Don't think HDB ever released any detailed information on build costs... and a good reason not to. Or else, 5 years and we'll be gone...
Nikon D300, Sigma 10-20mm/f4-5.6, 30mm f/1.4, Nikon 50mm f/1.4D, 85mm f/1.8D, SB-600.
Of course the selling price is not the price of the construction. Its like saying the price of oil is the price of its extraction. The flat (and oil) has a market value, driven by its supply and demand. That is not to say that it is affordable though.
Last edited by dkw; 21st July 2008 at 02:37 PM.
Therefore, the sale price of a new flat does not necessarily need to be equal to its price of construction, nor should one expect it to be. It can in fact, be at a) Market Value (no subsidy), b) a discount to market value (the so-called 'market subsidy'), or c) less than construction cost (aka loss-making). All 3 are in fact, acceptable, depending on what the purpose of the sale of the flat is and what the general populace feel the social aims of this subsidy should be and cost. Bear in mind, all subsidies come at a cost, either in increased taxes for everyone else or lost revenue (aka increased taxes). I am personally willing to bear higher personal income tax and GST so that first time flat dwellers and families get an easier access price point. Who's joining me in writing a petition letter to ask for that?
looks like is better to purchase old re-sale flats instead, at least some of the 4 rooms are still bigger than the newer ones.
tough times ahead...
Last edited by Simon_84; 21st July 2008 at 04:57 PM.
The first flats were built with real cost subsidies. The newer flats are now built with market subsidies.
In the past, flats were sold based on cost price. Now new flats are sold based on market subsidy, where market values of new flats are based on prices of "resale flats" in mature estates.
In the past, new flats were S$X. Resale flats were priced higher due to better location etc, hence S$X + S$Y, where S$Y is the resale premium.
Now, new flats are (S$X + S$Y) x market subsidy factor. Resale flats then are priced even higher because now you need to have ((S$X + S$Y) x market subsidy factor) + S$Z.
The premium in resale flats have shifted from S$Y, now to S$Z, and the old premium is already incorporated in the new flat's selling price.
Hence, over time, you can see an artificial upward price spiral
Last edited by vince123123; 21st July 2008 at 06:30 PM.
before IR is up & running we're already trying our luck (newbie) bidding for roofs our our heads!
game of chance + $$ = gambling
so back to e question of affordability. will today's students afford 1 (single or married) roof over their heads by e time they plan to buy?
projected inflation of (smallest) HDB unit vs projected income of low/middle income earners (single/combined)?
i dread to see that far ahead...
Is it only about affordability?
What about acceptability?
What is the true dollar value of an HDB Flat at year 60 or 70?
$300K housing loan - Is affordable.
Interest over 30 years = $125k
Is it still as affordable?
Are you earning $4.5k/month, and CPF along can take care of the housing loan?
If yes, you also have $0 in the ordinary account at the end of 30 years.
Total $425k to lease a flat for 99 years.
+ conservancy fee
+ Property tax
+ TV and Radio license fee.
Bukit Timah, Hume Ave. Freehold + fully furnished = $800k
When you buy a 40 year old resale flat, and stay in it for 30 years: Total 70 years.
Do you think you can still get a buyer after 70 years, when the banks usually don't lend when the lease is less than 30 years.
Also imagine, will a 30 year old you buy a 70 year old resale flat?
At the age of 60, where are you going to stay?
Last edited by Silence Sky; 22nd July 2008 at 01:03 AM.
Its instructive to read a ministerial statement from our friends up north in Hong Kong (ca. 2003);
"Last November, I delivered at this Council a statement on housing policy, repositioning the Special Administrative Region Government's housing policy and proposing a series of measures to deal with the serious imbalance of supply and demand in the property market, with a view to restoring the confidence of the public and investors. I would like to take this opportunity to brief Members on the latest situation concerning the supply of private flats. I would also wish to explain how we are going to implement and consolidate the relevant policies and measures on the basis of the prevailing housing policy.
Implementation of the Housing Policy
In the Statement on Housing Policy announced last year, I clarified that the Government's role was to provide subsidised rental housing for families in need, and that the Government would withdraw from the role of property developer by halting the production and sale of public subsidised flats, thereby minimising its intervention in the market. We must also maintain a fair and stable environment to enable the sustained and healthy development of the private property market. The public have in general considered that it is the right direction."
That a g-ment will continue to subsidise housing is not a given, in fact, in developed nations it is not very common. For a g-ment to house over 80% of the population in subsidised public housing (most of whom are owners by the way, not renters), is almost unheard of anywhere in the developed world.
So yes, there is an affordability issue for some of the lower income. However, not all flats are $300,000. If you are not too fussy, you can still get a roof over your head without busting the bank. If you are looking at a $800,000 condo in Hume, then sorry, buy it if you can afford it, but that is not an entitlement. Can they offer the flats at a lower price? Sure they can, rather easily since it doesn't actually 'cost' money (just land). But would it be responsible land use? As a taxpayer with a stake in property in Singapore, I'm not so sure.
For a forum that tends to rail against the 'nanny state', I find it rather amusing that so many forumers cry mummy when they want a hand-out. (and after they receive it, they call themselves indebtured servants)
Last edited by dkw; 22nd July 2008 at 09:05 AM.