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Affordability of HDB flats - a young couple's story
I REFER to HDB's reply on Monday, 'How HDB keeps it affordable'.
From the points raised, I feel HDB has not adequately addressed the affordability concern.
My husband and I are a young couple still looking for our first matrimonial flat. We belong to the sandwich generation that exceed HDB's income ceiling for subsidised housing yet need an HDB flat in a mature estate to support elderly parents.
While it is true that cash over valuation (COV) is the excess amount over a flat's valuation that a buyer willingly pays for a resale flat in a free market, in current market conditions buyers who pay COV only when there are perceived merits in the flat beyond its valuation will be sidelined. In time-sensitive situations (such as a young couple getting married), buyers have little choice but to pay COV to outbid other bidders and secure their flat of choice. Market rationality becomes clouded, creating an upward price spiral.
Property agents' typical answer when asked to justify COV is that this is what the market is commanding now. Almost none can point out exceptional fundamentals of the flat not already taken into account in the valuation.
I have recently seen flats in need of renovation with a COV of $15,000. It was unbelievable that buyers were willing to pay this amount. And the sellers were happily sitting on the sidelines, waiting for an even better offer. As a young couple, we are priced out of the market by COVs at such levels, despite a combined household income in excess of $8,000.
Grace Ho (Ms)
Latest comments
Anyone who doesnt want to ban COV cannot be an actual buyer because actual buyer would want to buy low.
So this writer must be a HOUSING AGENT!
Posted by: kennyticks2010 at Sat Sep 05 16:52:13 SGT 2009
To call for COV to be banned all together will not solve the problems as people will not want to sell their flats and the whole property market may crash because of that.
I have 2 proposals that hopefully can generate a win-win situation for both the seller and buyer.
Proposal 1 – To fix a 5% cap on the COV depending on the valuation of the flat. Example a $300,000 flat, the seller can only ask a maximum of $15,000. If he needs to sell the flat fast enough, he may have to lower his COV down.
Proposal 2 – Banned unofficial money transaction altogether but authorized HDB to pay seller 5% of the Valuation in Cash. Since we are already going to loan the full amount, we will eventually pay back the 5% which HDB fork out.
Posted by: Anntonii at Sat Sep 05 16:50:37 SGT 2009
mamas who come in and buy and sell and make money.
Hope you enjoy yours.
Posted by: kennyticks2010 at Sat Sep 05 13:30:33 SGT 2009
MBT is telling a different story now.
HDB is a public housing organisation that should make all flats affordable TO ONLY SINGAPOREANS and not allow speculation like COV and sell to PRs and FOREIGNERS.
HDB officers are allowing the housing agents to much freedom and causing duress to other older singaporeans.
Posted by: kennyticks2010 at Sat Sep 05 13:29:58 SGT 2009
Making it affordable fairly to both citizens and PRs should be the correct way. For Citizens, they toiled with the country to what Singapore is and they are the ones who will do and die with the country. PRs are people who can move, and they always have their own country to go back to in times of grave difficulty. Singaporeans must be offered to buy HDB flats at complete cost minus, and prices be based on equivalent 99 year apartments constructed by developers, minus their profits, minus the % due subsidy? Resale flats must be cheaper than new flats, for they are older, and used. Limit financing of these older flats to just 70% loan facility. Because their depreciation had taken place. And the time for them to be demolished and rebuilt is there. For PRs, they should be limited in quantity available to them. Limit maximum say, 15% of all total number of flats to them to buy. They can afford, and they should pay higher, because like it or not, they are not citizens and thus they should not be provided with subsidies. HDB should add a 'subsidy recovery', which could be in the likes of 30% to 60% more than the selling price, and these be recoup by the HDB, and back to the IRAS, go back to where they should be returned to the Singapore tax reserves. Flats available to PRs should also be controlled, in the same manner as the racial enclaves are controlled, so that these are distributed and not become concentration groups in certain precincts. Otherwise, when Singapore meets difficulties, and they leave in droves, we do not end up with huge voids created in parts of Singapore. This way, we as Singaporeans will not be affected of our very livelihood, a country we try to build together, and to be impacted by the desire of people coming into to Singapore, and making Singaporeans so emotionally affected, including the pressures of making a living, procreation and having tensions in the family every morning, and basic costs of living. PRs come and go, Singaporeans must be encouraged to stay. In times of calamity, we depend on ourselves to pull ourselves out of the doldrums...and only the very committed PRs, who would converted to Singaporean citizens, would stay and work together. There must be a price to pay for by the PRs when they want to come to Singapore and live in our midst, a country created through the toils and sweat and blood of our fathers. We should not end up with them coming here, and creating such a huge social impact, that affected so much our livelihood, plunging every household into a state of livelong debtor to the state. We want our children to grow up well, and be able to enjoy, while they face the global challenges. With so much tension and burden on cost of living issues, it is extremely for the majority of Singaporeans to consolidate together to remain competitive and continue to create a future together. Most will be belabored to tide over the cost of having a roof over their heads, food on the table, and costs involved for aging parents.
