Give us HDB flats AT COST, not 30 yrs Mortgage Enslavement!

[Goh Meng Seng]

http://singaporealternatives.blogspot.com/2010/03/give-us-hdb-flats-at-cost-not-30yrs.html


I have created a <a href="http://www.facebook.com/group.php?gid=370393600858">Facebook Group</a> named as above. The reasoning is as below:


HDB used to be a very unique and successful socialist approach to provide basic adequate housing for Singaporeans. The HDB scheme was made possible by the power of Land Acquisition Act that allows the government of the day to acquire land at dirt cheap prices. It is a social contract between the people and the government to empower them to acquire land at cheap prices while in return, the people's basic housing needs are taken care of by the government providing HEAVILY SUBSIDIZED HDB flats to more than 80% of the population.

The break down of Cost price of HDB was made available back in 1981 when the government showed us how much COST SUBSIDIES have been given to the citizens.

However, since the introduction of "Asset Enhancement Program" in early 1990s and subsequently the introduction of "Market Price Subsidy" in the pricing of new HDB flats, new HDB flats are no longer cheap. The PAP government has subtly avoided their responsible embedded in the social contract. The PAP government has used very creative accounting to avoid showing how much money they have earned from selling new HDB flats while shamelessly claiming that a "Market Subsidy" was provided. This is no more than mere "DISCOUNTS" with no real subsidy given.

When asked to provide the breakdown of the COST of building these HDB flats, there was surreal silence from HDB. Why could they provide breakdown of cost back in 1981 while reluctance to provide it now?

We just want an honest price from HDB for our young Singaporean couples, at least a COST PRICE of HDB for our young in return for the enormous power that we have given the PAP government in Land Acquisition Act which it has used to acquired huge land stock at dirt cheap prices.

This group will act as a campaign to pressure the PAP government to fulfill their role as a responsible public housing provider. To fulfill their part of the social contract as embedded in the Land Acquisition Act

 

[Ramseth]

Economically, you should understand this. There's no way (whether Mah Bow Tan or whoever in charge) could sell HDB at cost now. The repercussions in the resale and condo markets would be tsunamic. However, there's a a way, that's to revert to rental at cost system.

 

[Goh Meng Seng]

Economically, you should understand this. There's no way (whether Mah Bow Tan or whoever in charge) could sell HDB at cost now. The repercussions in the resale and condo markets would be tsunamic. However, there's a a way, that's to revert to rental at cost system.

This is not entirely true because we have the resale market for HDB flats.

Resale market prices are more indicative of private condo markets.

New HDB flats market is totally different from Resale HDB market. i.e. New HDB flats market, HDB is monopoly of supplier with many buyers. Resale market? Many buyers, limited but still numerous sellers.

Goh Meng Seng

 

[Goh Meng Seng]

From:
http://www.facebook.com/group.php?gid=370393600858&ref=nf

My father's generation may just pay 10 to 15 yrs mortgage to get a decent HDB flat, I have to pay 20 yrs. But now, my children in future, will have to pay 30yrs or even more. Yet, Minister Mah still claims that HDB is affordable!

For young couples nowadays, don't expect to have any retirement at 62. You will be forced to work until 75 or more. This is because if you marry at 30 yrs old, you won't be able to finish paying up your mortgage before 60 years old!

And please bear in mind, according to HDB's calculations, you will be using all the available money in your CPF! You will have minimum amount of money by the time you reach 60. This is the kind of plan PAP government and HDB has installed for you.

 

[FuckSamLeong]

This is not entirely true because we have the resale market for HDB flats.

Resale market prices are more indicative of private condo markets.

New HDB flats market is totally different from Resale HDB market. i.e. New HDB flats market, HDB is monopoly of supplier with many buyers. Resale market? Many buyers, limited but still numerous sellers.

Goh Meng Seng

Solution, you sell the subsidised flat at the price you first paid for with?

 

[Queen Seok Duk]

Mah Bow Tan has lost much weight recently.

You're bad, GMS. 窮追猛打，可憐老寶沒有一頓安樂茶飯。

 

[Goh Meng Seng]

Mah Bow Tan has lost much weight recently.

