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Thread: What is the actual cost of a HDB flat?

  1. #101
    Senior Member melvin's Avatar
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    Default Re: What is the actual cost of a HDB flat?

    Quote Originally Posted by CYRN View Post
    It would be beta if u do not compared wif land zone for commercial as it always the highest!

    As for private there r also tenure to take into consideration!

    Simply cant compare! Sorry!
    Last edited by melvin; 3rd November 2006 at 06:39 PM.

  2. #102

    Default Re: What is the actual cost of a HDB flat?

    Quote Originally Posted by melvin View Post
    It would be beta if u do not compared wif land zone for commercial as it always the highest!

    As for private there r also tenure to take into consideration!

    Simply cant compare! Sorry!
    Can't find any HDB annual accounts leh... that should give the best perspective...cost wise.

    But the closest is DBSS or EC land price in the second link... for residential developments.
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  3. #103

    Default Re: What is the actual cost of a HBD flat?

    Quote Originally Posted by waileong View Post
    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 $400k 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.

    Nevermind... found the answer liao... but still http://www.parliament.gov.sg/parlweb...3_T0001.html#1

    secondly... for new HDB pricing, economics of supply and demand isn't the main motive... if you read this lengthy report..

    lastly...voting in a govt doesn't means AUTOMATICALLY accepting everything the govt does... no one is perfect and there's always room for improvements.
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  4. #104
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    Default Re: What is the actual cost of a HBD flat?

    Quote Originally Posted by melvin View Post
    Nowadays also nt easy to gt HDB LOAN!!!
    From 1 jan 2007 onwards (like wif immediate effect) applying of HDB loan would be the same procedure as applying for bank loan.

    HDB will require all potential flat buyers and transferees who wish to get an HDB concessionary loan to first obtain an HDB Loan Eligibility (HLE) letter. This HLE letter must be obtained before committing to the purchase or transfer of a flat. This will provide prior information on your loan eligibility quantum and monthly instalment to ensure you are able to pay for your home and service the loan without overstretching your finances.


    The HDB Loan Eligibility Letter (HLE) will give an indication of the loan you are eligible for but the final or NET loan that is given will depend on HDB's prevailing conditions governing the granting of loans such as the loan ceiling of 90% of selling price or value of the flat, and the amount of CPF in your ordinary account.


    HDB will work out the financial plan for your net loan at the point of (a) selecting a new flat for purchase of a new flat, (b) first appointment for purchase of a resale flat or (c) processing your application for transfer of an existing flat. You can also use the online services at Sales Financial Plan and Resale Financial Plan to do an estimate of the final or NET loan amount once you have determined your loan eligibility.
    erm, I don't see what's so hard about this HLE.

    Or would you prefer the previous situation where buyers get to pay the option fee, pay the deposit, and then find out from HDB that they don't qualify for a loan, or that the loan amount is not up to what they expect, with the end result that they have to lapse the option and lose the option fee?

  5. #105

    Default Re: What is the actual cost of a HBD flat?

    If you believe what they say in Parliament, you believe everything...


    Quote Originally Posted by CYRN View Post
    secondly... for new HDB pricing, economics of supply and demand isn't the main motive... if you read this lengthy report..

    lastly...voting in a govt doesn't means AUTOMATICALLY accepting everything the govt does... no one is perfect and there's always room for improvements.

  6. #106

    Default Re: What is the actual cost of a HDB flat?

    points well put across waileong !!

  7. #107

    Default Re: What is the actual cost of a HBD flat?

    Quote Originally Posted by CreaXion View Post
    To be on the fair side, think abt it in this way.


    3. Some pp argue that Govt has to earn money from pp to sustain the ministers pay. Think of it in this way. Singapore Ministers and high officials has high pay so dun need to be corrupt. Other countries (dun need to mention what countries hah) low pay so corruption exist. Biz men who came in from overseas to Singapore know exact cost. Can calculate cut loss pt or expenditure. Biz men go other countries lost money also dunno why die.

    4. Some pp also say why ministers must have high pay. They are serving the pp. Difference of opinions. I actually supports the view that ministers shd get pay like CEO. Afterall, Singapore is like a big MNC. Singapore if I am correct is the top 20 richest country in the world. That itself is a super big achievement considering the size of Singapore and lack of natural resources.



    Last thing is a disclaimer cause my whole yr is till very much lesser than a minister pay.
    Gosh, I guess the issue of ministeral pay always stirs up some emotions in me.

