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

  1. #121
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    Default Re: What is the actual cost of a HBD flat?

    Quote Originally Posted by waileong View Post
    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.
    I didn't get a chance to vote. I think majority of s'poreans didn't get to vote. only the lucky 1.1M voted...
    “How fortunate for leaders that men do not think.” - Adolf Hitler

  2. #122

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

    waileong - should kick those who complained about HDB pricing out of singapore. camera they want cheap, lens they want cheap, AD photography they want cheap - all these cheapskates should be dump into the rubbish cute - can't stand them disgracing the status of Singapore.

  3. #123

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

    Weileong,

    I guess, now I know where you are coming from. You believe that HDB takes the cue from the resale market and uses it as a barometer to set the selling price for new flat. The resale market is made up of willing buyers and sellers, therefore the transacted price reflects the true and fair value.
    If HDB is going to reduce and set the selling price of new flat at a more reasonable level, the property market will crash as a result. Those who bought their property at high price will suffer.

    I believe what set us so far apart is your view that public housing is not a basic necessity and there is better alternative to HDB flat.

    But here are my thoughts:
    1)Why should HDB care about the resale value? Shouldn’t HDB just stay close to the intrinsic value of the flat? A few cases of selective buying of resale flats with good location (near to parent, near to your preferred school or your workplace), amenities, nice scenery and good view will leads to a higher transaction price. HDB comes to know about the high transaction price and decide to bench mark it and set the selling price slightly lower for their new flats in that location. Now the question, is it fair to let a few good units sold to a few people who can well afford the high price, determine the price for the rest of the average units?

    2)There are concerns that the property market will collapse if the selling price is adjusted downwards. I have mentioned before, the problem we should focus on is that people are now facing negative equity and being cash poor. Our real wages did not catch up with the housing cost. How should the government (best in the world and being paid world class salary) solve the problem for us? Imagine, you are driving, your brakes failed suddenly and approaching a split road. On one side there is only one child (current generation) playing on the road, on the other side scores of children (next and future generations) are playing on the road. You have to make a decision, which side will you drive into? We are messed up, someone has to sacrifice, who should it be?

    I have different views on some of your points, will response separately.
    Last edited by Silence Sky; 4th November 2006 at 11:41 PM.

  4. #124
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    Default Re: What is the actual cost of a HDB flat?

    Those 66.6% who voted don't complain. Only those 33.4% can!
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  5. #125

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

    If there is anyone who can figure out the "intrinsic" value of a flat that everyone can agree with, I'd like to meet him.

    "Value" is one of the most elusive concepts in both marketing and in economics.

    I can't even give the value of a camera that will everyone in the world will agree with.

    For instance, there are thousands of film cameras being dumped or sold for peanuts right now. An EOS 30 for $300? 10 years ago, they were being sold for more than $1,000! And that's 1996 dollars. The cost of producing and distributing an EOS 30 is almost certainly more than $300. And the value of a EOS 30-- in terms of the features it offers, the quality of the pictures it takes, its ability to give you happy memories, etc-- is definitely (in my view) a lot more than $1,000 in 1996 dollars.

    It's one of the greatest bargains in the history of photography, yet people are dumping it for $300 in 2006 dollars. And people think nothing of spending $3,000 for a EOS 30D and having it depreciate 10% ($300) every three months.

    But perhaps the instant preview, histogram, ability to capture pictures digitally without scanning, etc. all that are worth more than $300 every three months.

    So I say value is one of the most difficult things in this world to agree on.

    We know what value isn't. It isn't the cost. It isn't the selling price. It isn't even the price the buyer was happy to pay.

    We also know that different people put different value on different things. Hence it's possible to negotiate, because I can give you what you value (and I don't value) and you can do the same.

    We know that it's not possible to have a single value for something that everyone can agree on. Because value is what we think and believe something should be worth. And because we are different, all of us will tend to come up with different values for any object you can name.

    Including flats.

    I believe you can find out how much you think a HDB flat is worth. But I doubt that it will be the same figure that everyone else has in mind. And to say that your "intrinsic" value is the same as others' "intrinsic" value is stretching it.