You're bad, GMS. 窮追猛打，可憐老寶沒有一頓安樂茶飯。

Not my fault.... 他拿人钱财（百万薪金）替人消灾（不让PAP输）。我们虽同籍贯，但不同立场。。。海南人常说，自己人，打死不相干。。。

 

[Ramseth]

说到穷追猛打，我对杨荣文也可能会被视为有此态度。但我站稳立场，无可抱歉。国家领袖，官位高踞外交部长，支持与呼吁原谅外遇与滥交

耸人听闻，不愧外交部长也 (外遇 + 滥交 = 外交)

 

[Queen Seok Duk]

明盛哥哥，不要在咬著我不放了。。。多隆多隆！

 

[Goh Meng Seng]

明盛哥哥，不要在咬著我不放了。。。多隆多隆！

你真是想把我笑死！lol

 

[Papsmearer]

http://singaporealternatives.blogspot.com/2010/03/give-us-hdb-flats-at-cost-not-30yrs.html


I have created a <a href="http://www.facebook.com/group.php?gid=370393600858">Facebook Group</a> named as above. The reasoning is as below:


HDB used to be a very unique and successful socialist approach to provide basic adequate housing for Singaporeans. The HDB scheme was made possible by the power of Land Acquisition Act that allows the government of the day to acquire land at dirt cheap prices. It is a social contract between the people and the government to empower them to acquire land at cheap prices while in return, the people's basic housing needs are taken care of by the government providing HEAVILY SUBSIDIZED HDB flats to more than 80% of the population.

The break down of Cost price of HDB was made available back in 1981 when the government showed us how much COST SUBSIDIES have been given to the citizens.

However, since the introduction of "Asset Enhancement Program" in early 1990s and subsequently the introduction of "Market Price Subsidy" in the pricing of new HDB flats, new HDB flats are no longer cheap. The PAP government has subtly avoided their responsible embedded in the social contract. The PAP government has used very creative accounting to avoid showing how much money they have earned from selling new HDB flats while shamelessly claiming that a "Market Subsidy" was provided. This is no more than mere "DISCOUNTS" with no real subsidy given.

When asked to provide the breakdown of the COST of building these HDB flats, there was surreal silence from HDB. Why could they provide breakdown of cost back in 1981 while reluctance to provide it now?

We just want an honest price from HDB for our young Singaporean couples, at least a COST PRICE of HDB for our young in return for the enormous power that we have given the PAP government in Land Acquisition Act which it has used to acquired huge land stock at dirt cheap prices.

This group will act as a campaign to pressure the PAP government to fulfill their role as a responsible public housing provider. To fulfill their part of the social contract as embedded in the Land Acquisition Act

Goh, this is a major problem and it cannot be addressed by simply selling flats at cost. The PAP has screwed things so badly, even they don't know or can't sell cheap flats anymore.

Lets say that HDB really follows what u proposed and sells flat at costs, and lest say the cost is $100K. What will happen to those who just bought a similar flat 2 months ago for $350K? I would be hopping mad if I paid for a flat and all of a sudden HDB decided to to lower the price or give it at cost. Lets say the HDB gives every one a heads up and says starting june 1st, we will sell flats at cost. Guess what? The market for both resale and existing flats will fall down the toilet. The market will start applying for these cheap flats and will not go anywhere near the resale market. People who must sell will have to drop the prices they are askingfor their flats by $100,000s, and in the process loss all their equity or lose money.

The immediate effect of selling flats at costs will be to lower the value of all flats in s'pore, as well as ripple out and lower the value of private property. Banks will be left holding mortgages on flats that are worth less than the loan. People who pay $300K and more for their flats will be kicking themselves, and the bank will have to foreclose on their properties. Even if the offer was made to sell only to first time home buyers, the furore would be huge. Why them? Why not others? And the effect would be still the same. If the HDB offers this to all its flats, people would much rather prefer to buy a $160K exec condo than a $900K private condo, again, killing the market for private property.

I agree that this is necessary, but once the prices have increased to what they are, its very hard to lower them. Lower property prices has a direct impact on the productivity and competitiveness of singapore. If you flat costs only $100K, your mortgage is less than $500 a month, you can afford to take a lower paying job and still make ends meet.

I propose the following. People who own flats now should all be given their flats. ie they should be changed from tenant status to owners of freehold property. That way if the HDB sell flats at cost they can sell it with a 99 year lease. A freehold property is inherently more valuable than a leasehold, hence, it may make the inadvertent price increase more palatable.

