Wednesday, September 09, 2009

Home sales - what you're paying for...

The piece of 99 yr leasehold land at Dakota Cresent has been sold to UOL, one of 13 bidders for the tender.

The article below gives an interesting breakdown:

1. UOL buy the land from the govt at $430 per square foot per plot ratio.

2. UOL plans to sell smaller units priced at $1000-$1050 per square foot.

3. UOL's breakeven selling price is $920 per square foot.

Based on these numbers UOL makes a profit of about 10% of the selling price of each unit. Given the risk it has taken given the economy can turn down by the the time it markets the condo, a 10% return is fair. Construction cost is about 10-15% of price (yes, a $800K condo cost about $80K to build). The bulk of it about 75%-80% is the cost of land which is sold by the govt to the highest bidder. Rising land cost is something Singaporeans cannot run away from (if they want to remain as Singaporeans). If you're Japanese and can't stand the cost of living in Tokyo, you can just pack up and go to one of the many prefectures which the cost of living is probably lower than in Singapore. If you are American and can't stand the cost of living in New York, you can go to California. In Singapore, we have no choice. That is why it make sense to have HDB sell affordable housing to Singaporeans - affordable meaning it is priced relative to income levels and general employment stability. But HDB's selling price based on the market and that has led to all sorts of problems for Singaporeans.
-------------------

A total of 13 bids were received, reflecting developers' voracious appetite for mass-market and mid-tier private housing land.

The top bid from UOL Group was above market expectations of about $420-450 per square foot per plot ratio (psf ppr) just a few days ago.
.
UOL's price yesterday was slightly more than $329 million or about $508 psf ppr - just 3 per cent shy of the $524 psf ppr that Ho Bee and NUTC Choice Homes paid during the peak in June 2007 for the plot next door on which they are developing Dakota Residences, which has achieved an average selling price of about $970-980 psf. However, after taking into account changes in planning regulations since then, whereby planter boxes and bay windows are not exempted from gross floor area calculations, UOL's bid yesterday is probably higher than the equivalent 2007 bid for the next-door plot, some market watchers say.
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BT understands that UOL is gunning for a high proportion of smaller units in its proposed scheme, and thus push for a higher average selling price of about $1,000-1,050 psf. 'They should be able to achieve this kind of psf price - so long as they keep the absolute price quantum within an affordable range,' an industry observer said. BT understands UOL's breakeven cost will be about $920 psf.

When contacted, UOL chief operating officer Liam Wee Sin said the group plans to build about 550-600 units, with at least half likely to be two-bedroom apartments. The 18-storey project will be launch-ready around mid-2010, he added. Analysts felt that most bidders would not build a basement in their scheme for the site to minimise construction costs given the marine soil on the site, which fronts Geylang River. Said Mr Liam: 'Our bid assumptions were based on current pricing. And this is one of the more choice plots on the current Government Land Sales Programme.' 'UOL's Singapore residential development business has grown to be a very important growth engine for the group. And having successfully launched two projects this year - Meadows @ Peirce and Double Bay Residences - we need to acquire more land to sustain this growth-engine,' Mr Liam added. The group will continue to be on the lookout for more residential sites in Singapore, he added. Analysts note that the supply pipeline for mass-market homes, particularly those on 99-year sites bought at state tenders, has dwindled rapidly in the past six months, aided by the suspension of the confirmed list state land sales since October last year and strong home buying in this segment since February.
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Credo Real Estate managing director Karamjit Singh said: 'The rally in the mass and mid-tier markets probably has another one-and-a-half or two years to run - assuming there's no intervention by government to cool demand or any negative external factors coming into play. That's something that developers are beginning to appreciate, which is why the participation rate at today's tender is very high,' he added. 'The bottomline is that $508 psf ppr is still a very viable proposition for the developer as the site has qualities that appeal to this segment of the market - proximity to an MRT station and amenities,' Mr Singh added. UOL's $508 psf ppr bid was 5.4 per cent higher than the next highest offer by GuocoLand of almost $482 psf ppr. Frasers Centrepoint bid about $462 psf ppr. Four other bids were above $400 psf ppr. A unit of Lippo group posted the lowest bid of $247 psf ppr. The highest bid was 2.53 times the minimum price of $200.74 psf ppr for the plot, which is from the government's reserve list. Such sites are launched for tender only if there is a successful application by a developer with an undertaking of a minimum offer acceptable to the state. Confirmed list sites on the other hand are launched for tender according to scheduled dates, which could translate to more residential property launches. By some estimates, developers have raised prices of mass-market projects by about 10-15 per cent from the January-February lows.

