How Is Owning an HDB Flat an Asset?

[banova888]

A lot of people will say its a pigeon hole. lease from HDB. I am not disputing any of thes.

However for people who cannot afford private property, what are the alternatives they have? Stay in Kampong huts? The alternative is only left to HDB.

Comparatively with private housing, its much cheaper. As for the status, a 99-year lease with HDB, i feel is no different with a 99-year leasehold private condo. Unless you buy a FH condo. But then a FH condo, is just that Freehold airspace one is buying.

If there is no HDB flats, those who can't afford private housing, what should they do? Any advise?

Camp out in Marine Parade beach until the authorities chase you out.

 

[silverfox@]

Camp out in Marine Parade beach until the authorities chase you out.

What will happen if 80% of people in singapore does that? :o

 

[Papsmearer]

A lot of people will say its a pigeon hole. lease from HDB. I am not disputing any of thes.

However for people who cannot afford private property, what are the alternatives they have? Stay in Kampong huts? The alternative is only left to HDB.

Comparatively with private housing, its much cheaper. As for the status, a 99-year lease with HDB, i feel is no different with a 99-year leasehold private condo. Unless you buy a FH condo. But then a FH condo, is just that Freehold airspace one is buying.

If there is no HDB flats, those who can't afford private housing, what should they do? Any advise?

The solution is simple, but most s'poreans are simply too self centered or stupid to realise this. The solution is to stop buying HDB. If everyone instead of buying, were to live with their parents, or siblings, or rent, or do other things to avoid buying, within 2 years, the HDB will be brought to its knees. They will have no sales, and will eventually be forced to lower the HDB prices to an appropriately low level.

 

[The_Latest_H]

There is going to be huge repercussions if prices are going to be reduced to those like subsidised by govt or even anywhere near that.

Who would want to stay in serangoon if toa payoh hdb flats are going to be the same price?

Depreciation of houses due to lease and due to condition, wear and tear, etc.
Rental will drop heavily for flats. Everyone would not spend much on HDB flat, buy 1 and then keep the money to buy a 2nd home in the form of private property. A lot of people will start using the extra cash to buy private condos, propping up demand to such a state where its going to be a huge bubble.
When you have it, they want it too. What happens next would be the gulf in pricing between the private market and HDB. The rich would be even more rich as private market increase few folds while the poor and the middle class would widen further.

Never compare pricing with Australia or other countries with big lands and geography. Because to start of with, Singapore is only that small compared with them. We wouldn't have this problem to start of with if Singapore was even half as big as Malaysia.

Oh no, I don't mean standardised prices. HDB will set the prices according to the location, transportation accessibility, demand and supply, and the number of shops in a central location, the area's crime rate and its proximity to an industrial area or jail(which lowers the price).

Thus a flat in Marine Parade will be different from a flat in Tuas.

But unlike a free market, where prices are set by the demand & supply of the market, with no central authority, in a monopoly where HDB is the main supplier and central authority, HDB will have to set an index of reasonable prices as according to the factors considered for each area, and then impose a maximum price quota to prevent any more increases for flats in each area.

The enforcement of such a quota will then be given to an Independent board for independent oversight so as to ensure that HDB doesn't abuse its position as the sole supplier of public housing. HDB would also be liable for any monetary damages if they mislead anyone- through the judiciary system.

 

[Papsmearer]

won't work lah, half of the pop are FTs, they will continue to buy.....and sustain prices...

Are u sure that FTs are buying? Or are 4 or 5 kongsi to rent one flat?

 

[0939]

Buying a HDB is always an asset if you know how. If you can pay off within 10 years then is an asset. But if you have to stretch your loan to 25 years, then is no longer an asset but a burden.

 

[twinseeker]

Buying a HDB is always an asset if you know how. If you can pay off within 10 years then is an asset. But if you have to stretch your loan to 25 years, then is no longer an asset but a burden.

So far, I've not heard of people who're able to pay it off within 10yrs. While those who can afford it flocked towards condo & other landed properties.

 

[Conan the Barbarian]

The solution is simple, but most s'poreans are simply too self centered or stupid to realise this. The solution is to stop buying HDB. If everyone instead of buying, were to live with their parents, or siblings, or rent, or do other things to avoid buying, within 2 years, the HDB will be brought to its knees. They will have no sales, and will eventually be forced to lower the HDB prices to an appropriately low level.

Live with parents, siblings? What if your parents and siblings don't want to buy and choose to live with you instead?

HDB will not be brought down to its knees and lower prices. It simply stops building, thats all. No demand, no build, prices stay at the same levels.

Reason is, if prices come down now, more foreclosures will arise as banks will recall loans. This reason plus, why not make more money from the masses anyway. Thats why they maintain the prices.

