Monday, April 13, 2009

That $658K HDB Flat.....

One of my colleagues booked a Queensway 5 room flat for $560K from HDB. I guess the HDB lives up to its "market subsidy" policy. Well, the market now is something like $600+K for flats in that area - regardless of recession. Around the island, price have softened but are not exactly cheap.

So the situation is like this....Singaporean workers who incur one of the highest cost of living in Asia are expected to compete against their counterparts in China, India, Malaysia, Korea etc. The only way to do this is for a large segment of the populace to work hard, live poorly and continue to accept low wages as cost of living goes up. In places like Japan and S. Korea, there is a practical option for the people to move out of places like Tokyo & Seoul where the cost of living is unbearable to the other prefectures where life is a lot better for many...

.... in Singapore, you have only one option...
$658,000 for Tiong Bahru flat
A FIVE-ROOM flat at Block 131B, Kim Tian Road, fetched a princely $658,000 on the resale market recently - more than what it may cost to get a private apartment in Loyang. Related link: » Why go private? HDB flats are better Over at Queenstown and Ghim Moh, the HDB resale market is similarly smoking hot: A five-room flat in Queenstown commanded $600,000 while another in Ghim Moh cost $650,000. These flats are not short on amenities either: they are near food haunts, schools, MRT stations, swimming and sports complexes and a short ride from town. As the price differentials between HDB flats and condominium apartments narrow, property companies told my paper that this is the best time for flat dwellers dreaming of an upgrade, or flat sellers hoping to make a tidy profit, to get in on the act. While prices for private homes have plunged by 13.8 per cent in the first quarter this year, the price tags of resale HDB units have remained largely unaffected. PropNex's corporate communications manager, Mr Adam Tan, said this was due to strong demand for resale flats. He explained: 'The overall continued strong demand for resale flats stems from the fact that there are no more surplus flats with HDB and resale flats present a viable option for people who are unable to wait for projects under construction.' So does this slump in the economy present an opportune moment to switch to private properties? The answer is a resounding yes. 'For people with the means, now is an excellent time...given that the gap between the price indices of the two is at its narrowest,' Mr Tan explained.


CHRIS HO said...

Firstly if one could afford a 600k plus home, i don't quite agree that he or she is on "low" wage. Even if the purchase is based on loans of 30-35 years. Secondly, personally i believe it's a matter of choice. If you calculate the monthly repayments, one could actually live in a 3-4 room flat comfortably with money to spare. OR, buy a house in Jb, a car, with a driver all with the same monthly instalment amount. However, Uniquely Singaporeans usually do things differently from their Japanese and Korean counterparts. We have a choice, which did you make? ;p

LuckySingaporean said...
This comment has been removed by the author.
Anonymous said...

Dear Lucky

The problem is not HDB. The problem is Singaporeans (like your colleague) who willingly pay over the odds. The same ones who vote PAP/MBT every year.

There is never one option. There are always options. eg is sengkang/woodlands that far away from Tiong Bahru? vote MBT out(the only way they will listen)? etc.

just that the very people whom u try to help are taking what they "think" is the "easy" option. i use the word "think" loosely.

But why should u care? u own (valuable) private property(s). The property bubble is to your benefit. And bursting it will be fatal to many of sheep (incl the rabid ones ie ur followers) who still have massive outstanding loans (unlike you).

so what do u really want?

too convoluted?

Down with PAP! Lucky is the best!

Clearer now?

LuckySingaporean said...

::::We have a choice, which did you make?::::

Which one did Singaporeans make? The one that lets them have the joy of ending whining for the next 4 years I suppose.

:::, buy a house in Jb, a car, with a driver all with the same :::

So you're saying the other option is to stay in another country then commute to Singapore. Hmmm...I heard of people doing it...but it is somewhat drastic...

Anonymous said...

Don't underestimate these people. They really can afford such homes. They are part of the 66% who voted PAP everytime and PAP knows how many can afford. If not, they won't mark the price so high.