47 comments:

Salary said...

With UOL's breakeven selling price is $920 per square foot and buying the land from the govt at $430 per square foot per plot ratio, shouldn't the land cost be 47% (430/920) instead of 75%-80% is the cost of land?

Am I missing something?

LuckySingaporean said...

Salary,

That is a very good question. My guess is the land is taken up by facilities like club house, playgrown and pool so the buidup area is much smaller.

Anyone can give a better explanation? Or is UOL making off with truck loads of profits?

Anonymous said...

You need to know what the max plot ratio is. Plot ratio is simply the build-up or build-in area divided by the actual land area. You cannot compare cost per sq ft to cost per sq ft per plot ratio. There are different things related by the plot ratio.

Integrity said...

We may not know how much PAP has lost through their talents.They may have blown a hole double that has been known.

US Fed has currency swap of up to US$30 billion each with S Korea, Mexico, Brazil and SG due to the crisis. (shows how bad)

They need to plunder relentlessly and sell our assets. Then they will pay themselves high salaries because they are talent.

To do that they need 1st to sell us expensive properties.

Anonymous said...

the most ridiculous thing is the gabrament keep on saying land is scarce in sg.

bulllock!!! drive on the expressway and u see continuous stretches of land unused.
even prime areas like clementi have loads of land unused.

i am totally sick of this greedy pap govt who only knows how to make profit for themselves instead of doing good for the country.

Anonymous said...

yes, a $800K condo cost about $80K to build.

We can use reverse engineering to determine the cost of HDB flats by analyzing the cost of private condos.

Anonymous said...

it is a sad day when the govt props up the prices of HDB flats, so that the citizens cannot resell it at a high price and pocket the profits.

Now HDB can sell it's initial launch at high price and Mah Bow Tan gets a higher performance bonus - cos SM Goh has clearly indicated - their performance bonus is tied to the GDP.

Anonymous said...

How can amenities cost so much to build when it is shared by all the residents?

If there are 500 condo units, and if you install 3 gold taps in a VIP lounge, it is still 3 gold taps / 500 units. Same for the park and the pool.

I think UOL is making an obscene profit. A 10% return is really modest, given the huge cash outflow and risk needed in developing the property.

Anonymous said...

No matter what, the government has to sell the land to the highest bidder, so that more money can be collected from the developer, and the money goes into Singapore's coffer to build more roads, parks etc. There are still other cheaper locations in Singapore which is less than half the price of the city or city fringe area. But I guess most Singaporeans just want to stay in the city and ignore the outskirts, so that they can benefit from the price appreciation. All are selfish.

Anonymous said...

Even if the selling is at $1300 per square foot, there will still be people buying them.They are all afraid of further rise and 'miss the boat', insurance against the future etc. I think that nowadays the media has done a terrific job in blocking the truth. See the economic recession? Anyone know the actual depth of the disaster? H1N1? How many of us here are infected? Hundredo of thousands!

BTW I think the price of housing is directly linked to our working life expectancy. 30 years working to pay off the loan. Also, the price will only rise so parents may need to sell their house to buy a new one,e.g for their kids...so sort like self re-nenewal.

Integrity said...

Maybe I cannot provide some estimation.