 

[Goh Meng Seng]

Not everyone in the resale market could possibly buy direct form HDB. eg. Singles, upgraders who have bought twice, PRs etc. Those who are buying Condo and private properties may not be eligible to buy direct from HDB as well because they might have crossed the max household income of $8000. This is why I think it is a segmented market.

There will definitely be PAIN during the initial process, no doubt about, just like there will always a short spike in the number of people benefiting from the Asset Enhancement Scheme initially.

It has to start somewhere.

Goh Meng Seng

Goh, this is a major problem and it cannot be addressed by simply selling flats at cost. The PAP has screwed things so badly, even they don't know or can't sell cheap flats anymore.

Lets say that HDB really follows what u proposed and sells flat at costs, and lest say the cost is $100K. What will happen to those who just bought a similar flat 2 months ago for $350K? I would be hopping mad if I paid for a flat and all of a sudden HDB decided to to lower the price or give it at cost. Lets say the HDB gives every one a heads up and says starting june 1st, we will sell flats at cost. Guess what? The market for both resale and existing flats will fall down the toilet. The market will start applying for these cheap flats and will not go anywhere near the resale market. People who must sell will have to drop the prices they are askingfor their flats by $100,000s, and in the process loss all their equity or lose money.

The immediate effect of selling flats at costs will be to lower the value of all flats in s'pore, as well as ripple out and lower the value of private property. Banks will be left holding mortgages on flats that are worth less than the loan. People who pay $300K and more for their flats will be kicking themselves, and the bank will have to foreclose on their properties. Even if the offer was made to sell only to first time home buyers, the furore would be huge. Why them? Why not others? And the effect would be still the same. If the HDB offers this to all its flats, people would much rather prefer to buy a $160K exec condo than a $900K private condo, again, killing the market for private property.

I agree that this is necessary, but once the prices have increased to what they are, its very hard to lower them. Lower property prices has a direct impact on the productivity and competitiveness of singapore. If you flat costs only $100K, your mortgage is less than $500 a month, you can afford to take a lower paying job and still make ends meet.

I propose the following. People who own flats now should all be given their flats. ie they should be changed from tenant status to owners of freehold property. That way if the HDB sell flats at cost they can sell it with a 99 year lease. A freehold property is inherently more valuable than a leasehold, hence, it may make the inadvertent price increase more palatable.

 

[Chau Ve Nist]

It can't be done as it will trigger off a chain effect not unlike the last financial crisis which was caused by falling real estate prices in the US. It will trigger off bankruptcies and banks stand to loose billions and possibly going under from falling property prices.

If at all, Little Mah will have to used HDB prices to support property prices and ensure that HDB houses are priced such that it will not lead to a collapse of property prices in Singapore.

Only way out is to try to ensure that it does not rise any further than it currently has. That of course is impossible as Little Emperor and gang are using HDB flats to buy votes and to remain in power. Also, a materialistic society that is Singapore will have property price owners loving the idea that the "value" of their "assets" are constantly rising.

 

[pc2009]

Hi, have you considered whether more voters will buy this idea or against it as it affects their property value?

 

[Papsmearer]

Not everyone in the resale market could possibly buy direct form HDB. eg. Singles, upgraders who have bought twice, PRs etc. Those who are buying Condo and private properties may not be eligible to buy direct from HDB as well because they might have crossed the max household income of $8000. This is why I think it is a segmented market.

There will definitely be PAIN during the initial process, no doubt about, just like there will always a short spike in the number of people benefiting from the Asset Enhancement Scheme initially.

It has to start somewhere.

Goh Meng Seng

I think you are missing the point. If you sell cheap flats at cost to a certain group of buyers that qualify, u will have a negative ripple effect on the whole market, both resale and private. People will now try and buy flats under the names of whoever their relatives are in order to get the cheap flats. Many people will abandon the resale market to see if they can somehow by hook or by crook get one of these cheap flats. People who are selling resale flats will now find interest waning on their property as prospective buyers try and get a cheap flat. U are not thinking this thru. U have to look at examples in other countries to see how they do it.

 

[Papsmearer]

It can't be done as it will trigger off a chain effect not unlike the last financial crisis which was caused by falling real estate prices in the US. It will trigger off bankruptcies and banks stand to loose billions and possibly going under from falling property prices.

If at all, Little Mah will have to used HDB prices to support property prices and ensure that HDB houses are priced such that it will not lead to a collapse of property prices in Singapore.

