the First World government, but without any "Transparency" in action. A government that dare not provide any proof that could withstand public scrutiny. It is really up to Singaporeans to decide whether to believe such talks or not.

I shall now move on to Minister Mah's HDB MYTHS and TRUTH.

<span style="font-weight:bold;">MYTH I: There are not enough HDB flats to meet demand.
HIS RESPONSE:
# The HDB released 13,500 new flats last year and will release another 12,000 or more this year. This is more than the total number of flats in Clementi or Jurong East (about 23,000 flats each).</span>

Based on the HDB website, it takes 3 years on average for a new HBD flat to be built. The 13,500 new flats released in 2009 will therefore only be available for occupancy in 2012. Similarly the 12,000 HDB flats released in 2010 will not be available for occupancy until 2013.

There is a housing shortage in Singapore NOW. From 2003 to 2008. the total population increased by 17.6% while resident population increased by 8.2%. The number of HDB flats however only increased by 1.2.%.

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The inadequate new HDB flats to meet demand caused a destructive boom-bust cycle to be formed. Prices of HDB prices have skyrocketed as people need HDB flats NOW. The subsequent flooding of the market with HDB flats in 2012/2013 will mean that there is likely to be collapse of HDB prices by 2012.

A conservative estimate of the need to provide 4% more flats compare to 2003 would mean a need to increase new HDB flats by at least 24,000 flats. This should be on top of the natural annual demand of new flats derived from new couples.

YPAP has published Mr Mah Bow Tan’s speech in Parliament

http://www.youngpap.org.sg/index.ph...y-of-hdb-flats&catid=24:political-discussions

To avoid misquoting Mr Mah, I had waited for a copy of the speech to be released on an official PAP platform before commenting on it. There are some parts of the speech which I do not understand. I have written in to the Ministry of National Development to clarify what Mr Mah meant, but as I have said earlier, I have been ignored totally.

In view of the inability of HDB to meet demand for 2003 and 2008, I would like to discuss Mr Mah’s Build-To-Order (BTO) system and how it caused the current HDB housing bubble.

Under the BTO scheme, HDB flats are built based on application demand. In Mr Mah’s own words, the intent of the BTO scheme is so that HDB is not stuck with a large inventory of unsold flats.

To prove his point, Mr Mah then sprouts out an impressive looking set of statistics to show that the BTO system is working and that there are sufficient HDB flats to meet demand.

The fatal flaw in Mr Mah’s reasoning is that it takes 3 years or more for BTO flats to be built. What happens then if there is a sudden spike in housing demand? What can Mr Mah do?

ABSOLUTELY NOTHING !

Sudden spikes in housing demand coincide with booms in the Singapore economy. During such booms, the labor market tightens. To keep wages down and prevent Singaporeans from job hopping, large numbers of FT are allowed into Singapore. These FT need a place to stay and therefore push up rental and property prices. PRs could only buy from the HDB resale market but the truth is, how many Singaporeans could afford to sell their HDB flats without buying another HDB flat for them to live in? Without a stockpile and a 3 years time lag for new HDB flats to be built, what can Mr Mah do about skyrocketing HDB prices?

ABSOLUTELY NOTHING !

If we stick with the current BTO system, we will have a continuous series of destructive boom-bust housing cycles. During such cycles, there will be a small group of individuals who earn supernormal profit. There will however be a much larger group who will suffer large paper losses and be saddled with a huge debt for possibly the rest of their lives.

The total mismatch of IMMEDIATE demand and supply in the HDB resale market is basically caused by the lag effect of HDB supply of new flats. Singaporeans could not possibly sell their flats to PRs due to PAP's own liberal FT policy basically because they could not get any new flats from HDB at all.

This in turn created a round robin feedback effect on the whole system. HDB resale prices went up, causing the prices of new HDB flats to go up as well. This in turn cause deferment of purchase of new HDB flats by the lower income couples.

There is nothing much which can be done to help the victims of the current boom-bust housing cycle caused by Mr Mah’s BTO system. The best that can be done is to change the system to protect future generations. As part of comprehensive HDB housing reform, I would like to propose

1) Revert to the previous Build-To-Sell system

2) Maintain a strategic stockpile of HDB flats which can be released into the market to stop housing bubbles from forming

3) Reduce the time to build HDB flats

4) Have a long term policy of matching available HDB flats to the Total Population of Singapore.

Goh Meng Seng

 

[Maximilian Chua-Heng]

1414 huat ah!!!

 

[Ramseth]

It has been more than 2 weeks since I sent in my email to MOF to obtain the data/methodology for Mr Tharman’s statement in Parliament which said that poor income families in Singapore would be helped to the sum of $460,000. In spite of sending reminder, I have yet to receive a response.

Commonsense, commonsense, use your brains, use your brains.