Assuming

1) deveoper maximise the entitled plot.

2) Parking lot to house ratio is 1

3) Average apartment size is 80 sq meters.

4) Total unit built is 550.

Public amenties like swimming pool and garden would at most takes up 15 % of plot.

Car park and roads may take 20% of plot.

Corridors and misc probably 10%.

Probably in every private apartment just a little more than 50% goes to housing space.

So developer will need to sell at $860 assuming no development cost.

We can justly say developer constitute just a part of our property woes.

Eventually, many may make only razor thin profit.

The developer basically work for PAP the bloody blood sucker.

Tay Wee Wen said...

Whats more evil other than the PAP's spin.

PAP lies as below

1) Housing price as fix by demand and supply.

2) House are so high because Singaporean are able to afford it.

First, all classical economist will tell you that house is classified as almost perfectly demand inelastic. (sorry for econs term)

In short no matter how little supply of house, there is still be the same number of demand, and people are willing to fork out the maximum possible to get one.

Given the high gini index, poor will be displace. Currently the amount of FT ensures that the rich are able to pay their mortage on rent.

Next, talking about market fixing of house price simply do not make sense in singapore because there is no absolute private ownership of property. The land acquisition act ensures that PAP rob the poor and sell the land into profit.

It is the most evil social injustice that can only be mitigated if the land is put into proper public purpose. ie supplying cheap HDB, built roads, build schs....etc

Now PAP has really turned unbearably base and wicked. The plunder of house turns into more plunder by selling it back astronomically to us.

(Did PAP ever massively acquire land in Bukit Timah?)

Anonymous said...

I vote oppo.

I think emigrate.

I feel angry.

Anonymous said...

Thanks to the Land Acquisition Act, the govt has managed to acquire vast tracks of private land at rock-bottom prices.

In many cases, the govt didn't even need to pay a single cent. It threw out many kampung land owners from their land, took their land and gave them 4-room HDB flats in return.

It didn't cost the govt much to build HDB flats back in the 1970s, and the flats costs much less to build than now, considering the labour and material costs back in the 1970s.

And now, the govt is selling that same land for $450 psf. Wow! What an obscene profit! Even Warren Buffet can't make money grow that fast!

Property said...
This comment has been removed by the author.
Property said...

by:
http://www.propertyBUYER.com.sg/articles/article.php

Is break even price is 920 psf, selling at 10% margin would end it in 1012 psf. However that is NOT 10% margin. It is much much more than that.

First, consider that the they will not incur the full cost of 920psf to start building and complete it before they sell. If they do, then it's 10% margin.

If they only spend 460psf worth to buy the land and build a show room and start selling you the properties at 1012psf, because they only come up with 50% of the 920psf capital required and the rest is funded by you, and assume that they can pocket the money. They would have $92 psf profit, but the capital outlay is only $460psf. That is 20%.

Now wait, no developer will use all cash, so the venture is funded by borrowings. So of that $460psf, perhaps 50% is funded by banks and borrowings. That brings the actual capital outlay to 230psf.

Now using 230psf to make 92psf is a very high profit margin of 40% before interest expenses.

After interest expenses, the Returns on invested capital could still be in the 30+%.

And I would assume that most projects would bel able to borrow up to 50 to 70% of project cost. At 10% margin, the returns on invested capital would easily be in the 30 to 60% and many do mark up more than 10%. If they market at 20% margin, their returns would easily be in the range of 60 to 120% if they all sold out.

If they don't sell out, then of course, they stand to lose money or make much less.

LuckySingaporean said...

Property,

I was referring to the fraction of price of the unit that ends up as profit for the developer. The developer can enhance his profit by leveraging, and various ways of financing the development using a smaller capital outlay but if the article to be believed, 920 psf is the breakeven price so to the buyer he is contributing 10% of his money to the developer's profit.

Ian Timothy said...