Lucky, your concerns are unfounded because you don't have the data on how many and rich Singaporeans are! PAP has.

Anonymous said...

Well, come to think about it. They're already encouraging people to seek medical services in Malaysia. Might as well move a segment of the population into JB in the near future, where the standard of living is relatively low.

Anonymous said...

Very scary.
u thought u can hv yr job for 1 years, so u borrow 30 years. Of course u can afford.
But te fact is u may be kick out by FT very soon.
Then how?
default paymt again??
Can u find a similar job again???

Anonymous said...

I bought my HDB 5-room flat for around $250K. It is located close to an mrt and bus interchange.

Given the size of Singapore, I could take public transport and reach most places close to an mrt station within an hour.

As such, I cannot comprehend why people would pay $650k for a HDB flat, citing location as a reason. It makes far better sense to pay half that amount for a flat in Sembawang, and take taxi everyday.

Anonymous said...

They sell high(resale), these can buy high(upgrade).

Furthermore, if prices are stable, what have you got to lose?

Unless the government's intent is to create bubbles in the property market( for instance oversupply) to hurt people whilst benefiting certain people then, woe to them.

Let the people's blood be on their head.

Anonymous said...

What concerns me more is that a new 5 room HDB flat in Queensway can cost $560K. But even if it is only $400K, it is a very high figure.

As the monopolist for so-called public housing, PAP set the price as such. I don't buy the line that such high HDB prices are due to market forces. In a housing monopoly, what market forces are they talking about. Is there any kampong houses left for people to choose?

But of course PAP will say you have a choice, go for private housing like condos. I see and pay higher. Any better arguments? Rent a apartment in a private house or someone's HDB flat. As life-long accomodation and how economical can that be?

Ah I forgot, we still have the void deck.

Make no mistake about it: PAP set the prices and there is no market factor setting this.

Just to let my imagination run wild (you can't help it under the circumstance) I think that PAP simply want to enslave S'poreans for life paying for their HDB flats or else force them to emigrate.

It will do PAP good, less citizens to look after, less anti-PAP votes to deal with, and more income to empower PAP kingdom, a power structure overshadowing the society so much that there is no much of society to talk about eventually.

Speculation? Not totally because shocking facts are there for all to see.

I used to think only HDB shop owners in lousy locations have a hard time servicing their loans.

Get out while you can, not just for the young but also for the old, because for them there is also the cost of healthcare to worry about.

Don't dream it will get better.

Chee Wai Lee said...

How can demand not "remain high" when HDB controls 70% (the figure I was aware of a couple of decades ago) of all Singapore housing. What choice do people have other than the more expensive 30%?

I really do not know what is affecting what ... HDB pricing influencing private real estate prices or the other way around.

Anonymous said...

My god....for SGD600K I can afford a sea-fronted, 3 bedroom landed independent property with a 2-car garage and front yard in any suburban Australian neighbourhood.

Day after day I'm more and more convinced I made the right choice in applying for Aussie PR.

Freed Singaporean

Anonymous said...

The HDB adopt a market driven pricing instead of cost plus pricing.

In order to protect the "bubble" valuers are not lowering the valuation thus driving up prices.

IMHO, HDb lost it direction as a provider of affordable housing for the public.

SG lad said...

Dear Sir, (lucky tan)

please write about the recent "Public Order Bill"! always enjoy reading your opinion & summary of current affairs lah~~

paiseh lah! i don't trust ST :p

yamizi said...

To Free Singaporean,

Congrats dude.

Anonymous said...

In Beijing, I can get a high end luxury apartment for 600k S$. Given that China's GDP is still growing at 6% and Singapore's GDP is growing at NEGATIVE 8-9% , makes me wonder what is the future upside for paying so much. Having said that, as long as there are crazy people willing to pay such prices, the price will stay.

Anonymous said...

I can take a train from Boon Lay interchange and reach City hall within 30 minutes.