If a lower income family is helped to the tune of almost half a million dollars, it'd be richer than a middle class family. Perhaps the middle class would like to resign their jobs and take up this offer to downgrade to lower class and become richer by almost half a million dollars, by courtesy and generosity of the honorable Finance Minster.

However, if he means that all families in Singapore classified as poor combined received a total of S$460,000 in aids, then that's believeable.

 

[Frankiestine]

I hope the opposition can capitalize on issues such as health care affordability, the CPF Life and housing into a smoking gun for those dogs. These are hot topic that affects the very core of the people especially the heartlanders staying in HDB.

Health care is a no brainer, considering how those dogs are now admitting that it is cheaper to seek medical treatment else where other then here. That is an open admission that they are unable to provide everyone with AFFORDABLE MEDICAL CARE!!

 

[aurvandil]

Minister Tharman said the following below. It is very hard to understand how the numbers add up to $460k. According to what Mr Tharman said, 60% or $276k goes to education and skills. How does that add up?

----

Mr Tharman: If we add this up over a lifetime, the support the Government is providing is substantial. Take a family in the bottom 20% of household incomes. The husband and wife are in their mid-20s. He earns $1,000, while she earns $500 from part-time work. They have just purchased a 3-room HDB flat costing about $200,000 near their parents. Let us say they have two children, one of whom eventually goes to a polytechnic, the other to ITE.


Over the next 60 years, this family can expect to receive transfers of about $460,000 in real terms (2010 prices) [Chart 6]. About 60% of this would comprise Government subsidies for their education and skills and to help them build up their assets. This excludes Government spending on education that goes to all children. The remaining 40% would comprise support to help them meet immediate needs, through WIS and discretionary financial assistance such as Work Support and Medifund subsidies.

 

[downgrader]

besotted's theory of HDB pricing is the best

he likes to scold people but on the matter of HDB i think he is spot on

the pricing has little to do with market forces although market forces are used to justify it

the pricing is social engineering - because singapore has no natural resources, the HDB will price it so that average Teo, Ahmad and Subra have to work 30 years to pay off your mortgage

the added bonus is that HDB receives the money upfront

 

[Unrepented]

Wonder why it takes an average of 3 years to build a block of HDB flat. Any bros in the construction industry care to input? What I know is it is possible to complete one level per 24hrs. Factoring all other variables such as infrastrure, sewage etc, 6 months? Ok lah make it one year. Preparation of the ground at site in advance. How to drag 3 years???

Talking about productivity. Got project schedules to show public why 3 years bo? So that citizens can give ideas to speed it up and improve productivity mah.

 

[aurvandil]

Wonder why it takes an average of 3 years to build a block of HDB flat. Any bros in the construction industry care to input? What I know is it is possible to complete one level per 24hrs. Factoring all other variables such as infrastrure, sewage etc, 6 months? Ok lah make it one year. Preparation of the ground at site in advance. How to drag 3 years???

Talking about productivity. Got project schedules to show public why 3 years bo? So that citizens can give ideas to speed it up and improve productivity mah.

According to Mr Mah, he already made a big productivity improvement.
Last time, you have to wait 7 years to get a HDB flat from him.

 

[Goh Meng Seng]

Are you in construction line?

I am also a bit puzzled about the 3 years timing, especially so when the design of HDB flats is pretty standard.

But since they say 3 years, then 3 years lor!

Goh Meng Seng

Wonder why it takes an average of 3 years to build a block of HDB flat. Any bros in the construction industry care to input? What I know is it is possible to complete one level per 24hrs. Factoring all other variables such as infrastrure, sewage etc, 6 months? Ok lah make it one year. Preparation of the ground at site in advance. How to drag 3 years???

Talking about productivity. Got project schedules to show public why 3 years bo? So that citizens can give ideas to speed it up and improve productivity mah.

 

[Papsmearer]

Minister Tharman said the following below. It is very hard to understand how the numbers add up to $460k. According to what Mr Tharman said, 60% or $276k goes to education and skills. How does that add up?

----

Mr Tharman: If we add this up over a lifetime, the support the Government is providing is substantial. Take a family in the bottom 20% of household incomes. The husband and wife are in their mid-20s. He earns $1,000, while she earns $500 from part-time work. They have just purchased a 3-room HDB flat costing about $200,000 near their parents. Let us say they have two children, one of whom eventually goes to a polytechnic, the other to ITE.


Over the next 60 years, this family can expect to receive transfers of about $460,000 in real terms (2010 prices) [Chart 6]. About 60% of this would comprise Government subsidies for their education and skills and to help them build up their assets. This excludes Government spending on education that goes to all children. The remaining 40% would comprise support to help them meet immediate needs, through WIS and discretionary financial assistance such as Work Support and Medifund subsidies.

