How Is Owning an HDB Flat an Asset?

[2lanu]

2 years back, I was joking with my friend that why buy such expensive flat and left with no $$$ in the pocket? As if if no $$$ for food can take the bricks of the house and eat them Now we really see this happening.

Every boom time, there was this myth that land here is limited and price would shot up due to limited space here. Limited is what the developer and govt tell you in orde to jack price higher!

 

[silverfox@]

<style></style>First you should understand the basics.Rephrased its called the number game.Ever wonder why PAP is getting into businesses such as gambling,public transportation,public housing,NTUC and etc etc.And not selling Gucci or any other high end retailing ?......Simple! the first provides the numbers.The more the merrier.

That's how the HDB and its rental works.The large influx of foreign workers creates a huge demand for rental space.I mean cheaper rental space.That's where it becomes viable for people to invest in an HDB pigeon hole.

Sure,there were also a great number of influx of expatriates.But the number lies in the greater number of PRC workers who can only afford to pay between $150 to$250 per pax.And do not mind sharing with another 2 or so.This is the strength of owning an obscenely overpriced HDB.If you take this away.the prices of HDB must collapse.

You should recall a similar situation when the sudden influx of people from HK during the 90s spiraled the prices of HDB upwards.Particularly Hougang.Than the Hongkies speculated and dumped their HDB units and left the locals to pick up the pieces.Followed by negative asset value of HDB ownership.

Your view is based on room rental.
My view is based on tenants moving from private to hdb due to rising tenancy costs.
A lot of expats previously staying in condos switched to HDB flats as their rentals in condos, previously at $1600 cannot get them rental at condos when prices flew by more than 50%. So that is why their $1600 have to downgrade to renting HDB flats. Because that is the only viable option without busting their budget.

This was highlighted in many reports and surveys conducted. There were also many people complaining of the huge rise in their rentals that they have to downgrade renting HDB flats.

As for room rental, it applies to current hdb dwellers who wants to rent 1 or 2 bedrooms out. Their price is in lieu with the current market price. They derive that when they see a 3 bedroom can rent $1400, so a common room they can rent around $350.

Your case of a PR renting a private condo while renting out his HDB flat at same price, he would probably be renting a 2bedroom condo or a studio apartment. While his flat should be a 5 bedroom or mansionette.
If its not what I guessed, then he got a super cheap deal. Please let me know which condo he stays and I go rent a unit for my mistress to stay. :p

 

[suteerak1099]

There is another dimension here.While talking to an old timer who had raised nine children once told me.There is a world of difference between childhood growing up in a pent up housing and those growing up in a house with garden and lawn.Though not necessarily rich.

That is why the EQ level of a Malaysian Chinese who grew up in Malaysia who later are working here are way way high.Yah Yah yah,one would point out to our limited land space.But ah,look at the way HDB is built compared with a private aprtment .HDB goes all the way to create small cubicles so as to differenciate between 4 rooms and 5 rooms.And in some areas,the actual space of a 4 room is actually bigger than a 5 room.

The diffrenciation is necessary for PAP to jack up the prices.Just look at the amount of space outside a HDB that is wasted.

and they all come complete with a steel coffin big enough for the entire family to pack inside. in the event of war, it convenience them for mass burial.

 

[suteerak1099]

after doing my maths, i don't even dare to get married in Singapore

apparently the gov is still clueless y ppl arent making babies. they throw in packages after packages of nonsense that aren't even the solution to the problem. :o

 

[Porfirio Rubirosa]

That is why I said in an earlier post that "the chickens are finally coming home to roost".

Both HDB and CPF policies originally started off as good policies encouraged and promoted by the PAP govt. But as the years went by both these critical policies appear to have been politicised and morphed by the later PAP govts into possible time bombs.

the govt cannot reduce resale HDB prices since this would wipe out the collateral value of existing flats, effectively screwing people who for some reason or another (illness etc) can't pay their mortgage.

they can't price new HDB flats at near cost either, or else no one would buy resale HDB flats.

but constantly increasing prices is not a solution either... its merely passing the buck to the next generation and hoping the problem will go away. to be frank, there's nothing else they can do.

there will come a day when the problem will become too big to ignore and the social consequences will be catastrophic. we are already seeing young people refusing to get married and procreate simply because they cannot afford it. and taking on 25 or 30 year loans in one's mid twenties cannot be called prudent financial planning by any measure.

feel free to correct my understanding if i've got it wrong.

 

[Porfirio Rubirosa]

First wave were the Hongkies, after that the PAPs got hooked.

by letting in tons of foreigners to increase demand for flats... i guess.

 

[ahleebabasingaporethief]

First wave were the Hongkies, after that the PAPs got hooked.

WRONG!

The pappies got it wrong for 1997 HK handover to China.

They anticipated 500,000 HKers coming to live here. Only 80,000 came. After 12 months, 60,000 went back. Today, less than 2000 HKers left here.

No HKer worth his/her weight in salt will come to a country like S'pore. They are free spirited people and on the average smarter than our dear leaders.

That is why HDB was left with huge surplus in flats the last 10 years.

That is why ministar HAIRDO LIM was removed to be replaced by short arse Tatoo.

that is why they let in all the Ah Neis from hell into the country to fill up HDB flats. Also the PRCs.

 

[zhihau]

apparently the gov is still clueless y ppl arent making babies. they throw in packages after packages of nonsense that aren't even the solution to the problem. :o

i think they know, why else do you think there's an increase in the number of FT around us? you've been to the ICA to look at the PR/Citizenship applications? look at the relaxation of laws when FTs/PRs are allowed to purchase private property and even resale HDBs. it seems to me they are trying very hard to plug the holes...

 

[whoami]

They anticipated 500,000 HKers coming to live here. Only 80,000 came. After 12 months, 60,000 went back. Today, less than 2000 HKers left here.

Dread to think if the same scenario would happen again only this time PRC and tamby pack their bags and go back Motherland. HDB flat prices sure COLLAPSE!

 

[The_Latest_H]

That is why I said in an earlier post that "the chickens are finally coming home to roost".

Both HDB and CPF policies originally started off as good policies encouraged and promoted by the PAP govt. But as the years went by both these critical policies appear to have been politicised and morphed by the later PAP govts into possible time bombs.

Can S'pore afford a Paul Volcker-style clamp on runaway inflation that Volcker did during the 80s? That created a recession because of the downfall in demand of goods, but that also led to an upturn later because inflation was clamped down completely, thus reducing prices of goods and services during that time.

It may come to pass that such a tough action reminiscent of what Volcker did as Fed chairman has to be considered in S'pore, where there's unofficial runaway inflation as a result of an economic bubble- due to speculation and overpricing.

 

[ahleebabasingaporethief]

Dread to think if the same scenario would happen again only this time PRC and tamby pack their bags and go back Motherland. HDB flat prices sure COLLAPSE!

Mainly Ah Neis, Philiphinos, Burmese

 

[zhihau]

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.

how can you forget the late Mr. Teh Cheang Wan???