Wednesday, January 13, 2010

HIgh HDB Prices : Curbing the surge....

Today's TNP headlines : 2 Room HDB flat near Chinatown fetches record price $245K. Couple pay $45K above valuation. Sellers make $100K profit after 2 years.

I'm surprised that Minister Mah who for the most of 1 year kept repeating the phrase "HDB flats are affordable" has recently said that he was caught "off guard". I'll show why it is so ridiculous for him to say that because as a minister in charge of housing he is suppose to track the demand and supply situation. He also said recently the way for HDB to sell cheaply is to have the buyers sell it back to HDB later on.....he has no other ideas?

"The whole question is, do we peg HDB flats to the market, or whether we follow another system. And that other system is what some countries use. In other words, I sell you a flat at fixed price, when you sell the flat, you have to sell it back to me also at a fixed price. In other words, you are not allowed to profit from the flat. There you can keep flat prices fixed."

- Minister Mah Bow Tan [Link]

Singaporeans have the highest savings rate in the world thanks to the CPF scheme. We set aside 34.% of our income for CPF until age 50 beyond which the rate drops. In the past the CPF rate was 50% and CPF cannot be used servicing HDB loans. Even with low returns, 50% is more than enough to retire comfortably. Because HDB's mandate is to provide affordable homes and Singaporeans pay for HDB flats from their disposable income after CPF deductions, it meant that HDB cannot increase its prices too quickly. Singaporeans had enough to retire and homes were affordable under the old scheme.

After the CPF was liberalised for private housing in 1988 (to fund 100% of a private house) and for public housing in 1991, prices of homes saw a large increase:

"Regression models are used to show that interest rates, income growth rates and the supply of housing have not played a statistically significant role in the determination of private housing prices in Singapore between 1975 and 1994. Instead, private housing prices in Singapore were highly correlated with the prices for public-sector-built housing. Moreover, the timing of government policies relating to the use of compulsory savings for private housing finance purposes, the liberalisation of rules on public housing ownership criterion as well as for housing finance had a significant impact on private housing prices. "
- Research Paper, Government Policies and Private Housing Prices in Singapore

The authors of the above paper believed the large surge in property prices that peaked in 1996 was caused by CPF liberalisation. Before liberalisation, the price movements were quite tame:



The increase following CPF liberalisation for housing was huge - outstripping income rise.
You may or may not agree with the authors' conclusion that the price increase is due to CPF liberalisation (some may argue it was due to optimism) but the end result is the same. CPF savings meant for retirement became tied up in housing i.e. the money moved from CPF to HDB and from the HDB to GIC to build up those massive reserves. Yes, and from the GIC, part of it went to those famous western banks, Stuyvesant town[Link] etc. and all other wonderful investments we get to hear about from time to time.

After they hit a peak in 1996, govt's antispeculative measures and the historic Asian Crisis caused the prices soften and stabilise at a generally high level around which they fluctuated until 2007 to 2009. The high price of housing meant that Singaporeans have to retire with less money and work longer. It also has other side effects - Singaporeans have less disposal income as servicing property debt over a long period of 25-30 years meant that the quality of life is not what it should be in a 1st world country. Servicing such huge debts for housing over long periods also make Singaporeans financially vulnerable - job loss or pay cuts can lead to defaults on housing loans. One in 12 HDB loans are in default....that is roughly one or two on every floor for every block of flat.

"Nobody, no matter how prescient, no matter how clever, would have been able to predict that this is what is going to happen this year. All of us were caught off-guard" - Minister Mah Bow Tan, Dec 2009

The above statement is hard to swallow because a simple look at demand and supply tells you a big shortfall was building up.


Figures from Tan Kin Lian's blog which was taken from 2009 Yearbook of Statistics[Link].

The table shows that the total population has increase by 17.6% (8.6% for residents) over the past 5 years but the number of new homes increased only by 1.2%. As minister who is responsible for the supply of public housing, how can Mr. Mah say he is caught by surprise? How can he plan the supply without looking at the demand situation?...Isn't this something fundamental to what he has to do? ...yes and we are told they have to be paid millions for 'super' competence...I really wonder.

