1995-6 period got ppl bought bishan HDB Executive flat for S$1 Million.
Toh Yi drive, got ppl offer 850K for my dad's 2nd flr exec flat. Lucky my dad never sell to him, else they can also jia ga gi.
But we manage to sell at 505K a few years down the road, we lugi but at least save the other person's ass.
I'm wondering how are the poor souls doing right now...those who bought at sk high prices. Feel sad for them though.
You could work out the cost psf if you really wanted to but as a rule of thumb developers want a 40% profit min when they build a condo
The price is as it should be market driven.
Find some land that sold in your area get the psf divide the number of units over the land area drop the 40% and see whats left.
No direct HDB land value... but here's a couple of comparision.
The above statement was made out of jest and to provide some humour as seen with the use of the internet smilie and have no solid backing whatsoever to the statement made.
You agree that by reading that statement you will not hold me or ClubSNAP liable for any loss, damages or injuries caused either directly or indirectly as a result of reading or using the above statement in this post.
Last edited by yanyewkay; 3rd November 2006 at 05:47 PM.
“How fortunate for leaders that men do not think.” - Adolf Hitler
Something no one brought up..
para 26... car park... left pocket -> right pocket... but still kena.
So what? HDB doesn't sell flats at $500k, it's resellers. Nobody forced you to buy the HDB flat to begin with.
In fact, nobody forced you to live in Singapore, you can migrate to Australia if you want and get a big house for $500k.
So if you don't want to be in debt for the next 25 years-- simple, don't buy.
Did you expect the govt to give you 5-room flats for $10k? Or bungalows for $500k?
Even if they could (and we supposedly can, since we have so much national reserves)-- why should the govt do that? Are you entitled to it simply because you voted P A P?
If you expect HDB to be a money-losing organisation, you're in the wrong country.
The cost of building a flat is typically not the highest component of the total cost, esp. if the flat is very tall. Construction is not that expensive, once you build so many units, there's economies of scale.
Any property agent will tell you the cost of a property depends mainly on location. In other words, if you're harping on how much HDB flats cost to build, you're looking at the wrong aspect of the cost.
Now, the question is, how much does HDB pay for land vs how much private developers pay. And how much profit should HDB make vs how much a private developer makes. Should HDB make profit at all?
1. Should HDB sell at flats at the cost of construction? Of course not, then HDB will be losing money if it has to pay for land. In the long run, HDB will go bankrupt.
2. Should HDB sell flats at the cost of construction + cost of acquiring the land + its own overheads? In other words, just cover cost.
That depends on whether you believe HDB should be a non-profit organisation. While it sounds good, if HDB does this, it could "spoil" market and bring down a lot of property prices, both HDB and condos. It could also create huge queues at HDB as people want to strike lottery rather than buy resale.
3. Should HDB sell flats at below market cost (ie compare to resale market) but still make a profit from selling the flats?
I think that's what people are unhappy. That govt makes money from people. But you have to realise, if HDB don't make the $$, then the balloters will. And if HDB sells too cheap, then guess what?-- everyone will want to ballot, as a result the demand for resale flats will come down, then the resellers will also suffer.
So which scenario you want? Of course, I know the best is HDB sell you at $100k and you sell to the market at $500k.
Do you think that is sustainable, even assuming that it costs $100k to build a flat? Who will be so stupid to pay $500k if they can queue and get a flat for $100k?
I've come to treat HDB as just another developer. I don't expect favours from them. Yes, their flats are cheaper than resale, but not that much cheaper. The so-called subsidy is really a discount from the resale price rather than a true subsidy (which would cash paid out of govt pockets). $ for $, their flats are cheaper but not as good as condos. Quality, finish, etc. are not as good. They got racial quotas, stupid restrictions, etc. You decide whether you want them.
HDB mission is to provide affordable housing, but does not mean that they cannot make profit, esp from selling bigger flats. This mission is fulfilled through providing low rental flats for those in need, providing cheap housing loans, etc.
Last edited by waileong; 3rd November 2006 at 06:25 PM.
It's very simple. MBT don't want to say how much profit HDB makes. He only say that they have a deficit. Note he didn't say "loss" which would be the usual term that is the opposite of "profit".
Deficit seems to imply that HDB collected $530M less each year than it should have simply because it sold them below resale prices.
They don't want to answer because it's politically sensitive.
But again I ask-- so what? You voted this party, they form the govt, now they run HDB in this way. You don't want them to run HDB in this way-- don't vote this party, don't let them form the govt.
But I think that it is highly difficult for HDB to sell a flat for $100k if the market price is $500k. If so, then (a) HDB will have overwhelming demand; (b) resale flats will have much less demand. And simple economics then tells us that will tend to knock down the price of resale flats (assuming HDB doesn't increase prices due to higher demand) so as to reach an equilibrium.
Which means the resale price will drop from $500k to whatever premium people feel is fair for a resale flat bearing in mind they can queue and ballot for an HDB flat at $100k.
You can't run away from economics.
Last edited by waileong; 3rd November 2006 at 09:00 PM.