I recall reading somewhere before that the building costs does not exceed S$100k per flat. Unable to further substantiate though.
when u can, they'll say thatz years ago...
I recall reading somewhere before that the building costs does not exceed S$100k per flat. Unable to further substantiate though.
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.
I suppose you're one of those who subscribe to the unique concept of "market subsidy" huh
Quoted from 'The Strait Time'
"HDB adopts a market-based pricing approach so as to reflect the true subsidy that buyers enjoy.
Under this approach, HDB determines the market value of the flat, based on its location, finish and other attributes. Then, it sells the flat at a discount to the market value.
HDB buyers understand this, and appreciate that new HDB flats are priced lower than resale flats.
Similarly, when they want to sell their flat in the open market, they do so at the prevailing market value, not at their cost of purchase of the flat.
We also wish to highlight that this approach has enabled HDB to continue to price its flats affordably despite the current sharp escalation in construction costs.
Currently, a new four-room flat can cost close to $300,000 to develop, taking into account land, building and other costs.
This is significantly higher than the subsidised price of a four-room flat in Punggol/Sengkang sold by HDB at about $200,000 to $260,000.
Through the market-subsidy approach to pricing, HDB has been able to keep its flats affordable for Singaporeans.
On average, first-time flat buyers need to pay only about 20 per cent of their monthly household income to service their housing loan.
This is well within the 25 to 30 per cent that is commonly cited internationally as the benchmark for affordable housing.
Lower-income households can enjoy additional help in the form of the Additional CPF Housing Grant.
Mr See commented that young couples have to wait as long as six years for new flats. This is incorrect.
New Build-To-Order flats take about three years to complete from time of registration.
Those with urgent housing needs can consider the resale market where there is a wide range of resale flats to match the preference and budget of buyers.
Eligible first-time buyers can also enjoy a CPF Housing Grant of $30,000/$40,000.
Kee Lay Cheng (Ms)
Deputy Director (Marketing & Projects)
for Director (Estate Administration & Property)
Housing & Development Board"
here we go again. 300k to develop.
unfortunately they can't release one of the official state secrets... the actual cost of building a hdb flat. else they have to kill us if they tell us.
this is not going to change as they have the 66.6 supporting them.
They don't have to tell you, its no big secret and easily derived! Simply, the cost of construction is far less than the sale price. But that is not the issue......
Not necessarily. The point is that IF the HDB were to build flats, and then put them on the open market subject to bidding, will the prices commanded be equal to merely the price of construction? The answer, very clearly, is 'no'. Therefore, the flat has a market value (mind you, I'm not talking about sale price, but VALUE) that exceeds the price of construction. Should a g-ment body, now in possession of a commodity/resource (the flat) that has a reasonable value, be cavalier about how it manages it, bearing in mind the limited land in Singapore?
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?
Sounds good? :bigeyes::bigeyes:
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
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...
I understand perfectly well if the government would choose to value land at super high prices. That would mean Singaporeans have to work hard to be able to afford housing. That in turn makes the economy strong.
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?
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?
Quoted from 'The Strait Time'
"HDB adopts a market-based pricing approach so as to reflect the true subsidy that buyers enjoy.
Under this approach, HDB determines the market value of the flat, based on its location, finish and other attributes. Then, it sells the flat at a discount to the market value.
HDB buyers understand this, and appreciate that new HDB flats are priced lower than resale flats.
Similarly, when they want to sell their flat in the open market, they do so at the prevailing market value, not at their cost of purchase of the flat.
We also wish to highlight that this approach has enabled HDB to continue to price its flats affordably despite the current sharp escalation in construction costs.
Currently, a new four-room flat can cost close to $300,000 to develop, taking into account land, building and other costs.
This is significantly higher than the subsidised price of a four-room flat in Punggol/Sengkang sold by HDB at about $200,000 to $260,000.
Through the market-subsidy approach to pricing, HDB has been able to keep its flats affordable for Singaporeans.
On average, first-time flat buyers need to pay only about 20 per cent of their monthly household income to service their housing loan.
This is well within the 25 to 30 per cent that is commonly cited internationally as the benchmark for affordable housing.
Lower-income households can enjoy additional help in the form of the Additional CPF Housing Grant.
Mr See commented that young couples have to wait as long as six years for new flats. This is incorrect.
New Build-To-Order flats take about three years to complete from time of registration.
Those with urgent housing needs can consider the resale market where there is a wide range of resale flats to match the preference and budget of buyers.
Eligible first-time buyers can also enjoy a CPF Housing Grant of $30,000/$40,000.
Kee Lay Cheng (Ms)
Deputy Director (Marketing & Projects)
for Director (Estate Administration & Property)
Housing & Development Board"