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

1. ## Re: What is the actual cost of a HDB flat?

Originally Posted by waileong
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.

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

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.
To you a can of beer might mean trash, but to me what is there in life without beer. Both of us valued beer to different degree.

But I am talking about intrinsic value and not personal or face value of a flat unit. Let me give an example: \$1 dollar coin is made from aluminum and bronze, it weighs 6.3g. For illustration purpose only: Take it as 2 grams of Aluminum costs \$0.20 and 4.3g of Bronze costs \$0.30. The intrinsic value of your \$1 coin is only worth \$0.50. However, it has a paper value of \$1.00 and its face value will depend on individuals. One dollar to a rich man might mean nothing, but to me, I can use it to buy rice for 3 meals.

Therefore, I think it is not very difficult to determine the intrinsic value of a flat.

By the way, the intrinsic value of our 1 cent coin is worth more than its paper value. You can make money if you collect a lot of it and then sell it as scrape metal.

2. ## Re: What is the actual cost of a HDB flat?

Sorry your example doesn't work. Esp. if you express it in dollars.

Aluminium costs \$0.20 only because that's the market price on the commodities exchange. Tomorrow the price could be different, next year it will almost certainly be different. Ditto bronze.

Tell me how you would determine the intrinsic value of a flat. And not just your intrinsic value but a value that everyone can agree with.

Originally Posted by Silence Sky
To you a can of beer might mean trash, but to me what is there in life without beer. Both of us valued beer to different degree.

But I am talking about intrinsic value and not personal or face value of a flat unit. Let me give an example: \$1 dollar coin is made from aluminum and bronze, it weighs 6.3g. For illustration purpose only: Take it as 2 grams of Aluminum costs \$0.20 and 4.3g of Bronze costs \$0.30. The intrinsic value of your \$1 coin is only worth \$0.50. However, it has a paper value of \$1.00 and its face value will depend on individuals. One dollar to a rich man might mean nothing, but to me, I can use it to buy rice for 3 meals.

Therefore, I think it is not very difficult to determine the intrinsic value of a flat.

The intrinsic value of our 1 cent coin is worth more than its paper value. You can make money if you collect a lot of it and then sell it as scrape metal.

3. ## Re: What is the actual cost of a HDB flat?

Originally Posted by melnjes
Don't bother - he will tell you that the cost of land is determined by the government too.

then again, to some extent it is determined by the government. those who want to know may want to do some searching and questioning at the relevant authority http://www.sla.gov.sg/htm/abo/abo01.htm

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

Originally Posted by eikin
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 ...
Brother,

Not that architect fee is a major contributor to the cost of a HDB unit. Just trying to say that technology advancement has help to reduce the construction cost. In the past, architects have to draw manually on tracing paper, If you have done Engineering Drawing before you will understand that a great amount of time is needed to make a minor alteration to manual drawings. In the past construction is labour intensive, today, a lot of machinery is used to replace labour. Old buildings are usually about 12 story high, but today's technology allowed us to build much taller building. Compare to the past, HDB now builds thrice as many units in a same plot of land. That's way I am asking why a uint cost \$25000 before and now it cost \$200,000.

As for the land cost, I do not think you are asking a direct question. If I state any price, you are going to hit back with the opportunity cost of the land had it be used for other purposes. Maybe you can enlighten me with what you think the land costs should be.

I was told why PA* couldn't not win back Hougang and has to breakup the Cheng SAN GRC.
Alot of the residents in these two constituency are ex-villagers from Sambawang kampong. The garment forcefully took away their lands and paid them peanuts. So what you do think is the land costs?

5. ## Re: What is the actual cost of a HDB flat?

Originally Posted by Silence Sky
Brother,

Not that architect fee is a major contributor to the cost of a HDB unit. Just trying to say that technology advancement has help to reduce the construction cost. In the past, architects have to draw manually on tracing paper, If you have done Engineering Drawing before you will understand that a great amount of time is needed to make a minor alteration to manual drawings. In the past construction is labour intensive, today, a lot of machinery is used to replace labour. Old buildings are usually about 12 story high, but today's technology allowed us to build much taller building. Compare to the past, HDB now builds thrice as many units in a same plot of land. That's way I am asking why a uint cost \$25000 before and now it cost \$200,000.

As for the land cost, I do not think you are asking a direct question. If I state any price, you are going to hit back with the opportunity cost of the land had it be used for other purposes. Maybe you can enlighten me with what you think the land costs should be.

I was told why PA* couldn't not win back Hougang and has to breakup the Cheng SAN GRC.
Alot of the residents in these two constituency are ex-villagers from Sambawang kampong. The garment forcefully took away their lands and paid them peanuts. So what you do think is the land costs?
paiseh i not your brother, anyway i'm in the construction industry as well, so you don't need to teach me how to make an architectural drawing.

land cost is the major component of total costs of putting up any building. i'm telling you that you're knocking on the wrong door. i have no interest in your debate, if you're so interested in digging up the costs of apartment in Singapore, maybe you should ask SLA how they determine the price of land in Singapore, you're going major OT with your political talks here.