"No matter what, the government has to sell the land to the highest bidder, so that more money can be collected from the developer, and the money goes into Singapore's coffer to build more roads, parks etc. There are still other cheaper locations in Singapore which is less than half the price of the city or city fringe area. But I guess most Singaporeans just want to stay in the city and ignore the outskirts, so that they can benefit from the price appreciation. All are selfish."

I am very tired of such justifications of why the government needs to take more now so that they can put it back later at another place.

Here is why...

HDB isn't a form of taxation (or maybe it is but it really shouldn't be).

The government has corporate, income, and consumption taxes to fill its coffers. Each year, the government decides on a budget which apportions different amounts to the different bodies responsible for our roads, parks, etc, etc, etc...

HDB is about providing affordable housing, not about maximizing the value of Singapore's land (which incidentally belongs to the people).

It (OUR LAND) isn't a means for the government to gain more money from developers (foreign or local) who have access to capital. It isn't a means for those who have access to capital to profit from us (who own the land, but don't manage it).

Von Hayek said...

Reply Ian Timothy

I think your arguments are flawed. HDB publically claimed they have benchmark their house based on private property.

Government is reducing the supply to private property developer so as to rib off the HDB buyers.

Your claims that government needs to sell land to highest bidder is misleading. True, but in every most cities, there is also a restriction on foreiger ownership of property. Government all over the world have a brake in place to prevent free-wheeling of properties.

You claim that government collected more monies (for national interest)when selling land high, and why interptet as well government is creating a property bubble.

I challenge our government to release statistics on foreign ownership of property, or property owned by hot money.

During Goh Chok Tong Asset Enhancement Scheme, such apologetics are trumpted non stop and in the end its the Singaporean who pays for the burst of property bubbles.

Does Goh apologise for the subsequent property slump in 1997?

I hope someone in the government now can stand up and claim responsibilites for our property bubble 1994-1996. (AND STOP THE PARROTING NOW)

No one, they are just cowards.

Then LKY claimed credit shameless saying that the government deflate property bubble. (boom and burst our government always has something brag they are talent)

Your so call HDB affordable housing is forcing Singaporean to take 30 years mortages.

The real measurement for affordability is that a the house must be around 6 years of family income.

In fact, SG citizen bear higher burden on house than major European cities like Paris or Berlin.

Take about market rate for property simply do not go anywhere.

In many other countries, though government is big landlord, a small part of land are own private.

The sanctity of private property is generally uphold unless there is a need to serve acute national interest.

In SG, government systematically rob land from poor, then restrict supply to market, it is simply immoral.

Ian Timothy said...

@Von Hayek, the part of my comment wish you take issue with is in quotes. I was replying to a comment made about mine. That comment is the content in the quotes.

Von Hayek said...

To Ian Timothy

Sorry mis-interpret your essay

Anonymous said...

According to the article, UOL bought the land at $508 psf ppr and not $430 psf ppr?

Anonymous said...

Well, I believe lots of people will shoot me after this post because it is a "different" view.

I don't know why people keeps complaining without offering solutions. The government has to be equitable. The govt cannot sell $80k HDB (free land and only charge construction costs) to those who earn less than $8k when this person can resell it 5 years later for $600k and make $520k just by doing nothing. This is just not fair to his brighter and more hardworking friends who earn more than $8k per month and are forced to buy private property at $800k with no free money and no free land. It happens in the past when HDB flats are so heavily subsidised against market prices that most Singaporen men propose to their wife by "Let's buy HDB flat and make few hundred thousand dollars!" Those who chose not to buy HDB flats and be rushed into early marriage lost out big time. We're talking money falling from the sky - few hundred thousand within a few years.

Meritocracy has to work. Therefore, HDB flats will always have to tie to market price as a market subsidy as we all learn in economics. Any other way doesn't work because the capable and hardworking chaps who earn more than $8k are significantly penalised. For someone who earns $8k per month, it takes him 5 years of sweat to earn $500k, and assuming he saves and scrimps 50% of his income, it takes him 10 years to save $500k. While your lazy bum cousin sit around and wait for it to fall on his lap in 5years merely because govt gave him an $80k flat. What about that? Who wants to work? Just somehow find a husband or wife and get a flat.