    Drawing on the analogy that they run the country as an MNC and thus should be paid as the CEOs they are; then are the citizens analogous to its employees or stakeholders? Guess we are the employees- "not happy? quit (migrate) if you can afford it".Because if we are actually stakeholders, the CEOs are obliged to be more transparent to us in their operations.
    To pay them highly so that they would not be corrupt is as someone famously put in, just another form of legalised corruption.

    http://groups.yahoo.com/group/Sg_Rev...ssage/2428?l=1

    On the issue of HDB being non-transparent in the issue of cost. Let me try to recap what happened during the run-in to the recent election, fellow forumers, do correct me if I give a wrong account.

    Edmund Ng (SDA) claimed that a $250 K flat could be built for $70K, Mah BT then challenged Ng to back up his claims with a quotation. However, when Ng did "take up the challenge" and asked HDB for contractor details, Mah replied that there was no need for the HDB to "entertain Ng with any figures".

    http://totallyconfused.blogspot.com/...d_archive.html

    You guys draw your own conclusions, but personally, I thought a chance to come clean and account to the voters was (deliberately?) passed over.

    Singapore MAY be the top 20 in GDP, best airport, highest container volume, etc. but the idealist in me say that we should try gauging our HAPPINESS index, we will be nowhere near the top. Iím sure there will be replies saying that there will be HAPPINES with wealth, thatís the value we are (unfortunately) handing down the generations.

    If my posting seemed harsh to the post I quoted, it was more of unhappiness to the situation of govt. transparency , and not the poster personally. Peace.

  8. #108

    Default Re: What is the actual cost of a HBD flat?

    Quote Originally Posted by waileong View Post
    If you believe what they say in Parliament, you believe everything...
    At least those figures are supported statistically... can you refute it?

    But I know where you are coming from, statistics might not be a true reflection.

    But the litmus test to this is the ability to use one's CPF to pay your housing loan without resorting to the need to top up... since (if you convinently ignore the employer's contrubution ) you are contributing about 20% of your pay to it. *Do note that it means 20% of household income.

    *edit* And I think figures are correct that 80%-90% of Sg population can afford a 3-rm flat...however the catch is that there aint' so many 3-rm flat built..so back to square one..gotta buy 4 rooms or 5 rooms.
    Last edited by CYRN; 3rd November 2006 at 10:12 PM.
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  9. #109

    Default Re: What is the actual cost of a HBD flat?

    Quote Originally Posted by ahbian View Post

    On the issue of HDB being non-transparent in the issue of cost. Let me try to recap what happened during the run-in to the recent election, fellow forumers, do correct me if I give a wrong account.

    Edmund Ng (SDA) claimed that a $250 K flat could be built for $70K, Mah BT then challenged Ng to back up his claims with a quotation. However, when Ng did "take up the challenge" and asked HDB for contractor details, Mah replied that there was no need for the HDB to "entertain Ng with any figures".

    http://totallyconfused.blogspot.com/...d_archive.html

    You guys draw your own conclusions, but personally, I thought a chance to come clean and account to the voters was (deliberately?) passed over.

    In parliament I read that Mr Mah mentioned the cost is in the annual HDB account report... however, I can't find it on the net anywhere.

    *edit* to add on, there are $$$ for land for carparks, playgrounds, parks..etc. estimates for land prices are posted below. I'm sure Mr Ng also convinently left out of his calculations.
    Last edited by CYRN; 3rd November 2006 at 10:38 PM.
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  10. #110

    Default Re: What is the actual cost of a HDB flat?

    Dear Waileong:

    I have read your posts, and have noted your stand point of HDB should sell its flats at market price. However, this not a simple case of determining the flat transaction price, based purely on supply and demand.

    Can I first identify with you that HDB is public service body and its mission is to supply and provide affordable housing to the people?
    What most of us (commoners) are asking is not for HDB to sell flat below the cost, but to sell it a reasonable price that can be sustained over generations. There are a lot of reports on people facing negative equity and suffering from asset rich but cash poor syndrome.
    I foresee that when this generation of people goes into retirement, the property bubble will burst, because these folks will have to sell their properties to finance their retirement.
    So, should we starts looking into this problem and find the softest solution?

