Sunday, December 07, 2008

HDB : More subprime than subprime USA.....

Leong Sze Hian made an outstanding speech about HDB at Hong Lim today:




Part 2 is here : [LINK]

Mr. Leong did quite a thorough job to explain the problems caused by HDB policies. I have just a few more points to add.

HDB sells the most expensive public housing in the world but stilll claims that it's flats are affordable. The default rate for HDB concessionary loans has escalated to 8% - this is higher than the 5% default rate in the US at the height of the subprime problem. When confronted with this grim statistic, the govt put the blame on Singaporeans saying they should only buy what they can afford . This is an insult to the intelligence of Singaporeans - the HDB has income ceilings to force Singaporeans to purchase bigger flats and they now turnaround to say people have been buying flats they can't afford.

In the 1980s, the CPF was liberalised for the purchase of private housing. This single rule change caused the price of private property to surge. Shortly after, the govt decided to liberalise the use of CPF for HDB flats. The property index went up from around 40 in 1986 to 180 in 1996 a surge of 450% in one decade outpacing the growth in household income. The use of CPF for housing caused a severe insufficiency in retirement funds for Singaporeans. The govt kept raising retirement age and asking people to work harder and longer to fix the shortfall. Last year the govt introduced compulsory annuities in the form of CPF Life. The point is we had serious problems during the "good times" because of bad policies and these are simply going to get worse as we move ahead. The 8% defauilt rate occurred before the mass retrenchments started and at the beginning of this recession.

In the 70s, when you bought a home, you pay for it in cash....settled on the spot...$30K for a landed private property....zero debt...and you slept well at night. Financing for home started to expand - housing loans started stretching from 10 years to 15 years to 25 years to 35 years. At the same time, job security disappeared over time and the income gap ballooned. This is a formula for disaster. A person is supposed to have uninterrupted and continuous employment for decades to service his housing loan....the high household debt makes the balance sheet Singaporean households very fragile. The problem gets worse with a large segment of the population whose income is actually stagnant or declining. Servicing a loan for 2 or 3 room flats at HDB's prices causes them to live under tremendous strain and misery.

These problems caused by bad policies have existed for a while. However, they are masked by the good times when Singaporeans held on hoping that the rising tide can lift them. The PAP govt's first reaction to the worsening situation is to blame Singaporeans for buying flats that they cannot afford. Given the govt sets the policies on how flats are priced, allocated, financed and sold to the public, such a claim is simply absurd.

60 comments:

Anonymous said...

HDB flats are cheap and highly subsidized, okay?

If a minister says so, it must be so.

A fool like yourself want to challenge PAP, is it?

You dare to call the minister a liar? Are you calling him a liar when he says HDB flats are affordable?

Sue lah! See who win in court? We got Davinder Singh. He has won practically every defamation lawsuit against PAP.

Anonymous said...

All the kangaroos in Singapore is simply no match for Mr Brown, Lucky Tan, Mr Wang, Molly Meek, Wayang Party, TOC etc. All it needs is just the truth to expose the scam practices of Singapore Inc.

Anonymous said...

It's really a myth to say that HDB public housing are subsidised. If it is really subsidised, the Authorities would simply not have to resort to using market values alone to support their arguments basing on some "artificial value" to accrue for the land cost.

The next question would be how much value do our Govt assign to the land cost when they set the prices of HDB housing. IMHO, it should be zero or just a nominal value since it is said to be subsidised and that it would have cost our Govt next to nothing. But since our Govt do not have the guts to reveal the actual costs to us, it can only think it is only their best excuse to use the 'market value subsidy' to support their HDB pricing policy.

Definitely not the other way round with what our Govt is saying that it is subsidised just because you cannot get to buy such prices for private housing.

Afterall, what else can we expect from a profit-orientated Govt especially when the facts tell us their business is do make as much profit as possible so that they can pay themselves higher salaries!

Anonymous said...

The land cost is actually very little. If you were old enough to had spent your childhood in a kampung, you would have known that the government used the Land Acquisition Act to forcibly acquire your kampung home for a pittance. I have known of families who once owned enough land to build a bungalow. Today, they live in tiny 4-room flats, thanks to the Land Acquisition Act.