What the government can do is perhaps sell the HDB flats cheaply, say $200k, and then lock the buyer up for 20 years, i.e. buyer cannot sell and make easy money for 20 years. However, I suspect the Singaporeans will complain again, and wants to make easy money and upgrade and make hundreds of thousand in 5 years :)

You cannot please everyone. Market subsidy is rather fair IMHO. If the govt sells HDB based on construction costs and give free land to certain section of the population, this cannot work.

Von Hayek said...

Hi Anonymous 10/9/09 15:48

I supported fully what you have said.

It is unfair that garment sell next year HDB at $80 000 but $300 000 this year.

Whenever the bubble bring us to a higher level, the citizen simply has to sustain it.

But who brought us there the first place. The garment is still unrepentent about it looking at HDB's spokeman pretext.

What I mean is that we have probably at certain stage of bubble not unlike 1994-1996. When it burst, all gonna suffer.

Foreigner and hot money take profit and bye bye.

Anonymous said...

Dude, you are assuming that the govt hdb price is not propping up the market. That the hdb resale price will remain constant even when a large segment of the population can buy significantly cheaper flats.

Incidentally, what u propse is not a bad idea. The govt can lock in property owners of severly discounted flats. If u dun like it, u can pay market price.

This way we can make sure that the needs are met.

Anonymous said...

To Anonymous 15:48,

First of all, your example is extreme and nobody is calling for HDB to sell flats at 80k.

Secondly, even if flat owners manage to sell their flats for an obscene profit, where are they going to live next?

Equivalent housing will cost about the same, not to mention additional renovation and transactional costs. If a flat is sold for 600k, a new flat has to be bought for 600k too, so no value is unlocked.

Thirdly, you talk about fairness and meritocracy, but you only focus on the methods. What about the results?

The current result (reality) is that a majority of people have trouble affording flats. It is unfair and unethical to say they deserve it because they are "lazy" or "less capable" than the rich ones.

True fairness will entail making the end results fair too, and that means taking positive action to help the poor move up.

This is what people mean when we say HDB has a social responsibility to build truly affordable housing.

King Greg said...

"The govt cannot sell $80k HDB (free land and only charge construction costs) to those who earn less than $8k when this person can resell it 5 years later for $600k and make $520k just by doing nothing."

Anon 15:48, I don't understand leh.

Suppose gahmen can sell you 80K flat how come they will let you sell to other people for 600K in 5 years??? Part-time gahmen price then part-time market price ah?

This example is you suka-suka make up one izzit?

UseYourBlain said...

"If the govt sells HDB based on construction costs and give free land to certain section of the population, this cannot work."

Nonsense! Everyone can have one bite of the apple, ie buy a really affordable HDB flat for the first-time.

Later on, to the same extent as they want to sell it to make a profit, they will have to pay a hefty price to get another roof.

HDB used to do this actually way back. Then it got green-eyed and greedy and decide to help itself to a piece of pie. So presto, it began selling at "market subsidy" level.

Anonymous said...

I am not sure who is not using the brain. Are uou sure everyone is entitled to a first time subsidised HDB flat? The singles are NOT entitled and is unlikely to get any subsidy from the govt for anything because they're useless people who do not procreate. The chaps who earn more then $8k are not entitled.

Or are you suggesting HDB become a monopoly and build housing for all and sundry? Then might as well become a communist state when govt decides/provides everything, including your housing, for you. That is ideal isn't it? It's amusing. i bet the SAME group people who complain about HDB not building houses for everyone will complain about lack of freedom. Wait till the govt provides for accomodation - you are pretty much under their control.