Affordability of HDB flats - a young couple's story
I REFER to HDB's reply on Monday, 'How HDB keeps it affordable'.
From the points raised, I feel HDB has not adequately addressed the affordability concern.
My husband and I are a young couple still looking for our first matrimonial flat. We belong to the sandwich generation that exceed HDB's income ceiling for subsidised housing yet need an HDB flat in a mature estate to support elderly parents.
While it is true that cash over valuation (COV) is the excess amount over a flat's valuation that a buyer willingly pays for a resale flat in a free market, in current market conditions buyers who pay COV only when there are perceived merits in the flat beyond its valuation will be sidelined. In time-sensitive situations (such as a young couple getting married), buyers have little choice but to pay COV to outbid other bidders and secure their flat of choice. Market rationality becomes clouded, creating an upward price spiral.
Property agents' typical answer when asked to justify COV is that this is what the market is commanding now. Almost none can point out exceptional fundamentals of the flat not already taken into account in the valuation.
I have recently seen flats in need of renovation with a COV of $15,000. It was unbelievable that buyers were willing to pay this amount. And the sellers were happily sitting on the sidelines, waiting for an even better offer. As a young couple, we are priced out of the market by COVs at such levels, despite a combined household income in excess of $8,000.
Grace Ho (Ms)
Latest comments
Anyone who doesnt want to ban COV cannot be an actual buyer because actual buyer would want to buy low.
So this writer must be a HOUSING AGENT!
Posted by: kennyticks2010 at Sat Sep 05 16:52:13 SGT 2009
To call for COV to be banned all together will not solve the problems as people will not want to sell their flats and the whole property market may crash because of that.
I have 2 proposals that hopefully can generate a win-win situation for both the seller and buyer.
Proposal 1 – To fix a 5% cap on the COV depending on the valuation of the flat. Example a $300,000 flat, the seller can only ask a maximum of $15,000. If he needs to sell the flat fast enough, he may have to lower his COV down.
Proposal 2 – Banned unofficial money transaction altogether but authorized HDB to pay seller 5% of the Valuation in Cash. Since we are already going to loan the full amount, we will eventually pay back the 5% which HDB fork out.
Posted by: Anntonii at Sat Sep 05 16:50:37 SGT 2009
mamas who come in and buy and sell and make money.
Hope you enjoy yours.
Posted by: kennyticks2010 at Sat Sep 05 13:30:33 SGT 2009
MBT is telling a different story now.
HDB is a public housing organisation that should make all flats affordable TO ONLY SINGAPOREANS and not allow speculation like COV and sell to PRs and FOREIGNERS.
HDB officers are allowing the housing agents to much freedom and causing duress to other older singaporeans.
Posted by: kennyticks2010 at Sat Sep 05 13:29:58 SGT 2009
Making it affordable fairly to both citizens and PRs should be the correct way. For Citizens, they toiled with the country to what Singapore is and they are the ones who will do and die with the country. PRs are people who can move, and they always have their own country to go back to in times of grave difficulty. Singaporeans must be offered to buy HDB flats at complete cost minus, and prices be based on equivalent 99 year apartments constructed by developers, minus their profits, minus the % due subsidy? Resale flats must be cheaper than new flats, for they are older, and used. Limit financing of these older flats to just 70% loan facility. Because their depreciation had taken place. And the time for them to be demolished and rebuilt is there. For PRs, they should be limited in quantity available to them. Limit maximum say, 15% of all total number of flats to them to buy. They can afford, and they should pay higher, because like it or not, they are not citizens and thus they should not be provided with subsidies. HDB should add a 'subsidy recovery', which could be in the likes of 30% to 60% more than the selling price, and these be recoup by the HDB, and back to the IRAS, go back to where they should be returned to the Singapore tax reserves. Flats available to PRs should also be controlled, in the same manner as the racial enclaves are controlled, so that these are distributed and not become concentration groups in certain precincts. Otherwise, when Singapore meets difficulties, and they leave in droves, we do not end up with huge voids created in parts of Singapore. This way, we as Singaporeans will not be affected of our very livelihood, a country we try to build together, and to be impacted by the desire of people coming into to Singapore, and making Singaporeans so emotionally affected, including the pressures of making a living, procreation and having tensions in the family every morning, and basic costs of living. PRs come and go, Singaporeans must be encouraged to stay. In times of calamity, we depend on ourselves to pull ourselves out of the doldrums...and only the very committed PRs, who would converted to Singaporean citizens, would stay and work together. There must be a price to pay for by the PRs when they want to come to Singapore and live in our midst, a country created through the toils and sweat and blood of our fathers. We should not end up with them coming here, and creating such a huge social impact, that affected so much our livelihood, plunging every household into a state of livelong debtor to the state. We want our children to grow up well, and be able to enjoy, while they face the global challenges. With so much tension and burden on cost of living issues, it is extremely for the majority of Singaporeans to consolidate together to remain competitive and continue to create a future together. Most will be belabored to tide over the cost of having a roof over their heads, food on the table, and costs involved for aging parents.