It is ridiculous to even factor in 'land cost', when the land didn't cost the government much to acquire back in the 1960s and 1970s.

Anonymous said...

HDB is an expensive 99-year rental. IMHO, the last 2 years' prices are propped up by massive PRs numbers and rules that recognise residential "purchases" as part of the $$$ going towards "buying" a Singapore citizenship.

The "growth" is to prop up the GDP to which the MIWs million-$ pay are tied.

p.s. Anon at 11:51 AM is right. Thanks to the Land Acquisition Act, land actually cost only a pittance. So the billions of "wealth" claimed to be build up by the present PAP govt is actually from...?

Anonymous said...

Thats some shocking statistics! PAP created such a massive problem through their "ASSet Enhancement Programme", now its very difficult if not impossible to bring the price of HDB flats down without 'resetting the system'.

With prices escalating through the roof in just 2 decades coupled with stagnating income, anyone wonder why singles remain single and married couples can't afford to have children?

Anonymous said...

these people here are playing a VERY DANGEROUS game here. they are rousing discontent between owners and non owners of homes.

if the authorities are"quiet" on this is because...they know these idiots are committing political suicide!

walk right in.....:)

Anonymous said...

...The TRUTH will set you FREE!...And let the show begins...

Cheers

Economist with a Heart :)

ps - Hold on to your seat belts people.

Anonymous said...

We are in constant fear of being repl by FTs beca their pay can be very low yet survive.
On the other hand, we can't survive bec the HDB prices kept on increasing!!!
It is a catch-22 situation!!! Anyone can help???

Anonymous said...

To Anon at 5:23 PM

What makes u think that it is a DANGEROUS GAME to comment on our bad Govt policies ?

If u are a planted PAP agent, I would see it as a veiled attempt to silence critics.

So is this going to be a THREAT ?

Anonymous said...

i could not have agree more to this, 240k for a 4-room flat lol. when i wanted just a 3 -rm. lol

Jim said...

First, they say HDB is subsidized. Later people found out that the cost of building the flat is actually lower than its selling price.

Then they invent a new word "market subsidy" which is a mark down of market price. So it is actually a discount! You don't say that the retail store offering 30% markdown is subsidizing you, do you?

This continued liberal use of the word subsidy serves to fool the people into thinking the PAP government cares for us.

Till today, we still have many peasants saying PAP very good, everything subsidize. That's why PAP are able to garner many votes.

Please examine the "subsidies" that you receive and tell me if they are real or exaggerated.

Anonymous said...

The only real costs of building a HDB flat is the land developement and actual building of the flat (construction, architecture, electrical and mechanical wiring).

What other cost is there to jack up the price of the flat?

Land didn't cost the government much. Most of the land was acquired by the Land Acquisition Act at way below market price. People were just forced to give up big tracts of land for a pigeon hole that didn't have a lift that stopped on every floor.

What is the basis for even charging $350,000 for a 5-room flat? Just because some retards actually think it is a bargain?

I wouldn't be surprised if the actual cost of a HDB flat, inclusive of all costs, is between $50 - $70k only. Maybe even less.

How the hell does a family earning around $3000 a month, pay off a flat that costs around $200k to $300k?

Jim said...

Let me expose some of the so called "subsidies" we are receiving.

Tertiary Education:
Poly. According to the polytechnics, the full fees for an academic year is $19k. Students pay only $2k.

Can this be possible? At $19k a year, it is even more expensive than a bachelor's degree in Australia!

Local University. A "subsidized" academic year costs about $7k. So for 3 years of study, the total cost is $21k.

A non-subsidized degree course at SIM? $19k.

Jim said...

Minister says that HDB made a loss of $590 million last year. Even though our tiny HDB costs $200k to $600k and they have a monopoly of the market.

If this is true, heads must roll at HDB because they are clearly not cost-effective and very poor in managing money.

Of course this is not true. It is a case of transferring money from the pockets of HDB to Land Office. If they want to, they can even record a loss of $10billion even with $2million HDB flats. Simply get the Land Office to jack up the land prices they sell to HDB.

dennis said...

I am sad that my family is part of this subprime crisis. And the only solution currently is to marry my girlfriend so that my family have to sell the HDB to me and my girlfriend.