It is very clear what the main cause of 2009's HDB price surge is. HDB wasted so much time trying to get us to believe that HDB flats are affordable as prices rose to new record levels instead of fixing the demand-supply problem. Singaporeans who needed homes paid for someone else's poor planning and policies.

Now that we have gotten to the point where Mr. Mah admitted that he was 'caught off-guard', they will at least try to fix the immediate situation so that prices will cool off (before the coming elections). We will however be left with the long term problem of high housing costs taking away a large part of retirement savings, taking away our quality of life and causing Singaporeans to have large household debts and hence less financial security. What can be done?

One feasible suggestion I've seen on the Internet is to reduce the loan tenure gradually to 15-20 years. Shortening this, helps Singaporeans to be free of their housing debt earlier and enables them to start accumulating savings for retirement. The main problem is many Singaporeans have already purchased homes at high prices so pushing prices down will have a negative wealth effect. Therefore, shortening of loan tenure has to be done gradually and only during periods when housing prices are on the rise to curb the rate of increase rather than cause a fall. Over time, prices should rise in pace with increase in median income and a far healthier situation can emerge. The other approach is to limit the amount of CPF money that can be used...but that has to be seen in a larger context as my main concern with CPF is the low fixed returns relative to inflation so proper management of CPF has to come first.

81 comments:

sloke said...

Reducing the tenure will mean a higher repayment. That will not be the solution. The crux of the issue is the rising price of flats, although as you mentioned, its is difficult to suppress it now that the fishes have swimmed into the net. I think they have a problem on hand.

I liked the table of availability of flats versus the increase in our population. Any fool would have seen that, unless MBT is unaware of the FT policy. On the conspiracy side of things, it could be that this is engineered to boost HDB's bottomline and the GDP, and give credence to an "asset enhancement" exercise which failed in the mid 90s. If that being the case, it may have well back fired.

Anonymous said...

I still think the most fessible solution is to emigrate.

Why bother about what these idiots say, why bother to convince your idiotic fellow citizens. I think most of the people here are young and well educated. Just go.

Anonymous said...

"One feasible suggestion I've seen on the Internet is to reduce the loan tenure gradually to 15-20 years. Shortening this, helps Singaporeans to be free of their housing debt earlier and enables them to start accumulating savings for retirement."

You are NAIVE and would have created another set of problems which may not be any better than now.

Anonymous said...

5 room $700,000, 4 room $500,000,
3 room $300,000, 2 room $250,000...

Vote Wisely.

Anonymous said...

we were offering erm...FREE comment on another well known blog by the name of...erm...out of politeness, let's not mention that old dog name(no offense but the term is coined from an old saying...you can't teach an old dog new tricks hehe)...so we said to the effect(he gave his ideology on how high hdb prices should be managed) that .....going by your recommendation that prices of home should be ONLY 4 to 5 times family income(he is so proud of his book and other products he is pushing$$$$$), wow wow wow, average income owners can consider owning more homes then??? LOL. wow, we can also retire early if not, QUIT OUR JOB AS WE PLEASE(if bosses offend us and dont give in to our demand) and even retire early since there is financial impetus to work(especially with so LOW HOME PRICES, more people can own more homes and lease it out) we can all retire lor and garmen can bring in more foreign workers(to all our delight LOL) to keep SINGAPORE INC going while ALL MODEST FAMILY INCOMERS like us can enjoy life pursuing our hobbies like GOLF LOL

of course we didnt say so much in the old dog's blog but guess what he did?

he blocked the comment and we fired another comment saying...hey, we thought you were objective. now we know you are a rigid and DANGEROUS old dog. we said...that comment was fair because..it was not defamatory in any sort of way but maybe a tab sarcastic which do not warrant a block.

the STUBBORN OLD BLOKE ignored our complain..JUST LIKE THE PAP who is hard of hearing when critiqued UNFLATTERINGLY ....but hey, you can't erase how the PEOPLE genuinely feel about your crap(welcome to the real world dealing with real people)

now if you are not up to that kind of comment.pls old dog, maybe politics is not your cup of tea??LOL

Anonymous said...