Aiyah, please lah. After all this time. GMS and you still can't read between the lines mah

Firstly, Tharm Shagyourmama has failed to indicate where $200,000 flats can be found? Is this a mythical beaset, like say a unicorn?

Secondly, having found this mythical $200K flat, it coincidentally happens to be near their parents' flat!! Shocking. Wah Lau. Assuming their parents bought their own flat some time ago, they are living in a mature and established housing estate. Can get $200K fkat there meh? THARM,........SHOW ME THE MONEY!.

Thirdly, 40% of this $460K supposedly will go to Work Support, Medifund, etc. Will these people even meet the means test? Will the minister indicate how many applicants have successfully received any significant help from these sources? They make people jump thru hoops to get these money and in the end, their may goal is disqualify as many candidates as possible. Say so lah, Tharm.

Fourthly, 60% goes to other subsidies and read the part that says "helps build up their assets" In other words, Tharm is talking about HDB Market subsidies for their flat. So this arbitrary number could be $150K for all any one knows. rest assured that education and skills subsidies will not be easy to get, and if you get them, it means you have been retrenched or something like that.

Fifthly, exactly how would a couple with household income of $1500 a month qualify for a HDB flat mortgage to purchase a $200K flat, and they are in their mid 20s which means the wife has been out of work for some substantial period the last few years giving birth to their 2 kids?

This scenario that Tharm has painted is utterly unrealistic, and maybe the grand total of 4 couples in the whole country might qualify for the full $460K. What he is saying is that if this mythical family happens to do exactly what he says they will do, and if they manage to get the maximum of all the subsidies he says they can get, and if the stars are in alignment, than maybe they can get $460K, which is actually only $230K per person, and over their life time is a lousy $4000 per year, or $333 per month. Wow, I feel so rich already. His scenario does not have the slightest tolerance for deviation. eg. what if one of the kids get into a longer term tertiary education like NUS, will they also get a subsidy or how will the family afford the kids uni education.

 

[aurvandil]

Fourthly, 60% goes to other subsidies and read the part that says "helps build up their assets" In other words, Tharm is talking about HDB Market subsidies for their flat. So this arbitrary number could be $150K for all any one knows. rest assured that education and skills subsidies will not be easy to get, and if you get them, it means you have been retrenched or something like that.

Based on his sppech, I don't think Mr Tharman is referring to HDB Market subsidies. He was quite specifically talking about education and skills upgrading. I found this to be very puzzling as 60% ($276k) seems to be an almost unbelivable number.

The funny numbes aside, the concern is that this is part of the productivity/skills upgrading they have been talking about. Instead of spending the money to help improve the lives of Singaporeans, it gets squandered on overpriced education courses. If you look at the newspapers, there is no shortage of education providers offering all sorts of courses. For a short 6 week course, you can easily spend $2k to $3k.

The recent statistics on SPUR training should give a good reality check. After completing the SPUR courses, only 6% got a pay increment. In the real world, it is a waste of time and money to go for training if it doesn't translate to tangible income increase.

 

[Goh Meng Seng]

Dear Papsmearer,

You have given my game plan away! LOL!

Goh Meng Seng

Aiyah, please lah. After all this time. GMS and you still can't read between the lines mah

Firstly, Tharm Shagyourmama has failed to indicate where $200,000 flats can be found? Is this a mythical beaset, like say a unicorn?

Secondly, having found this mythical $200K flat, it coincidentally happens to be near their parents' flat!! Shocking. Wah Lau. Assuming their parents bought their own flat some time ago, they are living in a mature and established housing estate. Can get $200K fkat there meh? THARM,........SHOW ME THE MONEY!.

Thirdly, 40% of this $460K supposedly will go to Work Support, Medifund, etc. Will these people even meet the means test? Will the minister indicate how many applicants have successfully received any significant help from these sources? They make people jump thru hoops to get these money and in the end, their may goal is disqualify as many candidates as possible. Say so lah, Tharm.

Fourthly, 60% goes to other subsidies and read the part that says "helps build up their assets" In other words, Tharm is talking about HDB Market subsidies for their flat. So this arbitrary number could be $150K for all any one knows. rest assured that education and skills subsidies will not be easy to get, and if you get them, it means you have been retrenched or something like that.

Fifthly, exactly how would a couple with household income of $1500 a month qualify for a HDB flat mortgage to purchase a $200K flat, and they are in their mid 20s which means the wife has been out of work for some substantial period the last few years giving birth to their 2 kids?

This scenario that Tharm has painted is utterly unrealistic, and maybe the grand total of 4 couples in the whole country might qualify for the full $460K. What he is saying is that if this mythical family happens to do exactly what he says they will do, and if they manage to get the maximum of all the subsidies he says they can get, and if the stars are in alignment, than maybe they can get $460K, which is actually only $230K per person, and over their life time is a lousy $4000 per year, or $333 per month. Wow, I feel so rich already. His scenario does not have the slightest tolerance for deviation. eg. what if one of the kids get into a longer term tertiary education like NUS, will they also get a subsidy or how will the family afford the kids uni education.