    You mentioned that the reselling price in Marine Parade is $500K.
    I belief this is one case off, and we canít simply use this transacted price to determine the market reselling price. This case could be one of those cash back transaction. The buyers and seller purposely jack up the selling price to get a bigger loan.

    Public housing is unlike Condos and bungalows, the former is a basic necessity and the later is a luxury item. When we apply economic principle here, we say that Public housing is inelastic. Meaning that even the price is unreasonable, we (commoner) will still have to buy and absorb most of the burden. So can you see that is not basic supply and demand?

    Secondly, Public housing is a highly, if not a completely monopolized market. Seller calls the shot and they in turn control the resell market. For example, when I sell a new flat at 150k, the resell flat will automatically be transacted at 190k because of the 40k subsidy. When I push up the price of a new flat to 200k, it is not hard to guess the price of the resell flat, isnít it? So who is the one controlling the price?

    If supply and demand really applies in Singapore public housing, I would have expected the prices of those units in Jurong Extension to come crashing down. After completion for more than 5 years, most of the units are still empty. Taking into consideration the effect of depreciation and the flats have a limited life of 95 years left, what should be the selling price now? Again, this shows that the market is highly regulated.

    Now it is about breaking this sticky price problem, Lets try to work it out here.
    It is not nice to suggest migration because I belong to this land and my root is here.
    Also those who can afford to migrate, have left and more will be leaving.
    Those who are poor, like me, are waiting to cross the bridge when life no longer permits us to stay.
    Last edited by Silence Sky; 3rd November 2006 at 10:27 PM.

  11. #111

    Default Re: What is the actual cost of a HBD flat?

    Quote Originally Posted by CYRN View Post
    In parliament I read that Mr Mah mentioned the cost is in the annual HDB account report... however, I can't find it on the net anywhere.

    *edit* to add on, there are $$$ for land for carparks, playgrounds, parks..etc. estimates for land prices are posted below. I'm sure Mr Ng also convinently left out of his calculations.
    yes, i agree, and I believe that his estimates are at the low end, perhaps one-room or two-room.

    My point was on the dismissive attitude of Mah BT when he could have step up and quash all rumours.

    Edmund Ng aside, many other Singaporeans deserve better than these vague and evasive replies by Mah BT.

  12. #112

    Default Re: What is the actual cost of a HBD flat?

    Quote Originally Posted by ahbian View Post
    yes, i agree, and I believe that his estimates are at the low end, perhaps one-room or two-room.

    My point was on the dismissive attitude of Mah BT when he could have step up and quash all rumours.

    Edmund Ng aside, many other Singaporeans deserve better than these vague and evasive replies by Mah BT.
    I doub't Mr Mah can answer satifactory without putting SLA in the spot.
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  13. #113
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    Default Re: What is the actual cost of a HDB flat?

    Quote Originally Posted by Silence Sky View Post
    Dear Waileong:

    Public housing is unlike Condos and bungalows, the former is a basic necessity and the later is a luxury item. When we apply economic principle here, we say that Public housing is inelastic. Meaning that even the price is unreasonable, we (commoner) will still have to buy and absorb most of the burden. So can you see that is not basic supply and demand?

    Secondly, Public housing is a highly, if not a completely monopolized market. Seller calls the shot and they in turn control the resell market. For example, when I sell a new flat at 150k, the resell flat will automatically be transacted at 190k because of the 40k subsidy. When I push up the price of a new flat to 200k, it is not hard to guess the price of the resell flat, isnít it? So who is the one controlling the price?
    totally agree with you silence. the way i think of it is pretty simplistic:
    1. Singapore land space very little, land price very high if u want private.
    2. Gahmen control all the land
    3. Gahmen builds flats on the land. Acquires the land at virtually zero cost. Even if they say so, its from their left pocket to their right pocket.
    4. Even though cost of actual flat cheap cheap, cost of land virtually zero, gahmen still sell flat to people at tremendously high cost versus actual land cost + small cost of building individual flat.
    5. People not happy lor.

