How Is Owning an HDB Flat an Asset?

[lifeafter41]

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.

"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".

That is the crux of the whole discussion.

 

[0939]

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.

HDB will never lower their price. There is one flat in Taman Jurong where one 5-room build and design block had only two occupants for the past ten years.
A block only two famlies shared, that was about 4 years ago when I heard of it. Why no new occupants because the price never come down.

Papsmearer, 65 per cent will not think your way. What if Sporns all boycott buying HDB like what you said. Our Govt is not stupid, worst come to worst,
If I am the Govt, I will sell it to FTs New HDB with 20 per cent surcharge. Its all about money and cents.

 

[silverfox@]

If I am the Govt, I will sell it to FTs New HDB with 20 per cent surcharge. Its all about money and cents.

There are 2 ways to look at this.
In fact many PRs have bought flats paying loads of cash. This is one factor which contributes to demand of HDB flats making prices went up.

If to stop this spiral, HDB should prevent PRs from buying flats. However another set of problems come up again. PRs not able to buy have to resort to renting. HDB owners knowing that their flats are in demand for rental will also want to charge high rental knowing these PRs can't buy and have no where to stay except to rent. High rental is actually pegged to prices of sales. It's relative.

With or without, these problems will arise.

 

[silverfox@]

Papsmearer, 65 per cent will not think your way. What if Sporns all boycott buying HDB like what you said. Our Govt is not stupid, worst come to worst,
If I am the Govt, I will sell it to FTs New HDB with 20 per cent surcharge. Its all about money and cents.

Let's say everyone gets to the consensus and don't buy HDB. All stay at beach, public areas. Who can take it, there are many others with old folks and kids.
Who would rather let them suffer or to pay for it?

 

[Porfirio Rubirosa]

You forgot ONE critical factor. PAP govt sets the direct sale price of all HDB flats.

So again I say ultimately this PAP govt is to blame for the present situation. Again I ask what was the original purpose behind HDB and why did HDV change its policy along the way?

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

 

[Porfirio Rubirosa]

That is the resale market.

What about the direct HDB market?

There are 2 ways to look at this.
In fact many PRs have bought flats paying loads of cash. This is one factor which contributes to demand of HDB flats making prices went up.

If to stop this spiral, HDB should prevent PRs from buying flats. However another set of problems come up again. PRs not able to buy have to resort to renting. HDB owners knowing that their flats are in demand for rental will also want to charge high rental knowing these PRs can't buy and have no where to stay except to rent. High rental is actually pegged to prices of sales. It's relative.

With or without, these problems will arise.

 

[sleaguepunter]

Actually the current resale HDB price are being pop up by FT/PR buying power. Nowaday can see many angmo in HDB estate, many of them are PRs here with their families. Of course the biggest lot are the PRCs and Indians with many taken over flats in the oppostion ward of Hougang as it cheap compare to AMK or the old Changsan estate. The eRection may not be easy to LTK.

IMHO, most of the fault remain in the hands of the residents. If there are young couple willing to pay $ 385k for a 30yo 4room flat on a 30yo loan term, how can blame the govt. KNN, freaking no brain, by the time finish paying could end up paying $ 700k inclusive of interest. And the person who was my stupid cousin still think he got it at a bargain. Really dont understand why he refused to wait for a BTO. Not as if the wife-to-be is pregnant.

For my own case, i kenna "first price" so cannot wait and had to buy urgently in time for my first issue to received his BC. Even then, i quickly went to HDB to "top up" to reduce my outstanding loan from a 25yo loan to 11yo. Now only left abt $60k and another 7yrs to go. It very important to shorten the loan period as the first few years the interest is quite subtantial. I was paying the same amount of interest as my principal. ie if my loan was $600 per month, only $300 will go to pay the principal amount while the other $300 was the interest.

Buyers shd open their eyes big big went they quote an amount. The 2.6% is cummulative which will end up paying a lot as interest.

 

[scroobal]

Let's say everyone gets to the consensus and don't buy HDB. All stay at beach, public areas. Who can take it, there are many others with old folks and kids.
Who would rather let them suffer or to pay for it?

Your approach and arguments are based on affordable public housing that you see in developed and progressive countries. HDB under the PAP took on that route initially. Things have changed since.