Yay, then we won't be part of the 33,000 in 3 months arrears anymore. Until a time when either me or my girlfriend go jobless, then we shall think of a solution again.

And I wonder why my girlfriend is so mad about the idea.

Anonymous said...

HDB may had made a loss because it is forced to buy land from the government at "market price", a price which the government did not pay to acquire the land in the first place.

HDB loses money, the government will give it money to keep running. HDB loses money, but still has the money to build a massive HDB hub in Toa Payoh.

It seems that the waters are easily muddied the moment a layer is created from the direct buyer of land & home to the direct seller of the land and home (govt).
The layer is called HDB!

Nobody in their right mind makes a distinction between govt and HDB. I wonder why the govt insists on doing so?

Anonymous said...

so scary, so many people cannot afford to pay their HDB loan!!!
Last time the jobs are more secure, now is quite diff.
There are so many FTs queueing up to repl you.
A person earning $5,000 - $6,000 5,6 years ago may be doing part-time odd jobs earing $500-$600 per month (if he is over 50s).
How??

Onlooker said...

Summary.
A bottomless pit.

Anonymous said...

Ship Singaporean families to China, Malaysia. The breadwinner will stay in Singapore to work. Share a flat with other Singaporeans, live like the foreign workers.

I think this is the only way Singaporeans can compete on cost.

facts actually said...

I would say that the flats in Singapore are reasonably priced although I can’t confirm its affordability as it varies from different households.

Taking cost of land to be almost negligible, due to the high cost of local construction, approx S$150psf – S$180psf excluding other running costs and overheads, it will cost about S$180,000 - S$234,000 for a typical 4-rm flat (approx 1000sqft) and a 5-rm flat (approx 1300sqft) respectively. Compared to other Asian countries whereby costs are relatively much lower, ranging as low as S$40psf - S$80psf. Hence it will seem that our price of public housing seem overly inflated and ‘unaffordable’. Of course you may argue that even in the Western countries whereby costs of construction are comparable if not higher, public housing are still relatively much cheaper. Yes, this is because they ARE HIGHLY SUBSIDISED by the government. So why isn’t our government doing so??!!

Simplistically, SUBSIDIES are from TAXES (personal and corporate). If you do a quick comparison of our local tax rates (http://en.wikipedia.org/wiki/Taxation_in_Singapore) against other countries (http://en.wikipedia.org/wiki/Image:Income_Taxes_By_Country.svg) it should give you a fairly clear picture. Our local govt has taken a different approach to our taxation system compared to other developed countries. With lower personal tax rates, it gives the individual a relatively higher disposable income and also more freedom and responsibility to manage their income. Lower corporate taxes make it more attractive for both local companies and foreign companies to invest in SG. Basically, focusing on the development of economy, by lowering cost of operation, providing higher employment rates. Higher subsidies, with lower disposable income and maybe having problems getting a job, or low subsides with higher disposable income and higher chance of being employed? Which would you prefer?

As to the issue of affordability, I think that the govt could give more thought to the assessment of household income, maybe something more comprehensive based on the demographics eg. household income per head to provide additional subsidy accordingly to address the minority with genuine financial problems. As for the 8% who have defaulted on the monthly loans, it will be necessary to look into their profiles before we come to anything conclusive. Are they the ones with low income or those who may have mismanaged their personal funds? The figure is too arbitrary for any assumptions.

However, my only grouse and regret is that the govt has allowed the property prices to float freely with the market forces. This resulted in a speculative nature of the property market and hence the steep escalation of prices within a short span of time. Many have capitalised from the current high property prices but this has also impinged upon, a long term and maybe even irreversible adverse effect, both the individual as well as the overall growth of the economy. This adds on to a higher cost of living and operations, hence higher labour costs and the cycle continues spiraling.

If it is within my means, I would regulate the price of property prices. However, this will probably take decades and many individuals will suffer from the downward price regulation of real estate. Will we be willing to bite the bullet for long term affordable cost of living? This is probably the same deliberation of the govt.

No, I am not a civil servant, and definitely not from IRAS or HDB.

Anonymous said...

2009 will see the first $1 million HDB flats debut build by private developers.