    On wages not catching up with housing cost increases-- sadly that happens everywhere, not just Singapore. In a sense, people expect that. Did you watch Superman Returns? Lex Luthor said, there's only one thing that they're not making more of-- and that's land. So if you want capital gains, invest in land and property. As early as you can.

    Could you imagine it the other way? That more and more people are looking for property (which is a scarce asset limited by our land area), yet prices are stable or barely track inflation. How could that be? How can land prices not rise in real terms if every year, more and more people are buying land?

    In economics, real prices fall only if you have productivity increases or if there's new technology breakthrough. There's no productivity increases in property (construction costs notwithstanding, as property prices depend mainly on location, view and other non-tangible factors) and there's no technological breakthrough to create more land. So how can property prices really fall?

    The only time when property prices will fall is if S'pore experiences recession (eg Asian crisis) or if it's clear the world has passed us by. That is what you pay a world-class govt to avoid.

    Quote Originally Posted by Silence Sky View Post
    Weileong,

    But here are my thoughts:
    1)Why should HDB care about the resale value? Shouldn’t HDB just stay close to the intrinsic value of the flat? A few cases of selective buying of resale flats with good location (near to parent, near to your preferred school or your workplace), amenities, nice scenery and good view will leads to a higher transaction price. HDB comes to know about the high transaction price and decide to bench mark it and set the selling price slightly lower for their new flats in that location. Now the question, is it fair to let a few good units sold to a few people who can well afford the high price, determine the price for the rest of the average units?

    2)There are concerns that the property market will collapse if the selling price is adjusted downwards. I have mentioned before, the problem we should focus on is that people are now facing negative equity and being cash poor. Our real wages did not catch up with the housing cost. How should the government (best in the world and being paid world class salary) solve the problem for us? Imagine, you are driving, your brakes failed suddenly and approaching a split road. On one side there is only one child (current generation) playing on the road, on the other side scores of children (next and future generations) are playing on the road. You have to make a decision, which side will you drive into? We are messed up, someone has to sacrifice, who should it be?

    I have different views on some of your points, will response separately.
    Last edited by waileong; 5th November 2006 at 02:13 AM.

  6. #126

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

    "Value is intrinsically related to the worth derived by the consumer"

    Cost is easy, its the land that goes up in price not the building

  7. #127

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

    not sure about the prices but i see that quite afew study econs before? hahhaa....some of u guys sound so "econs" hahhaa....reminds of my econs lecture!

    Anyway...is true that one spend half the life time (full working time) to pay up the hdb flat...but hey, the rest of ur life u just stay in there don't need to pay le mah^^ hahhaa. still is few times more exp than 10 to 20yrs ago but cheaper than some countries...more expensive than some countries...so I don't think we can just compare to other countries like that.


    Probably for our GDP sake, they have to sell at this price?
    DSLR newbie: 400D + Tamron 18-200mm + 50mm F1.8 (i simply love it!)
    Canon G2

  8. #128

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

    Quote Originally Posted by ahbian View Post
    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. I’m sure there will be replies saying that there will be HAPPINES with wealth, that’s 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.
    Hello Ah Bian:

    You should not have provided these links at this time, I have been trying so hard to put the issues of minister’s pay behind me and find peace within self. Your links has rekindled the fire in me again! Promise me, next time you want to pop up these links, do it sometime near the next GE, ok?

    I think, the pioneer breed of leaders have this philosophy: Give me a chance to serve you, give me your support, let’s forge ahead together and you will have your Promised Land.
    Life is tough but at the end of the day, we all enjoy and share equally the fruits of our labour.
    The new batch of leaders: You want your Promised Land? You want to me to serve you better? Then, you better pay me world class salary.
    But do you realise something, no people in the world pay their leaders that kind of money.

    I am wondering, do our students still read Animal Farm? It is a shame if we have discontinued it.

    Let me try to recap, hope I am not too far off.

    In the beginning, with Human around (Colonist), the slogan is “Two legs Bahhh! Four legs Gooddd!)