$600k is the assumed market price. Period. Just because you sell a few lucky chaps HDB with free 99 year lease at $80k doesn't mean he is so kind to sell you 5 years later at below market price. Go figure.

King Greg said...

"Or are you suggesting HDB become a monopoly and build housing for all and sundry? Then might as well become a communist state when govt decides/provides everything, including your housing, for you. That is ideal isn't it? It's amusing. i bet the SAME group people who complain about HDB not building houses for everyone will complain about lack of freedom. Wait till the govt provides for accomodation - you are pretty much under their control."

Aiyah anon 17:42, King Greg may be king but is lau ah pek already, easily headache. Not invincible like King Lee. Why the discussion suddenly twist from cheaper housing to communism I don't know, head quite pain. Maybe I wrong but I think many capitalist countries have cheap housing without state control of everything.

"$600k is the assumed market price. Period. Just because you sell a few lucky chaps HDB with free 99 year lease at $80k doesn't mean he is so kind to sell you 5 years later at below market price. Go figure."

Still don't understand. Why talking "kindness"?

Suppose gahmen can sell you flat for 80K how come you keep insist that in 5 years time it will be 600K?

Maybe full market price will be 154K, or 365.25K, or 599.99K?

This example is you any how make up one, what so special about the number "600"?

Von Hayek said...

Reply Annoymous 10/9/09 17:42

You are some of the most idiotic head I ever seen.

You claim single are useless who do not procreate. So what is the implication to similar person like Jesus, Newton, Beethoven..etc You are the mother of super egoistic.

So there is a bubble forming like those of 1996. So are you going to stick your head out and cheer for the bubble if it burst?

Have you seen PAP using the same kind asset enhancement scheme rhetoric to create a bubble? And now who has ever apologise for the mother of wealth destruction 1997 not seen before in SG?

No one is asking HDB to go to $80 000 not me.

I just hope we have a soft landing and hope we dont create bubble big enough that burst.

Go and say sorry to God if you are Christian for your stenchest profanity.

Anonymous said...

I am waiting for the 'W' double dip recession coming and then see people complaining why garhmen not taking actions to curb speculations when condos price reach sky high. They have been warned, hints are given.

But I will sure be irated if garhmen says then the COV HDB resale flats be sustained at peak level because they need to 'protect' those who spend $500,000 for new HDB flats, like what happens in 1997 Punggol estates. Talk about free market.

WE SHALL SEE...

I prefer HDB to offer alternative scheme like for those who pay e.g 80k for a smaller say 60m2 flat locked in for 20 years. There is a need to 'protect' real dwellers to those people looking for a quick flip.

Anonymous said...

From the posts, it appears that most here just complain without thinking hard enough of the implications of other groups (e.g. singles, middle class earning more than $8k) of giving free 99LH land (i..e only charge construction costs) to certain group of people. It's all self interest, isn't it?

I just hope people here can take a step back and think harder of solutions, instead of just complaining for the sake of complaining. The government has to look after everyone, and not overly distribute income from the say middle-middle-class to the lower-middle-class. It's not fair to the middle-middle-class who is not entitled to these subsidies - so subsidies (discount to market price) cannot be too astronomical. And Singapore by and large has a fat middle class. Helping the poor is fine. Helping some selfish middle class who wants the best of everything, cheap HDB in CBD, refuse to stay in the outskirts, wants high floor, good facing, cheap so that can make easy profits etc. It's the ME ME ME mentality for many of them.

To help the poor, one other solution is to reduce the tenure from 99 years LH to say 30 years leasehold and then charge the low income group a lower quantum :)

Just food for thought. My last post. It's easy to complain.

Anonymous said...

I am a 35+single and I want a scheme something like annuity plan. Say pay 80K for a 3 room flat and live there till I expire. The house will then be taken back by the garhmen and to the next taker under the same scheme.

So that I can concentrate on working and not too worry about a roof over my head.

King Greg said...