 

[jw5]

Dear Papsmearer,

You have given my game plan away! LOL!

Goh Meng Seng

GMS

I suspect that if you are determined to embark on this journey, whether you get into parliament or not, you are going to be writing a lot of:
"It has been 2 weeks since I sent in my e-mail .................................."

Good luck and keep up the good work.

 

[Goh Meng Seng]

Haha!

We need to push the envelops repeatedly so to achieve a more transparent government. We must let those people up there to realize that throwing mind boggling numbers and statistics must be back up with solid foundations and they must be ready for public scrutiny.

You can fool somebody some of the time, even everybody some of the time but never all the time. Someone has made a comment to me, Singaporeans are mostly SILENT MAJORITY but NOT STUPID MAJORITY. I fully agree with him.

Goh Meng Seng

GMS

I suspect that if you are determined to embark on this journey, whether you get into parliament or not, you are going to be writing a lot of:
"It has been 2 weeks since I sent in my e-mail .................................."

Good luck and keep up the good work.

 

[Ramseth]

GMS

I suspect that if you are determined to embark on this journey, whether you get into parliament or not, you are going to be writing a lot of:
"It has been 2 weeks since I sent in my e-mail .................................."

Good luck and keep up the good work.

It's commonsense GMS will get into Parliament. It's a matter of as MP or as NCMP only. They promised 9 to 12 NCMPs. Tell me, how is it possible that GMS don't get at least an NCMP seat even if he loses? As a Sec-Gen now and with an electoral track record of above 40%?

 

[RK85]

But according to recent BTO prices, a 3 rm flat is <$200K which should be enough for a young couple with avg. 2 kids. All new 3 rm flats are less than $200K. Unless u r talking about resale, which is a different story:

Fm HDB website:
Flat Type Floor Area
Range (sqm) Internal Floor
Area Range (sqm) No of
Units Indicative Price Range @@

3-Room 67 65 180 $128,000 - $171,000
4-Room 92 90 216 $216,000 - $271,000
5-Room 112 - 115 110 - 113 126 $281,000 - $352,000

Aiyah, please lah. After all this time. GMS and you still can't read between the lines mah

Firstly, Tharm Shagyourmama has failed to indicate where $200,000 flats can be found? Is this a mythical beaset, like say a unicorn?

 

[Goh Meng Seng]

These prices only applies to new estate, not matured estate where one could live near their parents.

Goh Meng Seng

But according to recent BTO prices, a 3 rm flat is <$200K which should be enough for a young couple with avg. 2 kids. All new 3 rm flats are less than $200K. Unless u r talking about resale, which is a different story:

Fm HDB website:
Flat Type Floor Area
Range (sqm) Internal Floor
Area Range (sqm) No of
Units Indicative Price Range @@

3-Room 67 65 180 $128,000 - $171,000
4-Room 92 90 216 $216,000 - $271,000
5-Room 112 - 115 110 - 113 126 $281,000 - $352,000

 

[RK85]

Ok.

But technically, Tharma could be partially right too. (me no PAP supporter, but only arguing based on concrete evidence).

Ok, lets talk about mature estates. Based on HDB website, the median resale value of a 3 rm flat is $260K. Highest can go up to > $300K for central locations & as low as $225K for Woodlands.

So eg, if a young couple die die want to stay near parents, they could buy resale + housing grant; can get at around $200K depending on location.

These prices only applies to new estate, not matured estate where one could live near their parents.

Goh Meng Seng

 

[aurvandil]

Ok.

But technically, Tharma could be partially right too. (me no PAP supporter, but only arguing based on concrete evidence).

Ok, lets talk about mature estates. Based on HDB website, the median resale value of a 3 rm flat is $260K. Highest can go up to > $300K for central locations & as low as $225K for Woodlands.

So eg, if a young couple die die want to stay near parents, they could buy resale + housing grant; can get at around $200K depending on location.

Without the data and methodology, it is very difficult for anyone to know how Minister Tharman got $460k. Since he has already announced it in Parliament, why not release the data and methodology? I fail to understand why Mr Tharman is not answering his email. If the numbers add up, this would be a huge vote winner for the PAP.

 

[Frankiestine]

I think the opposition should ditch their plans to attack shortie Mah in Tampines on the issue of housing affordability. Better to concentrate on Aljunied and Jurong since they gave the game away by indicating that they will increase conservancy fees. In fact the opposition should play the populist by promising not only are they not going to increase fees if elected but they will use the MP allowance to subsidized the town council.....at least it shows the people they have more heart then those money grubbers PAP dogs...