    So the reason we're not happy is that is that the method the gahmen is using to control speculation (by allowing flats to go at market prices) is basically at an exorbitant profit compared to the actual cost (land=0 + building cost) that the gahmen actually expended producing the flat. They basically control the land for free, just because, our forefathers elected them. haha.

    all this is good and well in the resale market. if u want to upgrade, you've got to pay a premium because all these factors will always be pegged to the prevailing private market. furthermore the gahmen monopoly has kept the prices at a fairly reasonable rate pegged to private, so not so bad.

    if you're earning enough and doing well for yourself this won't really pose a problem. Problem arises for quite alot of us including myself, which are first time flat buyers and the needy. Rebate for sure is "peanuts" compared to actual amt that gahmen is making. Needy is often forced to rent flat because cannot pay deposit, get loan etc. In the end live from hand to mouth and no property ownership even tho pay like mad for rent.

    bottomline is that these 2 groups need more help. the gahmen is financially able to give steep discounts for them. and they are likely to be receptive to stricter rules with regards to their flats and subsequent resale in exchange for greater financial aid. but so it seems the gahmen isn't really interested in making concessions.

    and i haven't even started on all the poor guys caught in the market crash man...sigh...will be getting my first flat sooner than i think...so much to think about

  14. #114

    Default Re: What is the actual cost of a HDB flat?

    Consider it a blessing to have a roof over (almost) everyone's head, but a curse to be perpectually paying for one.

    Once, there was a cleaner who changed from 4BR to 3br since the 4br was in huge demand at that time. I warned him before the transaction to really go calculate the monthly installment part with the hdb officer. He ignored me totally as he was quite attracted by the small gain from sale of flat. But after the transaction, due to his existing high loan and other requirements (tariffs) towards the sale, not only he did he lived in a smaller flat, he ended up paying more for the monthly installment for his resale 3br flat. He was living hand to mouth before the purchase; after the purhcase, he was devastated as he needed to top up cash for the difference monthly.

    So for those who wants an upgrade/downgrade, do not just follow the herd. Some have wings and they can leap off the cliff. For some others, they fall right into the swamp and struggle through life, hardly making ends meet.

    Is the cost of hdb excessively inflated? Yes.
    Who are the culprits? Market forces (and the media).
    But can we help it? No, our arms not long enough to reach the height of the tall ladder.
    What can we do? Work harder & live more meaningfully.
    And also... pray we win toto some day

  15. #115

    Default Re: What is the actual cost of a HDB flat?

    1. I never said HDB should sell at market price. I said HDB should sell at below market price, but not that much below that it would cause the resale flat prices to come crashing down.

    2. Supply and demand applies everywhere, even for HDB. Why did the Tampines designer flats have so many applicants despite the high price? Why are Jurong West extension flats empty? The former, because of demand. The latter, because HDB (unfortunately) is not that market oriented, so they refused to cut prices enough to move the flats.

    The demand curve is not always linear. For some products, demand is so weak that no matter what you do, no one will buy. Hence companies have to write off inventories from time to time.

    3. I don't believe in HDB's mission any more. In the early years, to help people move from kampong to city, yes. Nowadays, with designer flats, etc? To me they are just another housing developer with a side mission of making housing more "affordable". As far as MBT is concerned, "affordable" just means that your monthly instalments are less than 40% of your household income.

    4. I still don't think HDB can sell flats at (say) $100k if the resale price is $400k. That would cause the market to crash. The govt would be using its powers unjustly to acquire land cheaply and sell flats cheaply. It would be unfair competition to the private sector developers. It could even affect the private condo market, bring prices there down. With things the way they are, who will suffer? Those who have sunk millions into their condos will suffer, for sure. As well as those who have sunk millions into their HDB resale flats.

    5. I just sold my Bishan 5-room flat at $400k. I made a loss because I bought it for $402k and did renovations. This is an 18-year old resale unit. $400k-- willing buyer, willing seller. Go check the latest prices in Marine Parade, high floor, sea view, etc. and you'll know what the prices are today. Queenstown EA's are selling for $500-600k. That's the reality people are willing to pay for.

    6. Public housing is not a basic necessity. Not like healthcare, where you'll die if you don't get treatment. Frankly speaking, nobody forces you to buy a flat. And nobody force you to buy from HDB. Yes, you want to move out, but in other countries people rent, some rent for a very long time.

    A lot of first-timers buy on the resale market. Why? Location is the prime reason. Not everybody wants to live in Sengkang/Bt Panjang. A lot of people prefer the mature estates, where there are no more new HDB flats. Thus the govt came up with the CPF housing grant to help people purchase resale flats.

    Public housing prices are not inelastic. The resale market has moved up and down as many are well aware. Back in 96, Bishan EA's were selling for $700k. Now they are selling for $400-500k. That is a lot of price movement in action.