There are still "affordable" flats in outlying areas, and for those that feel they will never get their CPF money back, why not just use it to buy one of these, since its just a number anyway. You can save on not having to pay cash for rentals, and use these cash to invest wisely as the stock markets are down and present a chance to get back in.

Play with the cards you are dealt with when you are born in Singapore. Don't just fold and accept it.

 

[twinseeker]

The solution is simple, but most s'poreans are simply too self centered or stupid to realise this. The solution is to stop buying HDB. If everyone instead of buying, were to live with their parents, or siblings, or rent, or do other things to avoid buying, within 2 years, the HDB will be brought to its knees. They will have no sales, and will eventually be forced to lower the HDB prices to an appropriately low level.

Boycotting HDB will not solve the problem. HDB anticipated the drop in sales, and so they introduced the built to order scheme. So, no matter how poor the sales, they still have the upper hand.

 

[silverfox@]

So far, I've not heard of people who're able to pay it off within 10yrs. While those who can afford it flocked towards condo & other landed properties.

Actually there are many people who sold off their private properties and pay off their resale HDB flat in full.

There are many HDB dwellers who are in fact private property downgraders. Downgrade not because of no money but because of its location, amenities and accessibility, and furthermore, no loans.

 

[silverfox@]

Oh no, I don't mean standardised prices. HDB will set the prices according to the location, transportation accessibility, demand and supply, and the number of shops in a central location, the area's crime rate and its proximity to an industrial area or jail(which lowers the price).

Thus a flat in Marine Parade will be different from a flat in Tuas.

But unlike a free market, where prices are set by the demand & supply of the market, with no central authority, in a monopoly where HDB is the main supplier and central authority, HDB will have to set an index of reasonable prices as according to the factors considered for each area, and then impose a maximum price quota to prevent any more increases for flats in each area.

The enforcement of such a quota will then be given to an Independent board for independent oversight so as to ensure that HDB doesn't abuse its position as the sole supplier of public housing. HDB would also be liable for any monetary damages if they mislead anyone- through the judiciary system.

Your idea don't seem bad, but every idea will have its own set of problems. Imagine with prices set by HDB, and considered with no huge gap in prices,

Banks will no longer get involved in the picture because a HDB flat is no longer deemed valuable in their eyes. Just remember that we can all say HDB flats are not assets. But if Banks are doing loans for HDB flats, you know they are not doing a losing business on it.

The abuse of HDB prices is not contributed by HDB alone. It's market forces controlled by every HDB dweller. Everyone wants to buy $180K, sell at $250K if they can. Who don't want. Would anyone be so foolish not to cash out at the opportunity?

If, now HDB starts to heed and control the price due to quota with its max cap, only the lower bracket would want a HDB flat because that is the choice to them. For the rest, they would no longer want to buy a HDB flat anymore. Many young couples in fact are buying up HDB flats, stay for 1st 5 years and then upgrade to condo but they rent out their HDB flats, with annual rental yield way more than purchasing a condo and renting it out.

Others think it is not an asset, but to these people, its a profitable investment for them.

 

[Porfirio Rubirosa]

Yes, but the PAP govt is to blame for the present situation by artificially inflating the price of the HDB flats for political reasons. Now it is going to be very difficult to unravel the prices without causing great pain to those already owning HDB flats.

There is going to be huge repercussions if prices are going to be reduced to those like subsidised by govt or even anywhere near that.

Who would want to stay in serangoon if toa payoh hdb flats are going to be the same price? .

The issue is what was the rationale behind the creation fo HDB in the first place? To create affordable flats for the average S'porean or to artificially inflate the price of the HDB flat for political reasons?

Present and future average S'poreans are now paying a heavy price for this PAP govt's 'public' housing policy. The big winners were those who enjoyed 2 bites of the direct HDB purchase policy during the low and boom time between 70s to mid 90s.

Btw if an individual has the $$$ to buy a private property, he/she should not be allowed to buy a HDB/govt flat in the first place save for those who initially met the low $$$ criteria and therefater made more $$$ after purchasing the HDB/govt flat so as to afford a private property. The PAP govt warped and distorted the initial HDB policy for political reasons and now the chicken's are coming home to roost.

Depreciation of houses due to lease and due to condition, wear and tear, etc.
Rental will drop heavily for flats. Everyone would not spend much on HDB flat, buy 1 and then keep the money to buy a 2nd home in the form of private property. A lot of people will start using the extra cash to buy private condos, propping up demand to such a state where its going to be a huge bubble.
When you have it, they want it too. What happens next would be the gulf in pricing between the private market and HDB. The rich would be even more rich as private market increase few folds while the poor and the middle class would widen further.

We wouldn't have this problem to start of with if Singapore was even half as big as Malaysia.