    When the Human is gone, the Pigs being the smarter one (Elites) took over the helm. They start to walk on two legs and become more equal than other animals.

    In the end, the old and useless working horse was sent to the abattoir.
    Last edited by Silence Sky; 5th November 2006 at 10:35 PM.

  9. #129

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

    Quote Originally Posted by dDarkroom View Post
    waileong - should kick those who complained about HDB pricing out of singapore. camera they want cheap, lens they want cheap, AD photography they want cheap - all these cheapskates should be dump into the rubbish cute - can't stand them disgracing the status of Singapore.
    Very Soon, you will see Temasek again, with only two inhabitant. One is Waileong and the other is you. Waileong will rear some poultry to feed you and you will go fishing to provide waileong with some seafood. Life is Good.
    Last edited by Silence Sky; 5th November 2006 at 11:00 PM.

  10. #130
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    Default Re: What is the actual cost of a HDB flat?

    Quote Originally Posted by Silence Sky View Post
    There is a thread discussing on the medical cost, and how did our medical system fair when compared to those of the developed nation.

    This topic somehow directs my thought to our public housing scheme.
    HDB used to sell a four room flat for $25,000 in the 80’s, today a similar flat cost about $200,000 on average. Did our real wages catch up with the housing cost? I suppose technology advancement has help to cushion some of rising construction cost. In the 80’s, architects need 9 months or more to produce the blueprint, today we can do it in less than a month with the help of designing software like Autocad.

    Is this the true price for a HDB flat and is it sustainable?
    I see it as a classic case of market failure, where the builder monopolized the market and determine the selling price. There are quite a lot of empty units around and HDB is engaging private agents to help market these flats. There is supply but no demand and the price is still very high. This is a sign of an inefficient market. I have heard a lot of people are using half of their life time paying off the HDB loans. They have no saving when they retire, except for the miserable sum in the CPF SA.

    The men in white tell us that garment subsidize the first time buyer $40,000.
    I am wondering, what is actual cost for building one unit? If the building cost is lower than the selling price, how can garment claim that they subsidize its citizen on the HDB flat.

    This sticky price will hurt this generation and all the future generations to come. If the garment decided one day to break this vicious cycle of sticky price, what will happen to those who bought during the peak of property (before 1997).

    What should the garment do? Which generation should the garment sacrifice?
    This is not a simple problem, do you have a solution?
    hey, what do you mean by the architects can come up with the blue print in a month? are you suggesting that architect fees constitute alot out of the cost of construction?

    why aren't you looking at land costs? sheesh ...

  11. #131
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    Default Re: What is the actual cost of a HDB flat?

    "The men in white tell us that garment subsidize the first time buyer $40,000.
    I am wondering, what is actual cost for building one unit? If the building cost is lower than the selling price, how can garment claim that " quoted.


    Cost for building 1 unit? u mean the cement and steel needed ? i think for a 5 room flat, its 30 to 35k bah.the most.

    Well. Our Pay is really not catching up in time le. . . . . . . thats simple mathematics worth bringing up, any one care to give an answer?

    Ya lo...Dont like the state u are now? leave loooohhhh, a lot of PPL(Talents )dying to come in le......such message seems to be stronger nowadays.

    Look theres lots of MYANMMAR ,CHINA and Malaysian talents coming in. I remember someone in GAHMEN said that" Being a SINGAPOREAN is no longer a birth right, Whoever wanted to b Singaporean can be one."

    sigh.We have to listen to my GAHMEN, help make the foreign talent feel comfy, but during stay in Australia for studies, some Ang Mo Shouted at me "Go back to ur own country"

  12. #132
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    Default Re: What is the actual cost of a HBD flat?

    Quote Originally Posted by Silence Sky View Post
    Hello Ah Bian:

    I am wondering, do our students still read Animal Farm? It is a shame if we have discontinued it.

    Let me try to recap, hope I am not too far off.

    In the beginning, with Human around (Colonist), the slogan is “Two legs Bahhh! Four legs Gooddd!)