    That is not to say HDB prices are elastic. They as sellers decide what price they want to sell. Unlike private developers, they are not so worried about P&L, inventory turnover, etc. So they choose not to cut prices. This has nothing to do with regulation, and everything to do with holding power. There is no regulation in Singapore that says HDB must sell prices at $X psf. Only that the CEO of HDB decided he doesn't want to cut prices of flats in Jurong West extension.

    So the HDB prices are higher than what you as a first-timer were hoping for. I think the question to ask yourself is, is it realistic to expect HDB to sell flats at $100k when the market price is $400k or $500k? And even if HDB were to do that, no doubt first-timers like you would be happy, but what about all your neighbours living in their resale flats?

    The sad thing is that most of those people who buy direct sell after 5 years to lock in the gains so that they can "upgrade" to condos. They don't keep the flat over the "generations". Some people even do it a second time, to try to get one more bite of the cherry.

    Using your example, the resale price of HDB flat is far more complicated than just adding the CPF housing grant to HDB's direct selling price. However, the point it makes is clear-- that the market takes one of the cues from HDB prices. So if HDB were to sell the recent Tampines flats at $100k, all the Tampines prices will come crashing down.

    Who will suffer?

    "Public housing is a highly, if not a completely monopolized market."... True technically since only there is only one seller called HDB. However, HDB doesn't exist in a vacuum, there is no way they can sell more than what people are willing to pay, and they cannot sell more expensive than the resale market, and certainly not more than private condos.

    In other words, HDB's ability to set prices is limited too.

    In my case, I bought my flat on the resale market 7 years ago at $402k. I heard (but not confirmed) that HDB originally sold these flats in 1988 at $120k (or was it $220k?). The point is that, 18 years ago, resale market prices for 5-room flats in Bishan was around $200k, so HDB priced it at $120k. 11 years after the direct buyer got it for $120k, he could sell it to me at $402k. That was the market price in 1999. It was not HDB who set the resale market price. It was set by buyers and sellers in the resale market.

    Now, HDB is building a new flat at the junction ofBishan St 11 and St 13, near mine. Do you think they can or should sell the new flats at $120k, when the market price of a flat in Bishan is $400k? On the other hand, if they were to sell it at $400k, how many people do you think will queue and ballot and buy, when they can get it immediately on the resale market?

    You are right about one thing-- that whatever the price HDB sets, we have to take if we want to buy their flats. Not because they are a monopoly, but because they are the cheapest, and we are just price takers. So even if we don't think that $300k is a reasonable price for a 5-room flat, we still have no choice, because the resale flats will cost us even more, don't mention condo.

    "Reasonable" or not depends on who you're talking to. A lot of Hongkongers bought flats here simply because they were so cheap compared to HK. On the other hand, we have people here complaining about the price of flats here and saying that $500k can get big bungalow in a neighbouring country. But sadly, that is the reality of property prices in a small country. If you think HDB owes it to the people to make 5-room flats at $100k, then you'd better vote in a different government.

    Quote Originally Posted by Silence Sky View Post
    Dear Waileong:

    I have read your posts, and have noted your stand point of HDB should sell its flats at market price. However, this not a simple case of determining the flat transaction price, based purely on supply and demand.

    Can I first identify with you that HDB is public service body and its mission is to supply and provide affordable housing to the people?

    What most of us (commoners) are asking is not for HDB to sell flat below the cost, but to sell it a reasonable price that can be sustained over generations. There are a lot of reports on people facing negative equity and suffering from asset rich but cash poor syndrome.
    I foresee that when this generation of people goes into retirement, the property bubble will burst, because these folks will have to sell their properties to finance their retirement.
    So, should we starts looking into this problem and find the softest solution?

    You mentioned that the reselling price in Marine Parade is $500K.
    I belief this is one case off, and we can’t simply use this transacted price to determine the market reselling price. This case could be one of those cash back transaction. The buyers and seller purposely jack up the selling price to get a bigger loan.

    Public housing is unlike Condos and bungalows, the former is a basic necessity and the later is a luxury item. When we apply economic principle here, we say that Public housing is inelastic. Meaning that even the price is unreasonable, we (commoner) will still have to buy and absorb most of the burden. So can you see that is not basic supply and demand?