Only way out is to try to ensure that it does not rise any further than it currently has. That of course is impossible as Little Emperor and gang are using HDB flats to buy votes and to remain in power. Also, a materialistic society that is Singapore will have property price owners loving the idea that the "value" of their "assets" are constantly rising.

Yes, I am trying to explain this to goh meng seng, but I don`t think he gets it. you are right, The Lees have a vested interest in seeing property prices go up. They and the Kwas and other PAP elites are some of the biggest landowners in singapore (collectively speaking). They invest primarily in private condos and terrace houses, etc. Its in their interest to keep property prices rising to enrich themselves.

 

[zuoom]

what would selling the flats at cost achieve?

 

[longbow]

Wah lau - simple facts

1) Property owners DO NOT want their asset price to come down!!! 90 percent of Singaporeans own their own property (ok you can talk about HDB not belong to you but you are a 99 year tenant and can resell for profit should you choose to do so). Repeat - property owners DO NOT want their asset price to come down. Bang head against wall to remember - property owners do not want their asset price to come down.

2) HDB prices form the foundation of Singapore property prices. The resale price of HDB flat is what is supporting the lower end condo. The lower end condos are what is supporting up market condo and so on.

3) The CPF of most Singaporeans are "invested" in their property. Should property market do a U turn, many would be left with insufficient $ for retirement.

4) Large portfolio of local banks are in housing loans. A severe downturn in prop prices will cripple the financial system. Pse see US banking system.

Solutions to high HDB prices for new buyers include - higher subsidy, cap on price increases to cost of living adjustments, special rental units that allow new buyers a place to stay while their BTOs are being built..

 

[Goh Meng Seng]

The market is segmented and such substitution effect is contained both by policy means. It could further be enhanced in the segmentation that only certain first time buyer below certain age (i.e. young couples) could enjoy this pricing. Upgraders and such will not enjoy such prices.

As I have said, Singapore's HDB flat system is unique whereby the government is the monopoly of supply for new flats in which it could set the rules on who it could sell to.

Any notable effect on resale or private market will be one time off. There will always be a demand on these markets. Besides, if this is really about HDB as a home for Singaporeans, not some speculative tool, it will be effective even if the resale market collapse. If the resale market collapse, speculators' effort to buy into HDB will be in vain.


Goh Meng Seng

I think you are missing the point. If you sell cheap flats at cost to a certain group of buyers that qualify, u will have a negative ripple effect on the whole market, both resale and private. People will now try and buy flats under the names of whoever their relatives are in order to get the cheap flats. Many people will abandon the resale market to see if they can somehow by hook or by crook get one of these cheap flats. People who are selling resale flats will now find interest waning on their property as prospective buyers try and get a cheap flat. U are not thinking this thru. U have to look at examples in other countries to see how they do it.

 

[Goh Meng Seng]

Private property markets have survived in the past with real subsidized HDB flats sold. They are segmented markets here in Singapore's context.

Most Singaporeans having HDB flats are for long term home, not investment. This is why resale market keeps going up because supply of HDB flats in resale market is limited due to this fact.

The impact on resale market is only one way, when there isn't enough supply of new flats or the price differential between resale markets and new flat markets are very thin. It means that those first time buyer who can buy new flats could buy into resale market but not vice verse. Thus no matter how attractive the new flats are priced, those who are limited to resale market could not possibly cross over.

This system serves to achieve two things. It serves to even out the cross generations wealth inequality. The problem with present system is that those first or even second generations might have enjoyed real asset enhancement but not the younger generations. Secondly, it curbs speculative attacks due to excess liquidity caused by foreign inflows.

While I know many Singaporeans like the false feeling of "high price" of their flats but the truth is, you could only possibly own one HDB flats and if you sell it, you will have no where to stay. You sell high, you buy high. It is totally a false sense of well being. Unless you are upgrading to Private property or cashing out for some reasons, majority of Singaporeans are not holding HDB flats just to see how much they could sell.


Goh Meng Seng

Yes, I am trying to explain this to goh meng seng, but I don`t think he gets it. you are right, The Lees have a vested interest in seeing property prices go up. They and the Kwas and other PAP elites are some of the biggest landowners in singapore (collectively speaking). They invest primarily in private condos and terrace houses, etc. Its in their interest to keep property prices rising to enrich themselves.