34% compulsory saving and we still cannot retire in comfort. This is the biggest acheivement of the ruling governmen and their 44 year legacy.

LuckySingaporean said...

anon 13:34,

What problems are you talking about? The length of tenure is directly correlated with housing prices - the Japanese allowed a 100 yr housing loans which caused their massive housing bubble there.

In the past people paid for houses with cash. Then there were 5 yr loans. These slowly increased to 30 yrs. The effect of longer loans is higher prices.

With shorter loans, HDB is oblige to supply the market at affordable prices relative to monthly income. That will keep prices sensible.

Anonymous said...

typo error...since there is NO financial impetus to work(especially with so LOW HOME PRICES, more people can own more homes and lease it out)

Anonymous said...

lucky, your mistake is that you do not know how many have paid off their homes within 10 to 15 years. you will be surprised, many singaporeans have ways to work off their loan much earlier despite the current home prices!

LuckySingaporean said...

anon 13:38:-

We all live to work? I thought work is a means to an end not an end in itself.

If someone invented a $1000 robot with an IQ of 140. Do you want to work to compete with the automaton? You would be screaming for wealth to be redistributed so we can let the robot do all the work.

I can make head or tail of your comment but if there are specifics you want me to address I'll be happy to do so.

Anonymous said...

lucky, pap build a world where it does not offer you rest.
can you reverse that without social and economic consequences?

pls.

you stop working, this place goes down.

that's how the powers stay in power - not that i agree with them if it makes you feel better.

Anonymous said...

i have checked with all my fellow singaporean friends in their 20s and 30s, the high hdb prices is causing a lot of stress and problems to them. esp those who are planning to get married, how do they come out the initial deposit (with COV)? do they have to wait 4-5 years for a BTO to be ready? those who are singles are already priced out of the private property market even though some falls into the the top 25% income group.

just because of this single housing issue, all of them made their views clear they are anti-PAP. it is compounded by the fact that their future is even more uncertain due to the liberal foreign labourers policy. when they are in their late-30s and 40s, they will be retrenched and the work be given to a younger foreigner. if the current government is not taking care of its people, they have to look for someone else to take over the government.

i guess the current PAP government also did not see it coming.

Anonymous said...

You and two more friends? LOL

Ah Mao said...

how can malboro see it coming? he probably only had eyes on gdp growth - tied to his "performance" bonus, and his monthly cpf statement like his colleague, lim swee suay.

anybody else wld have thot it elementary to keep an eye on population growth - that's what houses are used for right???

and to think that the entire govt is run by PAP, you wld have thot malboro wld check with MOM and ICA.

no, no... such checks are apparently too difficult for malboro. we gotta increase his pay so that he can perform such "difficult" tasks.

Anonymous said...

what to do? one either stick around here or migrate...

even if most people vote against, does not mean the counting is done honestly...

Anonymous said...

I am really curious as to when the HDB flat will hit 1 million SG dollars. Who will be this lucky family that will make it to the front page of Straits Times? Show me the MONEY !!!!

Anonymous said...

one ultimate way to reduce and stabilize HDB prices is to replace Mah Bow Tan. It's easy for ministers to collect million dollar salaries and absolve themselves of any responsibility or accountability

Anonymous said...

Just as the ministers' salaries are pegged to the private sector, naturally the HDB prices should pegged to their private properties.
This is known as standardization

Anonymous said...

"lucky, your mistake is that you do not know how many have paid off their homes within 10 to 15 years."

Wow, you know ? Where is the number you get from ? From your mouth or just like Turtle Tharman's "Trust us blindly" ? Just because you give some nonsense, it is our mistake not to accept the nonsense as gospel truth ?

Anonymous said...

I do agree that loan tenure needs to be lower, not only for HDB flats and private as well. It is ludicrous that the majority of property owners and speculators are taking in 30 year loans. With 30 year loan, monthly instalments become lower, and that will definitly push up the property prices beyond fundamentals. If one need to take 30 years to pay off his/her asset, it means he/she cannot afford in the first place. 15 year loan is more reasonable. When banks lend money to businesses, its generating real jobs and REAL GDP. When banks channel loans to the property market - it does nothing to real GDP other than creating property bubbles.

