How HDB flats are priced affordably !

[dkw]

More like, because

a. it's too embarrassing;

b. I'll lose a lot of votes if it gets out

c. You are not entitled to know how much I really make, despite the fact that I am using public money to build flats

d. I have enough votes in Parliament I don't have to give a damn

e. Why should I tell you?

So its the style and not the substance you are in disagreement with then? You don't disagree that a real subsidy then?

 

[dkw]

As usual for such threads, the positions of the chief protagonists are all over the shop, and morph as the thread lengthens. Some say its an issue with how HDB calculates it subsidy, some say that its an issue with PR and marketing, some say its about affordability. Since its pretty trying to battle a multi-headed hydra.........ask yourself, WHAT exactly are you unhappy with?

If you have an issue with affordability, you have my sympathies, HDB should do more for poor couples.

If you have an issue with what is called a subsidy, go apply a real life market value test for any of your possessions and see how it correlates with its cost of manufacture.

If you have an issue with style, write in to the HDB and tell them to sharpen up their PR, posting here isn't going to help.

Over and Out!

 

[zcf]

For arguments sake, if a flat were to be going for $1000, and HBD were 'making' $500 from it, how much noise would there be? Very little, I suspect.

What make you so sure about very little noise if public find out if HDB earn 50% or may be even more margin oon HDB flat??? I would think that a lot of people would like to know where did the profit go to? e.g. public funding, minister pay etc....

 

[dkw]

What make you so sure about very little noise if public find out if HDB earn 50% or may be even more margin oon HDB flat??? I would think that a lot of people would like to know where did the profit go to? e.g. public funding, minister pay etc....

Please take that discussion in its entirety and not pick on a single statement out of context.

 

[vince123123]

I hope you are aware that HDB has rules on when you can sell your flat after you bought it.

If someone sold me a private apartment at less than market value, and I turned it around the next day and sold at a 20% profit, it is real money in the pocket. The previous owner has effectively subsidised my 'flat'.

 

[vince123123]

Yup, agreed.

What make you so sure about very little noise if public find out if HDB earn 50% or may be even more margin oon HDB flat??? I would think that a lot of people would like to know where did the profit go to? e.g. public funding, minister pay etc....

 

[sORe-EyEz]

in e end if a couple (not single) needs more than a decade to pay off the loan then its not that affordable isn't it? taking into account if a marriage can last that long...

 

[kitkat]

Yes , HDB flats are no longer affordable. Lots of couples that I know , are putting off marriage due to this. Personally , I myself feel a huge pain in it too . :thumbsd:

 

[waileong]

1. For the so-called "subsidy", HDB imposes onerous conditions on the buyers (min occupation period, racial quotas, who you can rent your flats to, etc). If a private developer were to impose the same conditions on its buyers, I'm pretty sure they would have to price their condos at a substantial "discount" to the market price.

So I view HDB's so-called subsidy as a compensation for my acceptance of their onerous conditions rather than a "subsidy".

2. How does really subsidising HDB flats distort the market? Because if such actions will completely distort the market, then subsidies cannot be justified at all, since the functioning of a market economy will be impaired. Yey the govt subsidises education (from primary school thru NUS/NTU) and healthcare. Have the healthcare and education markets been completely distorted? Do you see prices in the private education sector, clinics and hospitals collapsing because of govt schools, clinics and hospitals.

3. How does the govt prevent people from being cheated by selling items at market price? How does selling things below market price to citizens who fulfill a particular criteria rob all future Singaporeans? Because if it does, then what the govt did many years ago, when they sold flats at a real subsidy to get poor Singaporeans to move from the kampongs to HDB flats, must have been a real terrible mistake that shortchanged you and cheated you and wronged you.

4. You claim that I can realise my "subsidy" by turning it around and making a 20% profit. Ha! Why don't you try that? HDB will tell you to come back in 5 years, minimum. And suppose the market falls in 5 years, I don't make any money when I sell-- so where is my so-called "subsidy"? I take the risk, right? But you, Mr HDB, have already made a profit on your sale to me.

So where is the so-called "subsidy"?

5. You may think that it's a good idea for govt agencies to make profits. I don't agree. The purpose of government is to provide services (security, education, defence, healthcare, etc.) for the people. To provide services, they have to raise revenues in the form of taxes. Govt revenues (whether from taxes, sale of land, investments, etc) are thus meant to cover the cost of providing services to the people, not to raise huge profits for the govt.

Taxes and other government fees and charges (incl. HDB flat prices) are a burden on the people, but a necessary one, so that the govt can function. This is an issue in mature democracies, where in fact many countries strive to balance the budget because tax revenues aren't sufficient.

Making profits in government, particularly huge profits, has been sold by our media as a wonderful thing because it adds to our "national" surpluses. Well, that's good propaganda, but the reality is that we are paying too much for our government services.

The principle is that a govt should strive for a balanced budget, so that it does not have to borrow, but neither does it have to over-burden the people.

Lets get this clear-- the govt should not make big profits, neither should it make huge losses. Anything else is cheating the people. The former is cheating the present generation, the latter is cheating the future generation.


6. On transparency, it's very simple. When asked to state the cost of constructing a flat, state it. No ifs, no buts, no "it's not relevant to the pricing of a flat", no making a state secret of it. Why so evasive, Mr HDB?