6. ## Re: What is the actual cost of a HDB flat?

Originally Posted by eikin
paiseh i not your brother, anyway i'm in the construction industry as well, so you don't need to teach me how to make an architectural drawing.

land cost is the major component of total costs of putting up any building. i'm telling you that you're knocking on the wrong door. i have no interest in your debate, if you're so interested in digging up the costs of apartment in Singapore, maybe you should ask SLA how they determine the price of land in Singapore, you're going major OT with your political talks here.
Uncle, what does "OT" means?

7. ## Re: What is the actual cost of a HDB flat?

Originally Posted by eikin

then again, to some extent it is determined by the government. those who want to know may want to do some searching and questioning at the relevant authority http://www.sla.gov.sg/htm/abo/abo01.htm
up to a certain level, but i suspect that some people will pounce on it and quote it all out of context.

I'm surprised people are naive enough to think that by voting for another party, something like this will get implemented. This is not going to happen regardless of whichever party is in power, not unless the party is totally inept. This has nothing to do with politics, despite some obvious attempts in the thread to rally support by bringing it up, more with understanding how any economy works.

8. ## Re: What is the actual cost of a HDB flat?

Originally Posted by melnjes
up to a certain level, but i suspect that some people will pounce on it and quote it all out of context.

I'm surprised people are naive enough to think that by voting for another party, something like this will get implemented. This is not going to happen regardless of whichever party is in power, not unless the party is totally inept. This has nothing to do with politics, despite some obvious attempts in the thread to rally support by bringing it up, more with understanding how any economy works.
Hiding in someone pants and Pull pot shots at others’ comments is not naive but childish.

“This is not going to happen regardless of whichever party is in power, not unless the party is totally inept.”
Do you mean that those capable are those who can jack up the cost of public housing and health care?

The problems are people now facing negative equity, short of retirement funds and cannot cope with medical costs. If these issues are not of concern to the politicians, what is?
Do we pay them handsomely just to do Hip Hop dancing, house visiting and attend ceremony?

9. ## Re: What is the actual cost of a HDB flat?

If one can't change the environment to suit themselves then one got to change themselves to suit the environment!

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

Originally Posted by Silence Sky
To you a can of beer might mean trash, but to me what is there in life without beer. Both of us valued beer to different degree.

But I am talking about intrinsic value and not personal or face value of a flat unit. Let me give an example: \$1 dollar coin is made from aluminum and bronze, it weighs 6.3g. For illustration purpose only: Take it as 2 grams of Aluminum costs \$0.20 and 4.3g of Bronze costs \$0.30. The intrinsic value of your \$1 coin is only worth \$0.50. However, it has a paper value of \$1.00 and its face value will depend on individuals. One dollar to a rich man might mean nothing, but to me, I can use it to buy rice for 3 meals.

Therefore, I think it is not very difficult to determine the intrinsic value of a flat.

By the way, the intrinsic value of our 1 cent coin is worth more than its paper value. You can make money if you collect a lot of it and then sell it as scrape metal.
This talk about so-called "intrinsic value" is meaningless. You are throwing the term around in this discussion as if it actually means something. Lets say we grant you the meaning that you purport the term to have, and see how your argument holds water.

Lets talk about airline fares. What is the "intrinsic value" of a flight from Singapore to Perth? As the consumer, do you really care? As far as you are concerned, the only value that matters to you is the MARKET VALUE of the ticket. Will you pay "intrinsic value" if it were many times above the "market value"? I suspect not.

What is the "intrinsic value" of a Canon camera made in Thailand vs one made in Japan? It probably costs Canon a lot less to make the camera in Thailand, but does the value of the camera not lie in its function and reliability, rather than its cost of production? I.e., if the camera made in Thailand had the same function as the one made in Japan, and proves itself more reliable, does it not hold more value than the Japanese one, cost of production notwithstanding?

You see, your attempt to link the cost of producing a HDB flat to its selling price is full of holes. The only "value" that matters here is market value.

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

Silence Sky:

You talk about negative equity and such. This is all well and good. In fact I'm surprised that this thing about negative equity was only brought up so recently. For years I've wondered how on earth some people I know can possibly sustain their lifestyle without hitting the brakes disastrously in the future. This is not a new problem. Or did you think it was? We owe it to ourselves to do sound financial planning. I even know of a couple who live in a developed country, willing to retire to a third-world country, and have made plans for it even though retirement is some 30+ years away. Do we expect the government to run a charity? I find it so confusing. Sometimes, people complain about Big Brother watching us. The next thing you know, they expect the government to pull them out of something they put themselves into. Can they make up their mind?