    When the Human is gone, the Pigs being the smarter one (Elites) took over the helm. They starts to walk on two legs and become more equal than other animals.

    In the end, the old and useless working horse was sent to the abattoir.
    ahhh animal farm , george orwell - my favourite subject in secondary, n my teacher who show me wats a good literature , i think such books are no longer taught ,,

    can any secondary students share ????

  13. #133

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

    Quote Originally Posted by waileong View Post

    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.
    I am a bit confused here.
    If supply and demand applies to every where, then why it did not apply to your latter case?

    Quote Originally Posted by waileong View Post
    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.
    We are talking about employing the theory of supply and demand to determine the equilibrium price and to predict the market responds, aren’t we? There’s no need to examine whether the demand curve is linear or not. By the way, at first I thought demand curve is really a curve, but latter learnt that the graph is simply two straight lines.

    Quote Originally Posted by waileong View Post
    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.
    On the other hand, is it just for the garment to acquire land cheaply and later sell it at an astronomical price for public housing purpose?
    Private developers compete in a different segment, building the up class property for the rich people. It is right for me to put you into a boxing ring and fight with Mike Tyson?

    Quote Originally Posted by waileong View Post
    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.
    Can you explain why public housing is not a basic necessity? Can I say that public transport is also not a basic necessity as well? You can always walk to your destination, right?

    Quote Originally Posted by waileong View Post
    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.
    Inelastic, does not mean that the price does not fluctuate. I am simply saying, since demand curve is inelastic, the buyer has to bear most of the burdens, eg. Paying a price higher than he/she believes is fair.


    Quote Originally Posted by waileong View Post
    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.
    You misunderstood me. A regulated market does not means that there are write up regulations to it.
    I am pointing out that, HBD regulates the market through various means, eg. Controlling the number of unit to be built, when and where to build, in order to maintain the current selling price. Like what you have pointed out, the CEO tries to regulate the market by deciding not to cut price despite there is no demand. The whole market is ineffecient as a result.
    Last edited by Silence Sky; 6th November 2006 at 02:19 PM.

  14. #134

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

    Quote Originally Posted by Chiang View Post
    ahhh animal farm , george orwell - my favourite subject in secondary, n my teacher who show me wats a good literature , i think such books are no longer taught ,,

    can any secondary students share ????
    Yes, written by George orwell.

    Seriously, I did not learn the essence of this book until I was told by the Pigs to accept the fact of the huge wage gap.

    I think, it is like the era of cultural revolution. You will be prosecuted for reading Animal Farm.
    Last edited by Silence Sky; 6th November 2006 at 04:09 PM.

  15. #135

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

    Quote Originally Posted by Silence Sky View Post
    Very Soon, you will see Temasek again, with only two inhabitant. One is Waileong and the other is you. Waileong will rear some poultry to feed you and you will go fishing to provide waileong with some seafood. Life is Good.
    ney, will throw him/her down the rubbish chute - rubbish heap.

    ALL ANIMALS ARE EQUAL, BUT SOME ANIMALS ARE MORE EQUAL THAN OTHERS.

  16. #136

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

    Quote Originally Posted by eikin View Post
    hey, what do you mean by the architects can come up with the blue print in a month? are you suggesting that architect fees constitute alot out of the cost of construction?

    why aren't you looking at land costs? sheesh ...
    Don't bother - he will tell you that the cost of land is determined by the government too.

  17. #137

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

    Quote Originally Posted by Silence Sky View Post
    I am a bit confused here. If supply and demand applies to every where, then why it did not apply to your latter case?
    It applied-- except the CEO of HDB refused to, and did not need to, meet it. In other words, HDB had holding power, and they simply refused to sell at a lower price. On the other hand, the demand curve at the price HDB was asking was practically nil. That's supply and demand in action all right.

    Demand curve can only tell you what the demand is at every price level. It cannot tell you why people refuse to acknowledge reality and refuse to meet demand.

    Quote Originally Posted by Silence Sky View Post
    On the other hand, is it just for the garment to acquire land cheaply and later sell it at an astronomical price for public housing purpose?
    Actually they're supposed to obtain it at fair prices, and if the owners don't think it's fair, they can appeal and even sue the govt, as some did when LTA acquired the land for the Circle Line.