    Secondly, Public housing is a highly, if not a completely monopolized market. Seller calls the shot and they in turn control the resell market. For example, when I sell a new flat at 150k, the resell flat will automatically be transacted at 190k because of the 40k subsidy. When I push up the price of a new flat to 200k, it is not hard to guess the price of the resell flat, isn’t it? So who is the one controlling the price?

    If supply and demand really applies in Singapore public housing, I would have expected the prices of those units in Jurong Extension to come crashing down. After completion for more than 5 years, most of the units are still empty. Taking into consideration the effect of depreciation and the flats have a limited life of 95 years left, what should be the selling price now? Again, this shows that the market is highly regulated.

    Now it is about breaking this sticky price problem, Lets try to work it out here.
    It is not nice to suggest migration because I belong to this land and my root is here.
    Also those who can afford to migrate, have left and more will be leaving.
    Those who are poor, like me, are waiting to cross the bridge when life no longer permits us to stay.
    Last edited by waileong; 4th November 2006 at 05:34 PM.

  16. #116
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    Default Re: What is the actual cost of a HDB flat?

    Since we are on the topice of HDB, i got a question,

    If A pay the housing by CPF, and his cpf has grown to a larger amount throughout the years should he pay a lump sum to try and clear the debt earlier? Does it make sense and why?
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  17. #117
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    Default Re: What is the actual cost of a HBD flat?

    Quote Originally Posted by justarius View Post
    erm, I don't see what's so hard about this HLE.

    Or would you prefer the previous situation where buyers get to pay the option fee, pay the deposit, and then find out from HDB that they don't qualify for a loan, or that the loan amount is not up to what they expect, with the end result that they have to lapse the option and lose the option fee?
    Of cos to me it will be beta dat HLE is obtain juz like LO from the banks, in this way it is more secure for us n our clients!

    But for those who r temperoary unemployed, no monthly CPF contribution or inconsistence contribution they mite nt be granted the HDB loan (granted in the past) but they r able to clear their monthly installment!

  18. #118
    Senior Member melvin's Avatar
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    Default Re: What is the actual cost of a HDB flat?

    [QUOTE=Silence Sky;2584433]Dear Waileong:
    ....
    You mentioned that the reselling price in Marine Parade is $500K.
    I belief this is one case off, and we canít simply use this transacted price to determine the market reselling price. This case could be one of those cash back transaction. The buyers and seller purposely jack up the selling price to get a bigger loan.

    I beg to differ nt all hi price r due to cash back(mind u this is unlike the taxi driver case n wif recent changes and action taken by govt. it is almost 0% to do cashback). If u look at the transcation prices through out the years in Marine Parade is always hi and a 3rm will easily cost u about $250K or more(in some place u mite be able to get a 5rm!) and dats a norm over there! Why? owners thinks dat their location is best in singapore! Same wif Bishan, Toa Payoh, Clementi, City area, Redhill....

    Public housing is unlike Condos and bungalows, the former is a basic necessity and the later is a luxury item. When we apply economic principle here, we say that Public housing is inelastic. Meaning that even the price is unreasonable, we (commoner) will still have to buy and absorb most of the burden. So can you see that is not basic supply and demand?

    It is all about supply n demand if not why the govern. stop building EA n 5rm but built 4rm 3rm n 2rm? Why they need to break up bigger unts 5rm and abv into 2rm or 3rm? Isnt it becos on the demand in smaller units n bigger units nt in demand dats resulted in the abv?

    Secondly, Public housing is a highly, if not a completely monopolized market. Seller calls the shot and they in turn control the resell market. For example, when I sell a new flat at 150k, the resell flat will automatically be transacted at 190k because of the 40k subsidy. When I push up the price of a new flat to 200k, it is not hard to guess the price of the resell flat, isnít it? So who is the one controlling the price?

    I dun understand how u can sell $150k and transcate at $190k? (unless u do cashback ) $40k subsidy is to help ease the buyer n got nothing to do wif selling!

    QUOTE]

  19. #119
    Senior Member melvin's Avatar
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    Default Re: What is the actual cost of a HDB flat?

    Quote Originally Posted by waileong View Post
    1. I never said HDB should sell at market price. I said HDB should sell at below market price, but not that much below that it would cause the resale flat prices to come crashing down.

    2. Supply and demand applies everywhere, even for HDB. Why did the Tampines designer flats have so many applicants despite the high price? Why are Jurong West extension flats empty? The former, because of demand. The latter, because HDB (unfortunately) is not that market oriented, so they refused to cut prices enough to move the flats.