So you jump on a solution that you think can solve such a problem. Which appears to me to be painless to you. Maybe it solves your own problem, but you have not thought enough of the consequences on everyone else when the policymakers pulls such a stunt. You think of new flats as one market, resale flats as another market, private property as yet another market. In reality, things don't work that way - you have forgotten that there is consumer movement within and across each segment. There are market forces at play. You are just thinking of things in separate silos and refusing to see the system as a whole. You throw terms around but have no idea what you are talking about. People have been asking you to clarify some things but you just sidestep the queries. Can you see the holes at all?

I truly believe that there are people who need help, but these are people who don't have the means to pursue photography, or surf the web.

Don't bother replying my posts lah - they are worthless. If you really want to convince people, just reply the posts that matter. Good luck to you sir!!!

12. ## Re: What is the actual cost of a HDB flat?

Hello Melnjes and all:

You have put up very good points. Yes, we should be solely responsible for our own financial health. We should not expect people to bail us out of the trouble we got ourselves into. Indeed, this discussion is getting very confusing. To certain extend we have to start defining terms like “intrinsic value” and “supply and demand” just to support our arguments. Like some had said it is pointless, so what if you have got the terms correct, the housing issue still remains.

I am not expecting garment to run a charity, but at the very minimum, please lease a flat unit to me at a fair price. After paying hundred of thousands, at the end of the day I still got to give the flat back to you at no cost.

CPF contribution was cut from 20% to 13%, it greatly affect my ability to pay for a HDB flat. It is ok since this measure is to keep my rice bowl. But before garment starts to pay themselves handsomely on the pretext of good economics growth, don’t you think they should first restore our 20% contribution? We have a good government, I am not asking for regime change but calling for more attention to our basic needs.

I admit from the first post, this is not a simple problem that can be solved without some sacrifices being made and I really do not have a solution to this problem. Yes, market forces are at play, but I see it as those who spend out of their means have set the price trend. Shouldn’t something be done here, rather than conveniently take it as the prevailing market value.

I am not trying to sidestep any queries, since we all are here to discuss the topic. But I am not Mr know all, some questions is really beyond my comprehension and some are really out of my perspective. Please take it that I am not well learnt. On the other point, I really need help from fellow forumers to help me reconcile with the statement “Public housing and transport is not a basic necessity”. If it is really not a necessity, I would not expect anyone to make it affordable. I did a simple calculation on a household with three kids and the gross monthly income is 3k. It is no way you can save enough for retirement after paying off a 200k HDB flat. Therefore, I maintain that our wages did not catch up with the costs of living.

I think I have grumble enough. I wish all of us can have a good retirement. Cheers

13. ## Re: What is the actual cost of a HDB flat?

I agree with SILENCE SKY. When can we earn enough for retirement??

3K * 12mth = 36K
36K * 6 years = 216K

hey man......it actually can work. IF try not to have children and wife, don't dont spend.

we can actually pay off the 200K flat in 6 years......

14. ## Re: What is the actual cost of a HDB flat?

If you find it too expensive to live in Singapore, you should pack up and go to your neighbour tomorrow instead of making endless fuss here. Welcome to the real world.

15. ## Re: What is the actual cost of a HDB flat?

Originally Posted by katty
If you find it too expensive to live in Singapore, you should pack up and go to your neighbour tomorrow instead of making endless fuss here. Welcome to the real world.
dont think this is a fair statement. Singapore is his home and birthright. Why should he pack up and leave so easily?

If I am fr the gahmen, I'd be delighted to see how some forumers here are so understanding of the situation in Sg, and willing to rationalise objectively. I'm sure I wouldn't hear any complains/grumblings from them ever.

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

You know, telling people to put up or move out is quite rude.

17. ## Re: What is the actual cost of a HDB flat?

Ya, at least I don't fill 10 pages of grouchiness complaining about government policies among talk only no action forummers.

18. ## Re: What is the actual cost of a HDB flat?

Originally Posted by katty
Ya, at least I don't fill 10 pages of grouchiness complaining about government policies among talk only no action forummers.
ya lor, garment policies always have our interest and concerns taken into consideration above all else. so leave it to them la.

i love that guy putting up at punggol river, occasionally I visit him with dinner.

btw katty another charity shoot this weekend free or not - support leh. this time is shooting for yellow ribbon project.

19. ## Re: What is the actual cost of a HDB flat?

Ha yellow ribbon. Love it. At least some people are working towards a better tomorrow, instead of just arrowing in a forum.

20. ## Re: What is the actual cost of a HDB flat?

Originally Posted by katty
Ha yellow ribbon. Love it. At least some people are working towards a better tomorrow, instead of just arrowing in a forum.
yep, many of them deserve a second or third chance in life to move on.

how about going down to punggol river this evening, that malay uncle lives in a floating hut, and have dinner there and talk about this yellow ribbon project.

will buy him nasi lemak from changi village.

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