Anonymous said...

guys, build your own houses :-)

Anonymous said...

Ayah, cheaper to stay with your parents and wait for your parents to kong and inherit house solve problem lor haaa
alternatively, buy home in Johore cheap cheap lor haaa.

Ghost said...

Despite what Minister Mah had said, I do not recall any moves by the government to cool down the market. Until actions are taken to that effect, property prices will go up. What we need is not words but actions.

Anonymous said...

If lucky, parent kong early, kena toto lor

btw, kong means migrate hong kong hah....haaaa

Kojakbt said...

In my view, the huge increase in HDB resale prices tallies with the huge influx of FTs and PRs coming into Singapore in the recent years.

When demand side is open up like a big hole with waves after waves of PRs coming in, what do you think is the effect on HDB resale pricing?

I'm of the opinion that HDBs should be reserved for Singaporeans only. For PRs, they can always rent from us, just like the FTs. If they want to buy, become a Singaporean!

Anonymous said...

"If someone invented a $1000 robot with an IQ of 140. Do you want to work to compete with the automaton? You would be screaming for wealth to be redistributed so we can let the robot do all the work."

you are that robot except I am not sure about the quotient and MiW is very please with the redistribution of wealth.

Anonymous said...

HDB just announced that it will build 12,000 new BTO HDB flats in 2010. Anyone has any idea how that will affect the prices of HDB flats in the long run? Is there gonna be any effect? Will there be a drop in prices, or just slower increase?

Kojakbt said...

Hi all,

You guys might want to take a look at this graph: HDB Resale Index vs # of PRs in Singapore.

http://i50.tinypic.com/5z1n5i.jpg

Anonymous said...

If you drop the price now, many people will get burnt as they have forked out hefty sum for those over-priced hype flat like Dawson or Duxton. Sure, these flats will appreciate in value, but that will depend on how you finance the loan in order to get handsome profit... ME, I PAID IN FULL IN CASH. People are telling me I am weird so you see the TWISTED LOGIC of Singaporeans. 30 YEARS LOAN AND MAX CREDITS are the SMART things to THEM hahahahah

I am only trying to highlight that only those who with solid $$$ stand to gain. Many are just BARELY.

It is like riding a TIGER now. Up or down the price people will complain.

I believe the mainstay price will only go up overall. Those who cannot to get even a smaller house now HELLO wake up. The FUTURE BODE ILL TO YOU. THIS PREDICTION, NONE WILL BE CAUGHT OFF GUARD.

After I got myself a decent flat, It is like I have offloaded a awesome burden... NOW I ONLY WORRY BEING OUT OF JOB AND FALL SICK.

GOOD LUCK TO THE POOR AND WASH-OUTS HERE. YOU ARE ALL ON YOUR OWN NOW.

Anonymous said...

one ultimate way to reduce and stabilize HDB prices is to replace Mah Bow Tan. It's easy for ministers to collect million dollar salaries and absolve themselves of any responsibility or accountability

13/1/10 15:42


NOT TRUE. I SAY REPLACE THE MASTER OF MR MAH.

Anonymous said...

Why bother about what...... and well educated. Just go.

Yes you are right. I am planning to emigrate in 8 years time. My fully paid flat here will be used for generating monthly rental for me. I have more imporatnt thing to do than worry about these things. (that will never be solved and VEXING)

Anonymous said...

Lucky,

some errors?
"The table shows that the total population has increase by 17.6% (8.6% for residents) over the past 5 years but the number of new homes increased only by 1.2%."

Should it be 16.7%, 8.0% and 1.2% respectively?

Nonetheless, thanks for the article.

Aurvandil said...

For Total Population, the % change is (4839.4/4114.8)-1.

For Resident Population, % change is (3642.7/3366.9)-1.

You cannot add up the annual % change to obtain the % change from 2003 to 2008 as the % base is changing on a year to year basis.