"Helping the poor is fine. Helping some selfish middle class who wants the best of everything, cheap HDB in CBD, refuse to stay in the outskirts, wants high floor, good facing, cheap so that can make easy profits etc. It's the ME ME ME mentality for many of them."

Oh, my good friend, my young friend anon 19:54, after you invent your "600K" story you now invent another story about not helping poor but instead helping those "selfish middle class" people.

How many of those "selfish middle class people" are out there?

600K?

"Just food for thought. My last post. It's easy to complain."

Actually you have some nice suggestions, though your examples a bit extreme. For your info, young man, King Greg no need to comprain. He lives in a palace in the Mediterranean so no need worry about your 600K flat.

But King Greg instantly detect smell of gahmen bootlicker and must say a few words. Last time his imperial court also got a lot of bootlickers, so quite familiar smell. Now not so many.

Anonymous said...

To Anonymous 10/9/09 19:54

PAP has over-stretch the definition of middle class. I do not know what you mean by fat middle class given we have one of the highest gini in the world as latin america.

Singaporean do not want any "help". We are not going for Europe style of social welfare. We look after ourselves, the government do not take care of us.

It is extremely unjust to transfer wealth by plundering in the name of land acquisition and selling us highly mark up.

In fact, it is the poor who subsidise the government.

You really has weak logic.

Neither I feel we can go down to HDB cost price. We need a slow deflation of property bubble.

What we want is the prevention of wealth destruction by the collapse property inflation.

Charles said...

If the HDB was selling the houses at S$80k, which sucker would buy resale at S$400k?

Instead of following and inflating the bubble by following the market and offering cheap loans, HDB should slowly deflate the bubble by slowly decreasing the price toward construction price

Of source this would spell trouble for a lot of people and corporations who have put a lot of money in a the bubble
PAP wold also have to review its income tax scheme

Another solution is to stop selling HDBs and stop only rent them

Von Hayek said...

This is quotation from Mandarin Ngiam Tong Dow

"The Act allows the State to
acquire private land for public purpose at pre-development prices"

"The core principle of the Land Acquisition Act is that private land can only be acquired for a clear public purpose. In Singapore, private land is compulsorily acquired for infrastructure, such as roads and expressways, low-cost HDB housing, the Jurong industrial estate, schools, hospitals, and public parks"

"Acquisition can easily degenerate into expropriation, where corrupt officials in the name of the State turf out peasants and resell the land for a huge premium.
"

"We saw no reason why landlords should benefit from public infrastructural investment in roads, drainage, sewerage, power and water pipelines"

Von Hayek said...

So who is subsidizing who?

Its the poor who is subsidizing our national development.

All grieve are justified. PAP is lucky is that Singaporean are tough lot. In USA, native who lost their land often fell into drug and alcoholism.

Singaporean take care of themselves. We do not need government to take care of us, just stop the property bubble that it.

UseYourBlain said...

PAP would be most unwilling to deflat property prices via its rigor mortis grip on HDB and TLCs.

PAP has built up an economy that requires the lubrication of exorbitant property prices.

Moreover, deflating property prices runs in contradiction to its pro-immigration policy. Hell, if you let in Tom, Dick and Harry (and their families) into Singapore, you might as well enjoy the sideshow of rising property prices to further push up your KPI of GDP growth.

Fievel said...

Guys we need more people to visit this online petition for AFFORDABLE HOUSING IN SINGAPORE in order to reach the targeted 1000 signatures.

It JUST might make a difference!
Do your bit today.

http://www.thepetitionsite.com/1/lower-hdb-valuations-or-build-more-affordable-hdb-housing-for-singaporeans

Anonymous said...