Simple reason is property deflation is never an option since this is the only bullish asset singapore has in valuation. If HDB property price ever go south again, it means GDP rate will drop + another rate cut to million dollar salary earn by the finest breed of elites, it will never happen, let wait for Mr Mah to address the nation come next sitting.

Simple logic - do you think price for public transportation will go down even oil price had come down 2/3 percent?

Anonymous said...

Anon 2:23 am

I am wondering how you assumed that the cost of a flat can be so high - in the $180k - $220k region.

Most HDB flats are pre-fabricated; factory made. They are just mere hollow rectangular blocks made in the factory, and then assembled together on the construction site. Anything that is factory made is usually cheap. The only thing that isn't factory-made is the piling works.

Your HDB flat is made of concrete and steel; not gold or ivory. The average construction worker is also at the bottom of the salary hierachy. So, I don't think a typical HDB flat would cost more than $70k to build, even if you throw in other related construction costs.

Given how squirmish HDB also has been on revealing the actual cost of a HDB flat, I suspect that they are reluctant to tell you how cheap it actually is to build a high quality flat.

Anonymous said...

HDB per 5 room unit cost is unlikely to be over 50k. Keeping Sporeans in debt is a good way to control them.

facts actually said...

anon 3:59
Property price is split into 2 main components, land cost and construction cost.

In the case of HDB, land cost is almost negligible, and rightfully so since it’s the only form of ‘subsidy’ the Govt can offer. The HDB price will only move downwards with the lowering of the cost of construction. And one way is to lower cost of production hence living, as the labour cost in Singapore is relatively high. Home mortgages for the locals are the biggest ticket item in their list. Until we address this issue, our cost of living and cost will always remain high, with a Catch-22 situation. If we do tackle the problem by the root, we may be able to reverse the situation.

Seriously, I don’t think our Govt makes much money from building HDB flats la… It is definitely not the main composite of our GDP as well. Mr Mah won’t be too concern lor…

As for the transportation cost, if our cost of living can be lowered (via lowered housing cost) maybe our cost of public transport may one day be adjusted favourably as well =)

Not only that, with overall lowered cost of living, cost of operation and production locally will also be lowered. This will make it more viable for our local entrepreneurs as well as foreign investors. In the long run, this could be a solution although a painful one. It really depends how the Govt handles it with tact and tenacity.

facts actually said...

Anon 7:15am

“I am wondering how you assumed that the cost of a flat can be so high - in the $180k - $220k region.”

I happen to be fairly familiar with construction costs…

“Most HDB flats are pre-fabricated; factory made. They are just mere hollow rectangular blocks made in the factory, and then assembled together on the construction site. Anything that is factory made is usually cheap. The only thing that isn't factory-made is the piling works.”

Not totally true. Pre-fab just means fast and not necessarily significantly cheaper. There are also other trades which not off-site ie. M&E works, sanitary and plumbing, finishes etc.


“Your HDB flat is made of concrete and steel; not gold or ivory. The average construction worker is also at the bottom of the salary hierachy. So, I don't think a typical HDB flat would cost more than $70k to build, even if you throw in other related construction costs.”

By the way, cost of sand, concrete, copper and steel has risen a few folds over the couple of years. Construction workers are not cheap at all… On the average, a foreign worker earns about $1,500 - $2,200 per month. But of course super long hours la… If you do remember, some time back last year, it was published on the papers that our crane-operators actually earn a whopping $8k per month! (incl. of OT)

“Given how squirmish HDB also has been on revealing the actual cost of a HDB flat, I suspect that they are reluctant to tell you how cheap it actually is to build a high quality flat”

If you are really curious to have an idea on the cost of a flat unit, it’s not that difficult either. The tender price is usually announced when the main contractor is awarded the job. Sometimes it’s even on TV. Look out for it and do a quick calculation! =)

Anonymous said...

Hello Anon 2:23AM,

Honestly I really think you are from the civil "servant" (what a misnomer in sg context hahaha).

You mentioned about lower personal tax rates but lower for whom?? You don't want to mention about the lower tax rates for the multimillionaires right?? No progressive tax at all from $300k onwards. WHY???? Is $300k, $3M and $30M the same? Is Gifted stream, normal stream and ITE the same?

Why no capital gains tax? No wonder there is so much speculation in Sg. So rich people can have more money to punt in SGX right?

