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Tan Chuan Jin tell you why same HDB flat in same block is different price

Scrooball (clone)

Alfrescian
Loyal
http://sg.news.yahoo.com/blogger’s-post-on-hdb-flats-draws-reaction-from-mos-tan-chuan-jin.html

MOS Tan Chuan Jin responds to blogger’s post gone viral
Yahoo! NewsroomYahoo! Newsroom – Thu, Apr 26, 2012

Minister of State for Manpower and National Development Tan Chuan-Jin has responded to a buzzy blog post on the increasing prices of HDB flats.

On Monday, blogger Gintai, self-described as a Chinese Singaporean working as an SMRT train officer and living in the east, wrote a post titled “Is this my Singapore?My home and country?”

The first part of the post dealt with how the blogger learned that a colleague bought a brand new 4S (four-room simplified) HDB flat on the 16th floor of 221A Bedok Central a year and a half ago, and how another colleague couldn’t afford a same-sized flat at the same block recently because the price had gone up by $68,000.

“You will surely feel cheated and bitter over this $436,000 4S flat purchased as a first timer direct from the HDB,” Gintai said. “Will you support this government since you are so bitter and sore? I doubt so.”

The post had 305 comments as of Thursday early evening.

In a Facebook note posted at 3:48am on Thursday, Tan explained how flats are priced in Singapore.

Read Tan’s response in full below:

Providing a House...Building a Home

A number of you have forwarded to me a blog post written by netizen “Gintai”. He shares about his conversation on housing issues with two colleagues, before moving on to talk about the perceived inequities between locals and PRs in Singapore. He also asserts that he is not proud to be a Singaporean.

I will address the issue of PRs in another note. Let me just talk about the housing situation in Singapore. Is it really so dire? Is the HDB flat really so out of reach?

For a start, we need to understand why the flat pricing system works the way it does. Gintai seems unhappy that similar sized flats are not priced the same. When determining the prices of flats offered, HDB factors in the costs of building the flat as well as the prevailing market conditions at the time of the offer and the individual attributes of the flats. Therefore, a flat on the 16th floor and one on the 2nd floor would be priced differently. The price of a similar-sized flat in Jurong West and in Queenstown would differ. A flat near key amenities would be valued more than one with less.

Is there really a difference in value? Many Singaporeans who have sold their flats know that these different values would surface immediately in terms of the price their different flats can command. Should we therefore price them all the same? If they were, everyone would just wait for a flat on the top floors in a matured estate. And some would make huge capital gains compared to others when they sell.

Gintai's colleague, “Anak Abu”, lamented about his flat loan instalment payments. While I don't know Abu's full details, as a first time HDB buyer, Abu's flat's price would include subsidies and he would be eligible for the Additional CPF Housing Grant. These would reduce the subsidised selling price considerably. But even with the grant, it’s striking to note that on a stated income of around $1,850, Anak Abu chose to buy a four room flat (not a smaller one), at a Sale of Balance Flat exercise (and not a mainstream BTO flat), in a mature estate (as opposed to a non-nature estate), near the top floor (rather than lower down), and next to the town centre (and not further away).

This is a common scenario. At my Meet-the-People Session, my residents come to see me to appeal for a bigger flat at choice locations. I understand the desire to upgrade and to live well, but there is also a need to take a hard look at personal finances as well, and to make the right choices. It would seem that Anak Abu had over-stretched himself here. For him, there will be less to set aside for other needs. It’s a decision each family has to make.

In general, even as we allow the use of CPF funds to pay for the monthly instalment for a flat, the money in the Special Account and the Medisave Accounts is not touched. Criteria for Minimum Sum is also factored in to help ensure that some money is set aside for retirement. Retirement sufficiency would be determined by an individual's future income stream and his outlay on his home.

Eventually, when Anak Abu moves on in years, and when his children are older, he would own his Bedok flat. If he needs to supplement his retirement needs, he could rent out a room or move to a studio flat. If Anak Abu had bought a more affordable flat, he would have had more for retirement. If he had chosen not to buy the flat at all, he would have rented and would have more money in his CPF; but he would have had more cash outlay over the years and he would not have owned his own home.