It is because the HDB is a the largest custodian of the nation's land bank, that I expect them to act responsibly in that custodial duty, not only for the behalf of present HDB dwellers, but ALL Singaporeans, present and future. To what purpose does it serve the public good if the HDB were to completely distort the property market by severely under-pricing the sale price of flats? If the return on the land is not optimised properly (i.e. paid fair value for), then taxpayers like you and me are being cheated. Geddit?

It is exactly because HDB is being funded by public money (btw, most HDB flat dwellers do not pay income tax, or very little), that they have a responsibility to use those funds in a fair and proper manner. I expect it. I expect the HDB not to shortchange the taxpayers and future generations by giving away valuable land at steep discounts just for the sake of appeasing present flat buyers. I don't just expect it, I demand it.

Costs? You tell me, what are the components of that cost that you so wish to see? Is the open market value of the land not also part of that cost? If I built a block of flats in Yishun and built the same block in Orchard Road, what is the 'cost' of that flat? The construction cost? That should roughly be the same, shouldn't it? But would HDB sell both flats at the same price? Of course not! There is a MARKET VALUE to the location of the flat. If HDB were to sell both flats at the same price, would the person buying the Orchard Road flat not be getting a larger subsidy than the one in Yishun? So the 'costs' incorporate the market value of the land/location, which is what HDB has been saying all along. It prices it flats according to market value, a completely transparent statement and without any smoke whatsoever.

Using the example above, don't tell me its a 'fake' subsidy. If someone sold me a private apartment at less than market value, and I turned it around the next day and sold at a 20% profit, it is real money in the pocket. The previous owner has effectively subsidised my 'flat'.

HDB makes a profit? To what end? First off, I have no issue with public bodies generating surpluses. If they were loss-making and eating up public funds, THEN I would be really upset. Next, whatever revenue they generate goes back into that big pot called g-ment reserves. You can argue back and forth what the size of that reserve should be, but that is beyond this discussion.

At the end of the day, there is all this talk about 'transparency', as if the HDB were hiding something. You'd be wondering why our public servants were scratching their heads about what else they really needed to do, since they had already repeatedly stated that the "cost" is the MARKET VALUE. It cost the g-ment (and taxpayers) that amount to build and locate that flat in that place, which had otherwise been sold to a private developer, would have gained the g-ment (and taxpayers) that amount of revenue. It is an opportunity forgone (opportunity cost) when the g-ment (on behalf of citizens and taxpayers) uses a piece of land for public housing and sells it for less than market value, rather than selling it to a private developer.

A) It is a real subsidy

B) As I see it, HDB is about as transparent about this as they can be

C) I agree there is an affordability issue

 

[vince123123]

Waileong *clap clap* - it's nice to read these thoughts as they are elucidated much better than I could ever have done

 

[dkw]

Hilarious really

Anyhow, I'm not aiming to convert the heathen, history and psychology have shown it is mostly an exercise in futility. However, if you are the neutral observer, hope you have at least an alternate view to the knee-jerk anti g-ment sentiment that pervades.

Cheers

 

[sORe-EyEz]

only those not affected are laughing?

who's behind e hydra?! :bsmilie:

 

[hazmee]

S$300,000 for a resale 4 room flat at Clementi... that's only half a peanut. No sweat. 30 years 'hutang', plus interest... no problem. That's quite cheap! Thank you HDB!

 

[kitkat]

S$300,000 for a resale 4 room flat at Clementi... that's only half a peanut. No sweat. 30 years 'hutang', plus interest... no problem. That's quite cheap! Thank you HDB!

That is what make Singapore so expensive .... moving towards the way of HK.

 

[hazmee]

That is what make Singapore so expensive .... moving towards the way of HK.

But HK sells camera far cheaper than SG. So with the affordable housing pricing in SG, would the pricing for cameras drop as well? :kiss:

 

[kitkat]

But HK sells camera far cheaper than SG. So with the affordable housing pricing in SG, would the pricing for cameras drop as well? :kiss:

"Affordable" you mean ? HDB Housings are seldom affordable, they are just very long stretch of loans that tie you down.

 

[moriarty]

Hilarious really

Anyhow, I'm not aiming to convert the heathen, history and psychology have shown it is mostly an exercise in futility. However, if you are the neutral observer, hope you have at least an alternate view to the knee-jerk anti g-ment sentiment that pervades.

Cheers

Just curious as to what you found so hilarious. And where exactly did you see "knee-jerk anti g-ment sentiment" pervading in the 6 points that Waileong put forth?

Aside point, could you think of any logical argument as to why the construction cost should not be stated? Construction cost would, of course, include the land cost so that the Orchard flats are more expensive than the Ulu flats.

 

[vince123123]

Looks like he has chosen to cop out instead.

Its his choice actually, as it stands Wai Leong's points are therefore deemed unrebutted by him

Just curious as to what you found so hilarious. And where exactly did you see "knee-jerk anti g-ment sentiment" pervading in the 6 points that Waileong put forth?

Aside point, could you think of any logical argument as to why the construction cost should not be stated? Construction cost would, of course, include the land cost so that the Orchard flats are more expensive than the Ulu flats.

 

[dkw]

Looks like he has chosen to cop out instead.

Its his choice actually, as it stands Wai Leong's points are therefore deemed unrebutted by him

Vince, I suggest you don't make it personal. Neither you nor waileong have rebutted to any substantial degree any of my main points.

 

[hazmee]

Ok guys relax. No need to get personal. If HDB says is affordable, then only time will tell if those words hold any water. I'll see you in 30 years time when my money is all gone paying for my flat. LOL!