I don't see the logic of paying extra $200K just to stay in Queenstown, so that i can shave 15 minutes off my train ride.

Xtrocious said...

Guys, don't forget the other side of the equation...

Most of us are using our CPF to pay for our over-priced housing...

See the link - left pocket go into right pocket and we are nothing more than just the human batteries like in the Matrix...

Anonymous said...

Willing seller, willing buyer. It is a deal between 2 consenting adults!

Just like the 66% who consented to give PAP a strong mandate with 98% of the seats.

Kerk said...

Everytime i saw the hdb prices, i laughed till my mouth drop. BTW, I'm laughing at Singaporeans, not the houses. HDB Default rate is 8%, that is 2 in every 25 HDB houses. Looks like it's going to increase significantly over the next 10 years. Seriously, do you expect a couple earning less than 3000/mth to buy a 250,000 flat or 8000/mth to buy a 700,000 flat. And how much is the cost of the flat?

Singaporeans need to have enough initiative to think before they vote. Well everything can be expensive, but an expensive house will KILL you financially. Well located 4rm PUBLIC housing at 400,000 to 450,000? Well it looks and builds public, but the prices are definitely not your public prices.

Just look at the situation now. I don't think that they are ignorant. They choose to be ignorant! (How do you think I know about default rates, median incomes, income inequality [GINI coeff.] and GDP/Capita etc? Obviously reading up right!) Have anyone here tried talking politics to most Singaporeans?? Seriously do they even care? They don't know that they are killing us while killing themselves.

Well they can go on to choose to be ignorant, continue to vote overwhelmingly for PAP and be in debt all their lives, work till 40, get retrenched, retrain new skills, get retrenched again in the next recession, have the same cycle till 65, then retire and come out of retirement again, then work till 80, and then die, all because they were paying probably a few hundred percent markup on a property that is so obviously EXPENSIVE. What a great life! :-D

P.S. Sorry for the long rant. Just really pissed off Singaporeans find it normal to buy Expensive HDB houses and just accept it, causing rational man like me to look at a crazy market.

Anonymous said...

Kerk, I agree with everything you say man. You are not ranting but have the courage to say it like it is for the good of others.

C'mon what going on with S'poreans? I just don't understand their behaviour of treating such high priced HDB flats like some kind of treasure.

I tell people that one of the most dangerous investments are properties. You know why? Because when the economy is down, property market also sinks and you are unable to service your loans, it become very difficult to sell your house.

Even so-called risky stockmarket speculation and trading are actually less risky in a downturn. You just sell at a loss anytime but not a house just like that. You can wait for years before someone picks it up. In the meantime the pressure to service your housing loans piles up and the bank might just take over your property.

I know nobody who has already invested in a high priced property want to hear all this but it is not too late to work out your sums level-headedly and do the necessary.

Wrong judgement in buying properties not only can destroy a person financially, it can destroy families as well when couples quarrel over finances and it has even driven some to consider suicide.

That PAP is doing all this, driving up HDB prices to such sky high levels, is simply unforgivable. Don't get tricked into ; all you need as a starting base to earning your living and may be even prosper is a simple roof over your head so go demand for smaller cheaper flats from your MP, Minister whatever. Assert your citizen's right!

Anonymous said...

It takes two hands to clap!

One willing to sell skyrocket high price HDB flat comes with "Govt subsidy or rebate", one willing to buy just bcos it is located in some mature estates or prime areas or it comes with "condo fixtures and fittings".

No matter how they "beautify" the HDB flats, they are still Govt flats. Just like a normal car which it is fitted with sports car bodykit and spoiler, it is still a normal car afterall.

Only MND MBT and PAP Govt will laugh to their bank...

Anonymous said...

Why nobody in the Parliament ask about the cost of building a HDB flat? What was its selling price? Straight away we know what is its profit per unit!

Where is the "transparency" and where is the "accountability"?

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