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

I hate to say this and I've tried to highlighted it in Mr Tan's blog, but his analysis is flawed because there is no direct cor-relation between population growth and HDB. A more accurate analysis would be to estimate increase in number of potential homeowners, which would be define as newly weds, singles turning 35, PR families moving into singapore, etc.

Having said that, any company supplying goods for sale in the marketplace will do demand forecasting, so MBT's excuses are frankly, pathetic.

Aurvandil said...

To Anon 13/1/10 20:27

There are many people who do not meet these criteria. Where would they stay? Where do you think they are currently staying?

sgcynic said...

One thing we have to admire Mah Bow Tan - his courage; he is thick-skinned enough to defend an undefensible stand. In the private sector, he would be sacked already.

Anonymous said...

many, how many cannot afford(even if i can afford a modest home - away from rich and hot area - less than half an hr drive to business district)?

claim cannot afford and don't want to even cough out COV which cost you only a month salary of your salary is two different stance.

66% and more surely can afford?

hmm...even trash pickers own a flat if not..condo.LOLL

Anonymous said...

be a beggar or busker in orchard area. sure can afford flat.

no,can BUY CONDO even!hahahaahah

(life is that good in sg)hahahahaha

DanielXX said...

HDB deputy CEO made a slip when he said the mission of HDB is to support prices. To me that is moral corruption, and reason alone to audit the entire setup of the HDB Board.

Anonymous said...

most will start work in their twenties. most are expected to live beyond 80 and probably choose to work till they cant work anymore because sinkapore is a very very boring place to live and for most, work is their only identity and self worth.

let say you stop work at 70, you still got more than 10 years of retirement to rot at home now bad right?

so how many years of working life together with your spouse? each almost 50 years of working life keeping sg inc going.

so what is 30 years loan lah?

short lah! lol

Anonymous said...

"To me that is moral corruption, and reason alone to audit the entire setup of the HDB Board."

why don't you ask the opposition to table a motion on that in parliament?

if can't and won't, what makes you think voting more of these idiots into parliament will force miw to open ALL their books and account?

naive

Anonymous said...

Profit? In actual fact, the next generation is paying for your profit and retirement.

Just ain't right...

Anonymous said...

better still. show us what a hero you are.

walk up to lky and say it to his face he is morally corrupt.

wait..oh, i forgot. we have the opposition to do that for us.

yes, they will walk up to lky and call him morally corrupt.

Anonymous said...

"Profit? In actual fact, the next generation is paying for your profit and retirement.

Just ain't right..."

the next generation will cash out and emigrate to places that will stretch their investment and dollar.

even that, the gov deserves credit.

Anonymous said...

To sum it up, this is a case of

1. Bad planning
2. Asset bubble

The end result is always the same. High prices now and crash later. The second phase is happening now all over the world - Spain, Dubai, UK, USA, etc. Singapore, China, will be next.

One simple solution is not to buy now, rent instead, and wait for the coming crash.

Anonymous said...

i am waiting for the coming crash too so i can make a huge profit and laugh at those who buy high


i am hoping for some bad news(or the opposition to kick pap asses for high prices to take effect) so sg can sink and i will be well position to profit when sg SINK.

keeping my finger cross and rubbing my hands

Anonymous said...

Not only you will be rubbing your hands, foreigners will be rubbing you know where.LOL

contrarian said...

You're right, the high prices are caused by the easing financing policy. Many people determine the maximum they can loan, and then use that figure to buy whatever they can.

To stop the effect of easy financing, it needs to be gradually reversed.
1. Reduce length of loan period
2. Increase the cash downpayment from 5% back to 10% and then more.
3. Reduce the loan financing maximum from 90% to below 80%
4. Increase interest rates
5. Reduce the ease of use, and quantum of CPF use

All of which must be done gradually to avoid a substantial housing deflation like in the early part of the decade.

Anonymous said...

Fair view contrarian.

Anonymous said...

if the cumulative measures will to be adopted without eventually bringing down the price of homes, opportunist will still draw blood with the authority.

cherry pickers want cheap which means, crash!

understand?