Who suffers the increase in GST?? The rich?

who suffers the increase in ERP?? The rich?

Who suffers from expensive public housing?? The rich?

Who suffers from expensive medical services? My friend's father passed away due to cancer and the cost to her family is more than $100,000. Every moth the family pays by installment.

My colleague's wife has lupus and the drug is $600 per month. Expensive drugs are NOT subsidized. Many Singaporeans think medication is subsidized but they only found out that is NOT TRUE when they fall seriously ill. Something generic like Panadol then subsidized.

My friend went to poly borrowing his mom's CPF. Any govt aganecy help him? NO.

My friend went to NUS taking OCBC study loan. Any govt agency help him? NO.

So Anon 2.23AM you mention about Singapore taking a different approach to taxes compared to other developed nations but the end result which citizens can more value for money for the taxes they pay?

Japan - there is unemployed benefits after 6 months if you can't find a job.

US - single parents received help for their children.

UK - free medication even for foreign students. ALL Uni students received govt loans. Foreign students pay at least 6 times what the British citizens pay.

Sweden - Free education, even going to Australia to study in Uni is FREE.

So Anon 2:23AM, if Singapore economic policies are WORLD CLASS why are Singaporeans leaving for good by the bus loads every year??

Ordinary and poor Singaporeans pay the so called "LOW" tax rates but what do they get in return actually?? Street lighting? Public servants to enjoy business class in SIA? Public servants to enjoy 4-5 star hotels during overseas meeting?

So make no mistake, Majority of Singaporeans might not have a 1st Class Economics degree form Oxford or Cambridge or whatever but they certainly understand the burden of failed economic policies.

So Anon 2:23AM please give some respect to fellow Singaporeans before you spout your STUPID economic comparisons with other developed countries using Wiki.

Cheers & Have a nice day

Economist with a Heart :)

ArtBoon said...

HDB is expensive. I cannot afford it now.

Anonymous said...

To Anon 7:15am : "On the average, a foreign worker earns about $1,500 - $2,200 per month"

While I may agree to your argument that labour costs are not cheap, but do you know that out of every foreign worker, a big chunk of it goes to the Govt in the form of foreign worker levies. At one time it can costs a contractor S$450 to pay to the Govt for each worker that they brings in. I'm sure many bosses of construction companies can vouch for this.

So may I ask who is the biggest culprit in jacking up our construction costs ? Or to be exact, who is one that benefits the most from cutting a pound of meat from each worker monthly.

The culprit is our Govt and the direct benefiaries are our Ministers enjoying their Million Dollar salaries. They will tell you it's not that simple!

Anonymous said...

Life goes on. The roads are still full of cars, the restaurants are still filled with people, the buses and MRT are still packed, the streets are still peaceful, there is still no credible alternative party, so what's the problem?

pumpkin said...

In the earlier years, HDB and its predecessor built really subsidised low cost housing for the poor and needy. Over the years, its mission has evolved to building affordable housing priced slightly lower than resale flats in the vicinity.There is no real subsidy at all. Just a slight discount from the market prices. HDB flats are no longer affordable as seen from the official arrears level of 8%.This arrears level do not take into account the various assistance and instalment schemes HDB put in the help those who cannot keep up the instalment payments. If the assistance/defer payments figures are included in the arrears level, the true arrear level could easily be double the 8% level given!

facts actually said...

anon 11.54am

"Honestly I really think you are from the civil "servant" (what a misnomer in sg context hahaha)."

Civil service is or rather should be a sacred and higher calling. As of today, I have still not decided to forgo my level of comfort to respond to this call, at least for now.
I’m not a 1st class honours scholar so can’t qualify as well =(


"You mentioned about lower personal tax rates but lower for whom?? You don't want to mention about the lower tax rates for the multimillionaires right?? No progressive tax at all from $300k onwards. WHY???? Is $300k, $3M and $30M the same? Is Gifted stream, normal stream and ITE the same?"

Yes, we do practice progressive tax, but I agree maybe not progressed extensively. Although the percentile of the people earning more than 3M is very very small, I would still think that they should be taxed progressively, accordingly.

”Why no capital gains tax? No wonder there is so much speculation in Sg. So rich people can have more money to punt in SGX right?”