Gintai also shared about another colleague, "Zaidi Blond" who was eyeing a similar unit in the same Bedok block as Anak Abu, but was now facing a selling price that is supposedly $68,000 more than what it cost a year and a half ago. He asserts that Singaporeans would feel “cheated and bitter”.

Why the difference? Over the course of one and a half years, the value of the flat may have shifted. HDB needs to price the flats with reference to their prevailing market value. The same rationale, as explained earlier, applies. Due to differing economic circumstances, there have been instances where flat prices dropped. When that happened, the ones who were angry were those that had bought earlier. It is human nature for all of us to want to get the best deal with the least risks.

Subsidies and grants remain in place for Singaporeans in order to keep a range of different flat types affordable for Singaporeans at different income levels.

Do buy within your means.

I know that these are emotive issues. But HDB does indeed cater to the vast majority of Singaporeans, from those in rental flats, to those who are comfortably in the middle classes. 80% of Singaporeans live in HDB flats. 90% of them own their own flats.

Would there be affordable and available options out there for you? The answer is yes. Our commitment is to ensure that for first time buyers, you will find a range of different sized flats in non-matured estates available, with subsidies, priced affordably for your respective income levels.

We will help provide you a house so that you can create a home.

Tan Chuan-Jin

Conclusion of the story: The m&d Anak Abu should not have chosen to buy 4 room in mature estate on a $1,850 salary. Earn $1,850 you can dream on la!
 

Cestbon

Alfrescian (Inf)
Asset
Salary below $2k buy 4 room. Prepare to jump flat.
Even salary $3k also very difficult to make repayment for the 4 room flat. In the end no saving for retirement in CPF.
 

Jlokta

Alfrescian (InfP)
Generous Asset
Conclusion of the story: The m&d Anak Abu should not have chosen to buy 4 room in mature estate on a $1,850 salary. Earn $1,850 you can dream on la!

Tharman says $800 can buy HDB already, so earn $1850, this abang should be well within his means to afford the flat.

Either Tharman or Abang is not telling the truth. :wink:
 

Cestbon

Alfrescian (Inf)
Asset
Tharman says $800 can buy HDB already, so earn $1850, this abang should be well within his means to afford the flat.

Either Tharman or Abang is not telling the truth. :wink:

Both are not telling truth. $800/month eat what??? One person ok. For family of 4?????? No need to pay bill/transport...........
Even 100 installment by CPF.


That abang should buy 2 room/ 3 room( or value less than $200k).
 

chonburifc

Alfrescian (Inf)
Asset
HDB = Public Housing

Sinking land is the only fucking cuntry in the world that allow non-citizens to compete with citizens to buy Public Housing.

Cannot even look after own citizens, want to look after other citizens. Very good heart leh. Thanks to the 60.1% for making this happen.
 

Scrooball (clone)

Alfrescian
Loyal
That abang earn peanuts, but want to live on the moon literally.

- big 4 room flat to breed more kids
- mature estate so that he can have easy access to cheap hawker food
- high floor so that he can bang the missus on a higher level and not be seen by opposite neighbours
 

Jlokta

Alfrescian (InfP)
Generous Asset
HDB = Public Housing

Sinking land is the only fucking cuntry in the world that allow non-citizens to compete with citizens to buy Public Housing.

Cannot even look after own citizens, want to look after other citizens. Very good heart leh. Thanks to the 60.1% for making this happen.

Yup, thats spot on!!

Housing is no longer public when pappies and HDB made it into a money making scheme.
 

keling is shit

Alfrescian
Loyal
I know that these are emotive issues. But HDB does indeed cater to the vast majority of Singaporeans, from those in rental flats, to those who are comfortably in the middle classes. 80% of Singaporeans live in HDB flats. 90% of them own their own flats. :rolleyes:

impressive figure from doggie general tan.

but he never tell you how many of those 90% that 'own' the hdb are still paying for it, and those that eventually paid fully for it took how many years to clear the loan. :mad:
 

BuiKia

Alfrescian (InfP)
Generous Asset
I thought Tharman say no need to fork out cash?

Both are not telling truth. $800/month eat what??? One person ok. For family of 4?????? No need to pay bill/transport...........
Even 100 installment by CPF.


That abang should buy 2 room/ 3 room( or value less than $200k).
 