 

[Porfirio Rubirosa]

I don't think it is as simple as that, because you fail to take into consideration the negative effect this would have on the present owners of HDB flats. The political cost would be too big for the govt to take. In fact what the HDB may then do under those circumstances would be to put a freeze on building new HDB flats altogether.

The solution is simple, but most s'poreans are simply too self centered or stupid to realise this. The solution is to stop buying HDB. If everyone instead of buying, were to live with their parents, or siblings, or rent, or do other things to avoid buying, within 2 years, the HDB will be brought to its knees. They will have no sales, and will eventually be forced to lower the HDB prices to an appropriately low level.

 

[0939]

The trouble with Sporns now they love to stretch their loans. Their small heads want to wear big hats. Thats why HDB took advantage of these sinkie behaviors. They came up with
all sort of housing plans like 5-room I, 5-room NG, 5-room A, build n designs flats, Exec condo, HDB condo-like and so forth. That way they can increase the HDB flats. My father paid one time of $29,800 for his 4-room at Tg Pagar in 1979. Where else when I booked a 4-room flat from HDB in 1982, the selling price was at that time about $35,000. In 1985 when I got a new flat at Jurong, the price was raised to $ 65,000, citing cost of inflation blah blah blah. I took 10 years loan. Eventually selling for $200,000 in 1994. The price of HDB became stagnant from 1985 to 1990. If you can remember Chiam Tse Tong challenged HDB MP (who later committed suicide, sorry at this moment I could not recall his name) to offer him land and CST could build HDB at lower cost. It was never fulfill.
Why an asset will become a burden, if you take more than 25 years loan. Its all about interests. A lot of young couples fail to see this. They think their jobs will last forever.
The world now is different from my father's and my time in 80s. Those who bought flats in 1970s to early 1980s are lucky or you can said it is heavily subsidised, you take in term of Singapore have now become a developed country. What if Singapore never progress and be of the same as Johor now. I don't think my father's flat and mine will make a tidy profits. ( my father sold his flat for about $350,000 in 2000).
So my advice for young home owners to buy a smaller flat within 10 years loan, only when they are comfortable, they can upgrade. Sadly up to 70 per cent will not make
it if they buy HDB in excess of $500,000 flat and stretch their loans. Singapore soon will be a world class city with peasants' pay of 3rd world standard.

 

[silverfox@]

Yes, but the PAP govt is to blame for the present situation by artificially inflating the price of the HDB flats for political reasons. Now it is going to be very difficult to unravel the prices without causing great pain to those already owning HDB flats.

The issue is what was the rationale behind the creation fo HDB in the first place? To create affordable flats for the average S'porean or to artificially inflate the price of the HDB flat for political reasons?

Btw if an individual has the $$$ to buy a private property, he/she should not be allowed to buy a HDB/govt flat in the first place save for those who initially met the low $$$ criteria and therefater made more $$$ after purchasing the HDB/govt flat so as to afford a private property. The PAP govt warped and distorted the initial HDB policy for political reasons and now the chicken's are coming home to roost.

Actually I believed the system was created to let everyone be able to afford a shelter over their heads. That was how the initial scheme was borned.
But as time goes, its us humans who worked around the system to make it to our benefits.

It's how people changed the system :p

 

[silverfox@]

The trouble with Sporns now they love to stretch their loans. Their small heads want to wear big hats. Thats why HDB took advantage of these sinkie behaviors. They came up with
all sort of housing plans like 5-room I, 5-room NG, 5-room A, build n designs flats, Exec condo, HDB condo-like and so forth. That way they can increase the HDB flats. My father paid one time of $29,800 for his 4-room at Tg Pagar in 1979. Where else when I booked a 4-room flat from HDB in 1982, the selling price was at that time about $35,000. In 1985 when I got a new flat at Jurong, the price was raised to $ 65,000, citing cost of inflation blah blah blah. I took 10 years loan. Eventually selling for $200,000 in 1994. The price of HDB became stagnant from 1985 to 1990. If you can remember Chiam Tse Tong challenged HDB MP (who later committed suicide, sorry at this moment I could not recall his name) to offer him land and CST could build HDB at lower cost. It was never fulfill.
Why an asset will become a burden, if you take more than 25 years loan. Its all about interests. A lot of young couples fail to see this. They think their jobs will last forever.
The world now is different from my father's and my time in 80s. Those who bought flats in 1970s to early 1980s are lucky or you can said it is heavily subsidised, you take in term of Singapore have now become a developed country. What if Singapore never progress and be of the same as Johor now. I don't think my father's flat and mine will make a tidy profits. ( my father sold his flat for about $350,000 in 2000).
So my advice for young home owners to buy a smaller flat within 10 years loan, only when they are comfortable, they can upgrade. Sadly up to 70 per cent will not make
it if they buy HDB in excess of $500,000 flat and stretch their loans. Singapore soon will be a world class city with peasants' pay of 3rd world standard.