    As to the selling price, I've already explained what I believe their thinking is-- don't sell too far below market.

    No doubt HDB flat prices are high (compared to Malaysia)-- but they compare favorably against resale.

    Quote Originally Posted by Silence Sky View Post
    Can you explain why public housing is not a basic necessity?
    "Housing" is a necessity. "Public" housing is not. Why? Because I think people should not expect the govt to build cheap flats for them. Not any more. Not when most people already have a roof over their heads, you hardly have any homeless people in S'pore, and there's lots of flats in the resale market.

    I say again, do you expect that the govt should provide you a cheap HDB flat just because you voted P A P? Maybe that's the expectation in this country, but if you go to US, UK, etc. they don't expect any cheap housing from the govt, those who cannot buy will rent, and the homeless people live in shelters run by NGO's, churches, etc.

    Quote Originally Posted by Silence Sky View Post
    Can I say that public transport is also not a basic necessity as well? You can always walk to your destination, right?
    Again-- transport is a necessity, but "public" transport is not. Frankly, anyone can provide bus or train services-- the govt or state-owned enterprises are usually not the best parties to do so. It's better for public sector players to provide services and for govt to stick to regulation. Decades of experience show that private sector is better at running services efficiently than govt.

    We're really getting into public policy now... lets just say that the times have moved. Deregulation, privatisation are now the way things work. In other words, govt should step back and allow the private sector to do what it does best (which is make things work efficiently) while govt concentrates on what it does best (which is to govern and ensure level playing field).

    In other words, if possible govt should not run bus services, train services, phone services, electricity services, etc. These should be (and indeed are being) done by private sector players. In S'pore these private sector players happen to be GLC's, but in other countries, they are really private sector. The govt issues regulations on pricing, regulates the behaviour of the licensees, but as far as possible, does not actually provide the service itself.

    Quote Originally Posted by Silence Sky View Post
    I am pointing out that, HBD regulates the market through various means, eg. Controlling the number of unit to be built, when and where to build, in order to maintain the current selling price. Like what you have pointed out, the CEO tries to regulate the market by deciding not to cut price despite there is no demand. The whole market is ineffcient as a result.
    HDB influences the market, of course. But does not regulate it. There is a very clear distinction, and you should be careful in your choice of words.

    But HDB is not the only player. And in fact, I think they are a lot less powerful than you portray. There is very little their building programmes can influence resale prices, which are mainly in mature estates, as new flats in Sengkang do not compete with resale flats in Marine Parade.

    They can of course influence the market through other means, eg policies such as minimum occupation period, loan policies, racial quotas, eligibility for singles, etc. But these have nothing to do with how many flats HDB builds or does not build.

    HDB announces how many units it intends to build well in advance, so that the market can be prepared. I don't think they do it to target any particular selling price for new flats. They may hold back their building programme when they think demand is not there. But did you notice private sector players also did the same? A lot of them just built up their land bank in the last few years and held back their launches because of the recession.

    I don't agree the market is inefficient. HDB cannot just build X flats a year totally ignoring market conditions, and sell at price Y regardless of market prices. If the market is hot, it should build more than X. If cool, it should build less than X, maybe even zero. That is what any rational private sector developer would do as well. I do not consider that an act of trying to control the market. And such actions by the actors in the market do not make the market inefficient. Indeed, the market would be highly inefficient if the actors all built X units per year, regardless of demand.
    Last edited by waileong; 6th November 2006 at 07:15 AM.

  18. #138

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

    sunday times(the week before) has an article on this. read it. insightful. in short, if you can invest your oa funds and earns more 2.6%, then, you should continue paying the mortgage.

    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?

  19. #139

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

    Quote Originally Posted by Virgo View Post
    Those 66.6% who voted don't complain. Only those 33.4% can!
    Errr.. I didn't get to vote leh... Always walkover one... Sianz..

  20. #140

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

    Those pigeon holes? We got ripped off!

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