Jlokta

Alfrescian (InfP)
Generous Asset
I know that these are emotive issues. But HDB does indeed cater to the vast majority of Singaporeans, from those in rental flats, to those who are comfortably in the middle classes. 80% of Singaporeans live in HDB flats. 90% of them own their own flats. :rolleyes:

impressive figure from doggie general tan.

but he never tell you how many of those 90% that 'own' the hdb are still paying for it, and those that eventually paid fully for it took how many years to clear the loan. :mad:

you never own the flat, even if you've fully paid up your loan.

this tan CB paper general probably never stayed in one and his sar kar por lumpar assistant just fed him with the info and he just vomit out what he was told.
 

Scrooball (clone)

Alfrescian
Loyal
Actually it is possibly true that if you earn less, you can afford a flat more easily than someone who earns slightly more. The key word is 'slightly more'.

HDB has some grants for very low income people.
 

cunnilaubu

Alfrescian (InfP)
Generous Asset
Tharman says $800 can buy HDB already, so earn $1850, this abang should be well within his means to afford the flat.

Either Tharman or Abang is not telling the truth. :wink:

Wrong! Abang wanted a 4-room flat, TCK say he can't affort it. So shd be either Tharman or TCJ is not telling the truth.
 

Scrooball (clone)

Alfrescian
Loyal
Buying beyond their means seems to be a common trait of abangs. $1,850 income want to buy a nice big 4 room flat in mature estate. The only way he can afford the flat is by topping up the shortfall with cash.
 

Confuseous

Alfrescian (Inf)
Asset
Chuan-Jin, there'll always be inequities

Chuan-Jin must be commended for coming out and trying to explain some of the government's rationale for doing things the way they do. But his comments are again proof that the government cannot think outside the box they have prescribed for themselves.

"But even with the grant, it’s striking to note that on a stated income of around $1,850, Anak Abu chose to buy a four room flat (not a smaller one), at a Sale of Balance Flat exercise (and not a mainstream BTO flat), in a mature estate (as opposed to a non-nature estate), near the top floor (rather than lower down), and next to the town centre (and not further away)." Chuan-Jin

- http://www.raviphilemon.net/2012/04/chuan-jin-therell-always-be-inequities.html
 

cunnilaubu

Alfrescian (InfP)
Generous Asset
Re: Chuan-Jin, there'll always be inequities

The main problem with HDB affordability is with the "prevailing market conditions". remove that and the price of the flat will be reduced substantially.
 
Z

Zombie

Guest
http://gintai.wordpress.com/2012/04/23/is-this-my-singapore/

For the one week of interactions, I learnt from TO Anak Abu that he had bought a 4S brand new HDB flat at Blk 221A Bedok Central on the 16th floor more than one year ago at $368,000. It’s only 87 sq m. The smallest 4 room flat.

That’s not all. I also learnt from him that another recently married Malay colleague Train Officer ‘Zaidi Blond’ wanted to buy a HDB flat in the same block cuz there are few left over unsold units due to some unknown reasons. They like to get their flats around Bedok area cuz it’s near to our working place at Tanah Merah station.

That colleague could not afford it due to insufficient CPF for the 20% downpayment. You see for the same 4S flat in the same block but at the second floor, the price has shot up to $436,000! Within one and half years, the same flat on second floor (TO Anak Abu’s flat is on 16th floor) has increased by $68,000 just like that! He had to give up. He had to try his luck in Sengkang or maybe get a three room flat instead.

Now the interesting question is why the price of the same flat at second floor instead of sixteen floor has gone up so high by $68,000? The costs of the flats should be the same cuz they were built at the same time. Why is it so?

this blogger's main issue:
2nd floor flat selling at $68K higher than a 16th floor flat (that was selling at $368K one and a half year earlier)... implying a price increase of 18.5% over one and half year, even though a 2nd floor flat is supposed to be cheaper....
core issue = pricing

the MP's reply:
makes people think that the issue being 16th floor flat is $68k more expensive than 2nd floor flat and he goes on to personal financing issues...
bulk of the answer = free financial education

Should we therefore price them all the same? If they were, everyone would just wait for a flat on the top floors in a matured estate.

my head:
:*::biggrin::*::biggrin::*::biggrin::*:
 
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