    The demand curve is not always linear. For some products, demand is so weak that no matter what you do, no one will buy. Hence companies have to write off inventories from time to time.

    3. I don't believe in HDB's mission any more. In the early years, to help people move from kampong to city, yes. Nowadays, with designer flats, etc? To me they are just another housing developer with a side mission of making housing more "affordable".

    4. I still don't think HDB can sell flats at (say) $100k if the resale price is $400k. That would cause the market to crash. The govt would be using its powers unjustly to acquire land cheaply and sell flats cheaply. It would be unfair competition to the private sector developers. It could even affect the private condo market, bring prices there down. With things the way they are, who will suffer? Those who have sunk millions into their condos will suffer, for sure. As well as those who have sunk millions into their HDB resale flats.

    5. I just sold my Bishan 5-room flat at $400k. I made a loss because I bought it for $402k and did renovations. This is an 18-year old resale unit. $400k-- willing buyer, willing seller. Go check the latest prices in Marine Parade, high floor, sea view, etc. and you'll know what the prices are today. Queenstown EA's are selling for $500-600k. That's the reality people are willing to pay for.

    6. Public housing is not a basic necessity. Frankly speaking, nobody forces you to buy a flat. And nobody force you to buy from HDB. Yes, you want to move out, but in other countries people rent, some rent for a very long time.

    A lot of first-timers buy on the resale market. Why? Location is the prime reason. Not everybody wants to live in Sengkang/Bt Panjang. A lot of people prefer the mature estates, where there are no more new HDB flats. Thus the govt came up with the CPF housing grant to help people purchase resale flats.

    Public housing prices are not inelastic. The resale market has moved up and down as many are well aware. Back in 96, Bishan EA's were selling for $700k. Now they are selling for $400-500k. That is a lot of price movement in action.

    That is not to say HDB prices are elastic. They as sellers decide what price they want to sell. Unlike private developers, they are not so worried about P&L, inventory turnover, etc. So they choose not to cut prices. This has nothing to do with regulation, and everything to do with holding power. There is no regulation in Singapore that says HDB must sell prices at $X psf. Only that the CEO of HDB decided he doesn't want to cut prices of flats in Jurong West extension.

    So the HDB prices are higher than what you as a first-timer were hoping for. I think the question to ask yourself is, is it realistic to expect HDB to sell flats at $100k when the market price is $400k or $500k? And even if HDB were to do that, no doubt first-timers like you would be happy, but what about all your neighbours living in their resale flats?

    The sad thing is that most of those people who buy direct sell after 5 years to lock in the gains so that they can "upgrade" to condos. They don't keep the flat over the "generations". Some people even do it a second time, to try to get one more bite of the cherry.

    Using your example, the resale price of HDB flat is far more complicated than just adding the CPF housing grant to HDB's direct selling price. However, the point it makes is clear-- that the market takes one of the cues from HDB prices. So if HDB were to sell the recent Tampines flats at $100k, all the Tampines prices will come crashing down.

    Who will suffer?
    A point to note: buying a HDB flat at $100k will not fetch $400k or $500k in the resale market! At most it will fetch abt $60k-$80K more then purchase price in most area! unless u r in the prime location say u buy abt $200k u can expect abt another $150k-$180k more then purchase price. all these will onli happen if it is 5yrs of brand new flats n the location they r in!

    And nt all HDB first timer will enjoyed this benifits u ask those who bought the 1st n 2nd batch of flats in sengkang some of thier valutaion for resale is even lower then their purchase price or abt the same! Most of them selling at a lost!

  20. #120
    Senior Member melvin's Avatar
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    Default Re: What is the actual cost of a HDB flat?

    Quote Originally Posted by Sjourn View Post
    Since we are on the topice of HDB, i got a question,

    If A pay the housing by CPF, and his cpf has grown to a larger amount throughout the years should he pay a lump sum to try and clear the debt earlier? Does it make sense and why?
    Depending on at which state he is serving his loan? best is wif in the first few years of loan cos dat is the time when people r servicing the interest of their loan be it HDB or Bank loan, rather then the principal!

    Most people will prefer to cut short their loan term or redeam no matter which state of loan he is servicing, So they can reduced the accrude interest! which is quite a huge amt
    Especially the economy now n there r no iron rice bowl le...
    One has to do his own calculations n planning before redeaming his loan!

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