HDB and the entire public housing is now a very important political tool. Too important for market forces or social issues to take over. PAP votes come from the heartland and they are able to tweak things better under HDB rather than outside. Grassroots, town councils, racial quotas, precint monitoring, demographic planning all have political connotations that cannot be ignored. PAP Kindergartens, Old Folks clubs, Trade union offices are now well and truly anchored in HDB run premises.

In the first 2 decades, it was said that the "Rental Control Act" kept the PAP in power. It is now HDB.

 

[tonychat]

Owning an HDB Flat an Asset?

To a sinkie, it is an asset no matter what, even he needs to be screwed in order to own it.

 

[clinton666]

To a sinkie, it is an asset no matter what, even he needs to be screwed in order to own it.

Your cheap Thai whore wife is definitely an asset cause her CB can help to feed you.

 

[The_Latest_H]

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.

1. Of course, but on the flip side, all these are based on self-interest, and paper wealth. And paper wealth is just paper wealth. And a lot more people have become greedy in using paper wealth to borrow massive amounts of money which they can't afford.

Reducing inflated prices and by large, one of the big contributors to overall inflation while will hurt ordinary people short term will help the country long term. Now we are just becoming like Americans, with no real savings(outside of CPF). Instead we are just spending because we want to, and because the government is forcing us to.

2. I think, with the banks, there must be some kind of private-public partnership to help deal with this. We don't want the banks to shut up shop locally and move to other countries. As such, if we are to hash out a solution, then the banks will have a place at the place as well.

3. As long as these people do not violate the rules of the contract they have signed with HDB- in some cases, these rules may be relaxed- they can continue with such activities. But again, all these rental rates must be within a reasonable band of rates. They cannot be too low nor too high.

That's why in some HDB areas, there will be different standards of rental rates that prices can vary.

 

[silverfox@]

1. Of course, but on the flip side, all these are based on self-interest, and paper wealth. And paper wealth is just paper wealth. And a lot more people have become greedy in using paper wealth to borrow massive amounts of money which they can't afford.

Reducing inflated prices and by large, one of the big contributors to overall inflation while will hurt ordinary people short term will help the country long term. Now we are just becoming like Americans, with no real savings(outside of CPF). Instead we are just spending because we want to, and because the government is forcing us to.

2. I think, with the banks, there must be some kind of private-public partnership to help deal with this. We don't want the banks to shut up shop locally and move to other countries. As such, if we are to hash out a solution, then the banks will have a place at the place as well.

3. As long as these people do not violate the rules of the contract they have signed with HDB- in some cases, these rules may be relaxed- they can continue with such activities. But again, all these rental rates must be within a reasonable band of rates. They cannot be too low nor too high.

Bro,
if you see, the main points pointed by you are rather valid, and most of these happenings stem from human greed.

Banks don't do business which do not make profit for them. They try to milk every single cent out if possible. This is the Bank that we should all know. If valuations are pegged, and prices are low to such an extent, even now Banks are not keen if you just want to take a 100K to 200K loan. They deemed it too low or too low profit for them to lift a finger. Only Hong Leong finance do such kind of chup-pa-lang loans or do loan to people who basically do not qualify. Even if you want to buy a property in Geylang, the banks don't want your business, only Hong Leong. :p

Also when you read the property boom last year, a lot of tenants could not afford high rental on condos and they shifted their attention to HDB flats which are much cheaper than condos. Suddenly demand surge and HDB owners start to make use of this opportunity to up their price of their "asset"
HDB flats rented out for $2000+ or even close to $2K.

And the rental yield is a whopping >4.8% which is even higher than what some private condos are getting. Quite a lot profit out of this situation. :o

 

[ahbengsong]

You forgot ONE critical factor. PAP govt sets the direct sale price of all HDB flats.
So again I say ultimately this PAP govt is to blame for the present situation. Again I ask what was the original purpose behind HDB and why did HDV change its policy along the way?

original purpose is affordable public housing...

changed purpose is greed, greed and more greed from the pap... money to remain in power... money to buy loyalty... that's the pap today...

 

[Nice-Gook]

t?

Reminds me of PATEK PHILLIPE's ad:

"You do not own a Patek Phillipe. You merely look after it for the next generation".........in HDB's case....."for our leaders" [/color]

I share your sentiments with a qualification.Property ,if owned,also can be be looked after for the next generation.But NOT a HDB pigeon hole.Not if the gahman can forcefully acquire any HDB under SERS.