I think Singaporeans should also be open to the concept of renting homes, just like most other countries when renting is prevalent culture. If you cannot afford to buy a home because you have no savings, renting is always an option - you cannot keep asking the govt to give you free rider 99LH land etc. Singapore has a high home ownership rate - I think HDB is too successful for its own good. It provides 85% of housing for its population. At some point in time, it has to let go of the 85% market share and reduce to say 50%, and educate its people that if you cannot afford to buy a home, you can always rent and manage your cash flows carefully. Singapore cannot be nanny state forever.
Perhaps one solution is to allow CPF savings to pay for rentals. That would help to ease off the burden of the lower income group.

Anonymous said...

I think rental is not a feasible option in land scarce Singapore, at least not now.
It will only drive up property to astronomical highs and you will see thousands and thousands applying for each unit.

However that may be a reality in 10, 20 years time when income gap is very wide, in conjuction with the ever rising price of HDB flats. Coupled with measly salary, many will not be able to buy even the cheapest flat.

How many people are earning less than $1,500 and how many at $2,500?

Garhmen should now look out for land from Indonesia Riau, Batam, or Malaysia to build cheaper accomodations, but I just hate to think my sons and grandsons need to travel to Singapore every morning to work and leave in evening.BUT WHO KNOWS MAYBE MERGE WITH MALAYSIA IN 30 YEARS TIME.

OR THE WORLD HAS ENDED THEN :)P

Anonymous said...

The petition is a joke and most goes like this "I am a young couple and I have no savings. I spend every single cent. If Singapore government don't give me cheap HDB flat for me in the best location and high floor, then I am not going to have a child." It's so selfish.

Learn to save and spend within your means. Cut down on you LV bags. Only buy a house or a car - big ticket items, when you have some savings. At the mean time, take public transport or rent a place if you don't like to stay with your parents. These pay-as-you-use option is better from a cash flow perspective. That is the best advice. If you can't afford a house or a car - don't buy. Don't expect the govt to become a factory and start building cheap cars or houses or whatever you fancy for you. Many countries around the world doesn't have the govt building for them 85% of their housing and young people cope. Learn to manage your finances - that is the best advice.

And honestly, I don't think threatening the govt of not having children just because you're not given cheap HDB flat is not very well-thought out petition.

Anonymous said...

Many people are not having children for many reasons.

For me, simple. I have to be in good capacity to provide for myself and my children/child. Give them good education (that means Uni), devote much time to guide them (we see how children misbehave when parents are busy working, never mind so called spend quality time with them.)

Of course people say for that to happen (when all conditions are met) we will be too old to start.That is simply not true. Things change rapidly in todays world and not always better tomorrow.

Melbourne said...

"think Singaporeans should also be open to the concept of renting homes, just like most other countries when renting is prevalent culture"

Erm the main reason we rent is because in the suburbs its cheaper to rent than to pay off a typical mortgage.

Another reason is because maybe we only want to stay a couple of years, then move to another place for more job opportunities.

Both reasons dont apply to such a small place as singapore.

And with the super low interest rates you get in singapore, it makes no sense to rent if you can buy.

Try a rent vs buy calculator with house price 350K, 7% interest over 30 years for a mortgage of 2300/month. You can rent a typical 350K place for 1400/month, almost a 1K difference

Melbourne said...

"At the mean time, take public transport or rent a place if you don't like to stay with your parents. These pay-as-you-use option is better from a cash flow perspective."

You do know how much it costs to rent in SG, right?

"That is the best advice. If you can't afford a house or a car - don't buy. Don't expect the govt to become a factory and start building cheap cars or houses or whatever you fancy for you."

Why does the government exist then? Why do I pay taxes and CPF to them if they dont do anything?

"Many countries around the world doesn't have the govt building for them 85% of their housing and young people cope. Learn to manage your finances - that is the best advice."

Because here we are paid a decent wage. And there is no such thing as employee CPF here.

My take-home pay AFTER TAX is 50% more than in singapore.

I can actually afford a house because I am paid enough.

"And honestly, I don't think threatening the govt of not having children just because you're not given cheap HDB flat is not very well-thought out petition."

Its not a threat, just reality.