Not sure if you do remember, quite some time back when the Govt imposed capital gain tax to curb speculation. This caused the whole property market to slump with much adverse effect on the overall economy. It was only after it was lifted that the market was restored. Although my reservation will be if that a total lift is the best solution to stimulate the market.

"Who suffers the increase in GST?? The rich?"

Inevitable and necessary evil. I have shared my theory of GST to many skeptics who have concurred subsequently as well. Too lengthy to elaborate on the net.

"who suffers the increase in ERP?? The rich?"

Curses to gantries… This one I really can’t figure out.

"Who suffers from expensive public housing?? The rich?"
Like I said, relatively inexpensive.

I must agree that our local Health Care is one area that has not been further developed comparatively, to address extensively. I am sorry that so many around you have suffered due to the inadequacies of the system.

I wouldn’t dare say that I have a comprehensive idea of all the subsidies and benefits provided worldwide but maybe a gist of it.

Education is generally not exorbitant locally and fairly affordable although it may be a burden to some. I have not come across anyone who has complained about high local education cost and at least no one's making it an issue at Hong Lim yet la.

I don’t think that our Govt has just provided us with street lightings. After traveling round the Asia region, I really thank God for my living conditions in SG!!!

Seriously, it is a fallacy that the public sector pays that well, generally. Of course there is a certain group who draws unjustifiable salaries which I have an issue with. Maybe not that they are not worth that much but rather, we are talking about serving the nation. When we choose to serve, we cannot expect market rates. Yes, it is a sacrifice to a higher calling. Something even I have not come to terms with.

”So Anon 2:23AM, if Singapore economic policies are WORLD CLASS why are Singaporeans leaving for good by the bus loads every year??”

Bus loads come, bus loads go. It’s all up to the individual.

There will always be room for improvement. But who will be the stayers and who will be the nay-sayers? Who chooses to stand by the country to go through the stages of development, politically, socially and economically?

I love my people, my nation and am definitely staying put for a long time to come.

Anonymous said...

I never understand why a "cheaply built"( low in relative term) branded watch can cost hundreds of thousands. likewise, a painting.

Maybe because it is....unique? HAHAHAHAHA

Anonymous said...

while I agree that property prices are inflated. reversing the deal is not so easy. I am no economist but I deduced by logic if HDB were to lower their price to reflect true value of subsidized housing it will cause the property to plunge. Private developers might take a beating and our economy which is artifically boosted by money from CPF suddenly disappears because now people don't need to use those money to buy a house.

2nd problem I see is our GICs and Temasek will be in trouble. My guess is they rely heavily on the income from our HDB and CPF. If the funds vaporise all of a sudden I am not sure how is it going to affect the liquidity of goverments funds.

However not getting the solution for this will also be disastrous, because it didn't looked sustainable. Just a gut feel.

I think the government needs to be more creative in their thinking. It sounds to be that their formula is economic growth = survival. If we don't have this economic might be are doom to sink. I think it is true to a certain extent but I also think that there needs to be a balance.


Singapore probably don't build on fundamentals and are always looking for short cuts and the shortest time to grow. Instead of cultivating talents they buy talents.

I probably went off tangent quite a bit, but back to the original point. It is not that I disagree with you, just that the reversal fo the policies now requires more than our million dollar man's minds to handle.

palmist

Anonymous said...

we will return to third world status LOL

Anonymous said...

i have a suspicion hdb resale values are propped up by 'appointed' valuers. in this current market, sellers are asking for sale price below 'value'.

Anonymous said...

2009 will golden age of HDB transaction, all URA masterplan 2008 project to revamp of Jurong, Kallang plan etc. will mark up HDB property price.

Simple - with URA billion dollar masterplan, I am sure HDB property in these areas will be price at new high of S$1 million for an executive flat.

Anonymous said...

Once u are over 45, yr papers become useless.
If u loss yr job, it wld be diff for u to find a job that is more than $1,500.
But prices kept on increasing. How???

Anonymous said...

good good. my parents flat there so boom boom. LOL.

praise clever pap. LOL.

Anonymous said...

at this stage, can anyone or gov or hdb suggest options to lower the selling price of hdb without devaluing the property market?

kelvintan73 said...