If there is an opportunity to sell your flat at 200K, but because of HDB caps, you can only sell at $100K. I think you would be pissed.


I would strongly advise all opposition not to take up the mantle to build HDB flats at lower costs. If its done and found that corners are cut, tofu houses build like china ones, the politician will be in super deep shit and not the contractor.
Sadly this is how the world works

 

[Porfirio Rubirosa]

No doubt this is part of the problem. However I think the bigger part of the problem is PAP govt's policy to artificially inflate the prices of HDB flats through the decades for political reasons. If the govt just kept the policy to strictly building affordable flats for average S'poreans period, I don't think you would see such a situation now. But of course neither you nor your father would have seen such a large increase in the value of your HDB flats bought in the 70s and 80s either.

The trouble with Sporns now they love to stretch their loans. Their small heads want to wear big hats. Thats why HDB took advantage of these sinkie behaviors. They came up with
all sort of housing plans like 5-room I, 5-room NG, 5-room A, build n designs flats, Exec condo, HDB condo-like and so forth. That way they can increase the HDB flats. My father paid one time of $29,800 for his 4-room at Tg Pagar in 1979. Where else when I booked a 4-room flat from HDB in 1982, the selling price was at that time about $35,000. In 1985 when I got a new flat at Jurong, the price was raised to $ 65,000, citing cost of inflation blah blah blah. I took 10 years loan. Eventually selling for $200,000 in 1994. The price of HDB became stagnant from 1985 to 1990. If you can remember Chiam Tse Tong challenged HDB MP (who later committed suicide, sorry at this moment I could not recall his name) to offer him land and CST could build HDB at lower cost. It was never fulfill.
Why an asset will become a burden, if you take more than 25 years loan. Its all about interests. A lot of young couples fail to see this. They think their jobs will last forever.
The world now is different from my father's and my time in 80s. Those who bought flats in 1970s to early 1980s are lucky or you can said it is heavily subsidised, you take in term of Singapore have now become a developed country. What if Singapore never progress and be of the same as Johor now. I don't think my father's flat and mine will make a tidy profits. ( my father sold his flat for about $350,000 in 2000).
So my advice for young home owners to buy a smaller flat within 10 years loan, only when they are comfortable, they can upgrade. Sadly up to 70 per cent will not make
it if they buy HDB in excess of $500,000 flat and stretch their loans. Singapore soon will be a world class city with peasants' pay of 3rd world standard.

 

[0939]

Actually there are many people who sold off their private properties and pay off their resale HDB flat in full.

There are many HDB dwellers who are in fact private property downgraders. Downgrade not because of no money but because of its location, amenities and accessibility, and furthermore, no loans.

Those are smart people, probably those previously could not qualify to buy HDB flats at that time. They sold their private properties or some benefitted from en-bloc sales. With extra money, they can have a golden retirements.
with one time pay-off, their HDB will always be an asset.

 

[Porfirio Rubirosa]

No. It is clear that it was the PAP govt who deliberately manipulated and changed the HDB policy from its original purpose for obvious political reasons.

Like I said in an earlier post, no doubt the earlier generation S'porean HDB owners by and larged gained by this change of policy, however as can be seen from what is going on today it is not working anymore. The chickens have finally come home to roost and the present average S'porean and future S'poreans are going to have to pay the heavy price.

Actually I believed the system was created to let everyone be able to afford a shelter over their heads. That was how the initial scheme was borned.
But as time goes, its us humans who worked around the system to make it to our benefits.

It's how people changed the system

 

[silverfox@]

No doubt this is part of the problem. However I think the bigger part of the problem is PAP govt's policy to artificially inflate the prices of HDB flats through the decades for political reasons. If the govt just kept the policy to strictly building affordable flats for average S'poreans period, I don't think you would see such a situation now. But of course neither you nor your father would have seen such a large increase in the value of your HDB flats bought in the 70s and 80s either.

Housing valuations are done by HDB panels of valuers.
In the past, valuation is done by valuers not from HDB panel of valuers.

What happens is valuation of the flats are artificially inflated by valuers, agents, house sellers, house buyers, in order to con more CPF money and cash. This is what we called going around the system for own benefits. Everyone wants to do it.

In the end, only valuation of flats can be done by HDB panel of valuers to prevent this collaboration.

Everyone just want to sell higher and higher. If the price is going to be lower, no one wants to sell their flat. People who wants that location will have to pay more for a resale flat around that area. It's a demand and supply issue. There is nothing to say if someone wants to pay $700K for a resale flat because that area no one wants to sell, can the govt or HDB step in and say, "hey you cannot do this because its not allowed?"

All these price increase are actually created by us, people. :o