If you care to notice ,no prime property where HDB sits is left untouched.It is acquired under some pretext.Than it is left vacant for at least 7 years.Perhaps for legality or 'out of mind' situation.Than sold for huge profits.The "Pinacle" at Duxton is one example where once it housed only 3 roomers who were all forcefully evacuted.None,I mean none of these so called ex-owners had benefited by the obscenely priced HDB built in the same site now called the "Pinacle@ Duxton.

 

[Nice-Gook]

HDB will never lower their price. There is one flat in Taman Jurong where one 5-room build and design block had only two occupants for the past ten years.
A block only two famlies shared, that was about 4 years ago when I heard of it. Why no new occupants because the price never come down.

.

That is simply because PAP holds plenty of people's monies with no accountability.Our scholar boys rather sit pretty on their fat ass not having to make a decision than risk their neck making a decision.

Things cannot operate in the same way in a private enterprise.TIME IS MONEY.

I also come across a lot of gahman owned properties other than HDB left vacant for years and years for the very same reason.There is NO such thing as an opportunity cost in our civil service.

 

[Nice-Gook]

Actually the current resale HDB price are being pop up by FT/PR buying power.
.

This is absolutley true.If you take away the rental component paid by FT/PR for a HDB hole.It does not make any sense to invest in a HDB as a property.

I spoke to an old time developer here.He says its because each PRC sharing a room paying about $250 each with 3 or 4 sharing a room owning a HDB makes any sense at all.And this is where a better built rooms in a private apartment cannot compete.Since the proximity to food and transport is critical to such wage earners.

Even than these PRCs who earn less than $1200/ a month are not happy since the renbembi against singapore dollars had gone up lately.And less money to remit back to China.

Thinga are not that rosy for HDB rental market now.

 

[2lanu]

If you care to notice ,no prime property where HDB sits is left untouched.It is acquired under some pretext.Than it is left vacant for at least 7 years.Perhaps for legality or 'out of mind' situation.Than sold for huge profits.The "Pinacle" at Duxton is one example where once it housed only 3 roomers who were all forcefully evacuted.None,I mean none of these so called ex-owners had benefited by the obscenely priced HDB built in the same site now called the "Pinacle@ Duxton.

I got a relative who got evacuted in early 80s from Serangoon area to Tampines. After 25+ years. The land is still there and white scum just locked up at the main road.

 

[silverfox@]

This is absolutley true.If you take away the rental component paid by FT/PR for a HDB hole.It does not make any sense to invest in a HDB as a property.

I spoke to an old time developer here.He says its because each PRC sharing a room paying about $250 each with 3 or 4 sharing a room owning a HDB makes any sense at all.And this is where a better built rooms in a private apartment cannot compete.Since the proximity to food and transport is critical to such wage earners.

Even than these PRCs who earn less than $1200/ a month are not happy since the renbembi against singapore dollars had gone up lately.And less money to remit back to China.

Thinga are not that rosy for HDB rental market now.

This is not the main reason why HDB rental is not as good as that during the peak. It is because private rentals are coming down as the property demand has cooled. More units are coming out as they are going to TOP. Private rentals coming down, those who have been staying private moving to HDB will switch back slowly to private market. This vacuum will create lowering rents for HDB. It is also this influx of tenants previously that created a surge in HDB rents.

 

[eQuipment]

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.

private property owners who downgrade to HDB, of cos there are. but that only make up how many % of singaporeans? maybe less than 5%? many private property owners would rather sell or lease their landed property, and live comfortably in condo. so if anything happens, they can liquidate & shift their funds quickly. if they went for HDB, they'd be stuck for 5yrs (bound by the T&C)

 

[eQuipment]

...................... 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.

the ppl today aren't really that stupid, the home is a place to rest, it need not be too big, so can play hide & seek or catching inside the house. young couples with not much cash in hand also do their math before buying HDB.

the optimal choice is to go for a decent 3rm flat, so they need not stretch themselves too much for the loans, n can save more cash for children upbringing & education after some yrs.

but now, combined income of more than 4K means they die die must buy 4rm or above. which means, ppl kena forced to stretch their loans to more than 10yrs. those who marginally exceed the 4k limit have to subject themselves to more yrs of loan, 20yrs or maybe 25yrs. so, the problem just snowball from there.