Hi Lucky Tan,

If you want an economic perspective on this issue, you may take a look at my blog entry here

http://kelvintan73.livejournal.com/107265.html

Anonymous said...

"While I agree that property prices are inflated. reversing the deal is not so easy. I am no economist but I deduced by logic if HDB were to lower their price to reflect true value of subsidized housing it will cause the property to plunge. Private developers might take a beating and our economy which is artifically boosted by money from CPF suddenly disappears because now people don't need to use those money to buy a house."

And this is a bad thing how?
You yourself recognized that the situation is artificial.

If I do not have to spend so much money just to get a roof over my head, I could put up with lower wages. I can also feel more secure and spend more on other consumer goods.

Anonymous said...

And this is a bad thing how?
You yourself recognized that the situation is artificial.

If I do not have to spend so much money just to get a roof over my head, I could put up with lower wages. I can also feel more secure and spend more on other consumer goods.


if adjusting the HDB prices could cause a collapse in the property market then it is a bad thing.

This has to be managed properly.

You are only looking at affordability. Have you thought of people who bought at a high price and suddenly faced with plunging property prices.

In certain scenarios they could be forced to pay back a large part of the loan which will lead to forclousure if they are unable to fork out the money. Would this be a good scenario for singaporean.s

Plus if property prices collapses a lot of related industry like construction will be affected.

Of course all these are just my foolish speculations with no substantiated studies. I would love to hear from wise sage from cyber space on how we could adjust the HDB prices without damaging the property market

Anonymous said...

hi anon 12.07am I agree with you that the problems we are facing are not easy to solve but solved it, we must.

I believed the high price of HDBs will be maintained for years to come (near future) by the influx of foreigners becoming citizens or PRs.

I hope we as a nation will find the answer to this puzzle even though we might have to compromise on certain things.

Hi anon 2.27pm,

I wasnt talking about capital gain tax on property. I was talking about capital gain tax on securities.

You said "I don’t think that our Govt has just provided us with street lightings. After traveling round the Asia region, I really thank God for my living conditions in SG!!! "

FYI anon 2.27pm, our GDP is on par with Spain and Italy. 2nd richest country in asia after japan. So why would you want to compare Sg with other poor countries in Asia? If you want Sg to improve you must compare Sg with european countries, Japan and Australia.

When Singapore citizens find out one day that other developed countries enjoys more value for money on their taxes they will understand that democracy is the key to a successful economy.

Singapore's democracy is broken and soon will the economy too.

Cheers

Economist with a Heart :)

Anonymous said...

No economic growth means Dead!
Japan can go on and on for 18 years with 1-2% growth, try that in Singapore and PAP will be throw out!

Since 1998 to 2003= Singapore GDP was Stagnant and there are 3 recessions in 5 years, very bad property slump 40% from peak.

Only in the last four years you see good growth and property reaches the peak again.

2007= 1997 price! for HDB and Private Property.
2008= drop 10 to 15% for private and HDB is trying to maintain the valuation.

2009=another 10 to 15 percentage, will bring us to 2005.
2010=not recover, you will see 2003 price again, but private property is the first to go.

So over 13 years from 1997 to 2010
Property goes from peak to slump
peak and slump again.
I see we will have slow growth and by 2017, 20 years from the peak, we are getting the same price again.

So my friend, If you buy at 1997, you will get the same price in 2007,
than slump in 3 years to 2003 price
than slow growth and final peak again in 2017=

To each, HDB and private, no growth at all!

If you borrow to buy your HDB, god bless.

I have a friend who bought at the peak = Yishun E-flat=600K
today=400K
10 years from now may be 600K
So For 20 years =No growth,
Borrow=300K and still have not pay finish after 20 years.

very scary.

Only good location in Bishan, toa Payoh and Holland and Bukit marah you will change, the rest are simply over price!

the rest of HDB can say bye , bye buying resale is dead end. That why we allow PR to buy, they are new sucker. Singaporean are better of buying new flats in Punggol. Do not ever can into 500 to 600K HDB, they are touching the private flats and sure to be dead.

Conculsion

1. 1997=HDB overprice
2. 2007= HDB correct price
3. 2010= HDB goes down and stagnant
4. 2017= HDB will be just right.

But, they are all 99 years. They are not your house,

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