Anonymous said...

For those who are thinking of migrating, please don't do it because you don't like the place or the government or the people. You should do it because you like the place you're going to. If you leave because you think life is terrible in Singapore, you'll find other reasons to be miserable in the new country. There are many who have migrated and regretted their decisions. Think carefully before you do it. Yes, migration is a solution but is it the solution for you.

Anonymous said...

You migrate cause you like the people, govt, place elsewhere better than here.

Dun use black and white terminology. People tend to want to stay, moving because the situation is unberable is different from moving at the slightest difficulty. If you are a native Singaporean and can make it here (not civil service), you can make it any where.

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

Please don't emigrate just because PAP is giving a hard time to you. Don't let PAP "kick" you out. We should be kicking them out!

Anonymous said...

If you migrate because you think it is unbearable here in Singapore, what makes you think you will find it bearable in your new home? You already know what you don't want. Now you have to know what you want.

Every country has it's good points and bad. You have to weigh all the factors to see if your desired country suit you and your family.

Just because you're pissed up with PAP is not good enough reason unless you're being persecuted like some of the opposition party candidates. PAP cannot be your whole life in Singapore. There is more to that than life, family, friends, etc. You can't bring everything with you when you migrate.

My point is, do your homework thoroughly. You will know what is right for you.

Vote Tampines GRC Out said...

Your homework for the coming GE is to VOTE MAH BOW TAN OUT.

cy said...

i agree that cutting loan tenure, plus stricter loan financing will help in a way to curb prices.

Other ways like a slower rate of immigrant growth,stricter rules on investing HDB flats for rental will also help to curb demand.

I propose another more radical method to solve problem.

Split HDB into 3 units and privatise them, give the shares of these split HDB units to Singapore citizens. However, they are not allowed to sell these shares, they can only get dividends from the profits of these units, something akin to REITs.

Thus,if the units make profit due to higher prices, singaporeans will also benefit thro higher dividends. If prices fall,singaporeans get less or no dividends but flats prices will be lower.

Govt should only be involved in providing rental flats for low income singaporeans and monitor for any cartel action by the units. Private developers should be encouraged to participate.

Financing should not be provided by the units, instead CPF should take over the job, afterall we are using our own money to lend ourselves to buy flat.

Anonymous said...

Although they have increased the number of BTO flats, but the waiting period is SO DAMN long, they can never satisfy the current and future growing demand...

The worst is, all still have to go through balloting.. You can say im selfish, but i think the allocation of new flats should all go to first-timers...

Anonymous said...

Very simple solution. MBT can officially state that the population growth will be limited to say 5.5 million max. The will stop the fear due to expectation that with more influx of FT prcs of HDB can only go up. How many BTO flats can HDB builds ? How much land do we have ? The issue is demand and supply. MBT, use your brain! Urgent steps need to be taken now before million dollars HDB flats become a reality.

Anonymous said...

The idea of the ruling party is to ensure that prices of HDB keep going up and up as the majority of owners property owners and occupiers are HDB dwellers. This is one of the key incentive to garner more votes. That is why you see they played on the supply (curtailed and slowly releasing) and demand (relaxing and very lax in allowing all sorts of Chinese, Indians and foreigners to Singapore)

Can you see more clearly now.

Anonymous said...

At the end of the day, if the decision makers in a country, say X Country are top world earners, do you think the leaders want to continue to protect their positions and think of all ways to remain in power, like adopting our innovative GRC and nominatd MPs voting system, make public housing higher and higher , curtailed freedom of speech by monopolising the press, extend cooling period yet short election campaigning time and fear factor. Coming back to Singapore HDB prices are emotionally and closely tied to voting system and there are statistics to back the trend. So HDB prices will always going up and up especially during election time. The more if the government feel insecure, the more they push HDB prices higher. It really works. People want to feel good and Singaporeans are easily satisfied as they are kiasi, kiasu and greedy anyway. So it is natural that they should be kept in power as they deserve it because they have the ability to persuade and convince a small population of Singaporeans who are happy anyway to see their HDB go up and their wealth improved. The majority of HDB Singaporeans are happy and fully endorsed it as you can see election after election they are return overwhelming. This is good for the majority of the Singaporeans. Probably you are the minority few. This is my analysis.

Anonymous said...

Look, the Japanese have 100 year mortgages and they are not complaining. Once you get used to it, it'll be ok. In most 1st world countries 30 year mortgage is normal. Furthermore, not many countries have Singapore house ownership level. Perhaps the government should do nothing and let the market take care of itself.

Francis said...

it is not house ownership. we are infact paying sky high prices just for a 99 yr lease. Good luck to those who have bought a 500k flat with 60+yrs lease left in Queenstown, Boon keng, Ang Mo Kio, Bedok, Clementi. Goverment is not gonna compensate you when the lease is up. If it is up for enbloc some 20 yrs later, do you think the compensation will be enough to purchase you a new flat as the lease balance would be less than 50yrs? What about lease buy back? A young couple who are in their 30s who not have enough lease to sell back to the goverment as the lease would only be just nice for the couple who would be in their 60s with a lease balance of 30yrs. Good Luck to those who bought these flats. PRs will just pack their bags and leave while singaporeans might even be homeless when they reach old age.

lim said...

@Francis

Agree with you on this, I think 10 years later, when those flats have remaining 50 or less tenures, they will be unlikely to command a high price when the owners want to sell them..

Anonymous said...

Tenure is just a number. Bricks and
mortars last longer.

Anonymous said...

The HDB masters KNOW and DUN KNOW.

KNOW - They had stopped building as many flats 4 years back because they have many backlogs to clear like in Jurong. The trick is to limit the supply and increase the flow (FT)

DUN KNOW - Now they claim to be building many flats because the price is sooooo GOOD. They Dun know whether this price can be sustained. (MORE FT , IRs, can increase GDP????) And this time it is BTO. Lock in that price first.... Singaporeans deserved to be whipped for being foolish....Well EVERY GENERATION WILL ALWAYS WHIMPER. This one is like the 1998s again.

Anonymous said...

When the water level falls, turn on the tap and raise the level and when the water rises too high, turn off the tap to ease the level.
We should enjoy a stable supply of water for everyone.

Anonymous said...

The tap is rusty, u can hardly turn it.

Water is scarce, water flow is intermittent, yet so many thirsty pple.

-tt

Xtrocious said...

To Francis

I think that the declining tenure is something that the government is well aware of - they can't possibly repossess the flats as that may lead to social revolt...

My guess is that they are trying to pre-empt the situation by having SERS i.e. renew the leases before they come due (of course, the flat "owners" are made to top up each time - no free lunch)...

And that's one possible reason (IMHO) why people are still so bullish in buying resale units - they are betting that the government would not take the drastic step of repossession when the lease is up...

Anonymous said...

I am a genuine buyer who wants to setup a family but unable to buy a flat as agents tells me I cant get a flat with 10k cash. I am very disappointed with the government with their eagerness to fast track Singapore yet forgetting that when they are richer, we are poorer. So what if we have tonnes of CPF and we need to fork out cash to buy a flat. COV, 5% bank loan, Reno etc. If we have no cash on hand, even we have 1 million in the CPF account, we will still die of hunger.

Anonymous said...

There are lotsa middle income owners who paid fully for their HDB flats and bought another private property, likely a freehold fully paid as well. Most are enjoying life in the private property and renting out the entire fully paid HDB flats for side income. This may be a reason for lack of supply of subsidised flats. My guess is there is a sizeable number of people operating this way now. Is it illegal to do this?

Kojakbt said...

Yes, it's illegal to live in private units and rent out your HDB. But it's ok if you live in HDB and rent out your private units.

Anonymous said...

I'm a newly wed also. Has been hunting flat for 5 month, the fact to me is without 30COV, you cannot secure a flat...

Kojakbt said...

You guys might want to read this: http://www.temasekreview.com/2010/03/24/singapore-teacher-burdened-by-hefty-mortgage-loan-for-hdb-flat-before-marriage/

Very sad to see our youngsters end up in this kind of situation these days...

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