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

[3_M]

GMS, We have to be realistic here.

U are basically courting the votes of those who don't own any flats and snubbing those who already got it.

Any policies changes have to be gradual and progressive. Drastic policy U turn will make it difficult for public to digest and politically suicidal. The last thing we want is for you to provide your opponent MBT the free ammo to scare the voters into thinking that you are pursuing an asset depreciation policy which will bankrupt them.

U need to take stock. will this be a net gain or net loss of votes for opposition?

Lets face it, the asset inflation policy have stray to far off that going back to the basic is impossible. I would think that the government should substantially increase the housing grant from current 30k to 200k. In such a way, property value of home owner are safeguard and lighten the burden of new home seeker.

 

[Goh Meng Seng]

Most people have children and grandchildren.

It is a vote for their future generations vs their immediate interests.

According to the following link:

http://en.wikipedia.org/wiki/Build-To-Order_(HDB)

construction costs per 5-room, 4-room, 3-room & 2-room units are likely to be average about $160,000, $120,000, $80,000 & $40,000 (based on 2004 cost) respectively. This may also include the cost of sub-contractors and construction of multi-storey carpark, Lifts, Electrical Substation (ESS), hild-care center, Children Playground, Fitness Corner, Linkway Shelter & pen Space landscape etc.

Anyone has any idea how much is land cost per square meter?

Goh Meng Seng

GMS, We have to be realistic here.

U are basically courting the votes of those who don't own any flats and snubbing those who already got it.

Any policies changes have to be gradual and progressive. Drastic policy U turn will make it difficult for public to digest and politically suicidal. The last thing we want is for you to provide your opponent MBT the free ammo to scare the voters into thinking that you are pursuing an asset depreciation policy which will bankrupt them.

U need to take stock. will this be a net gain or net loss of votes for opposition?

Lets face it, the asset inflation policy have stray to far off that going back to the basic is impossible. I would think that the government should substantially increase the housing grant from current 30k to 200k. In such a way, property value of home owner are safeguard and lighten the burden of new home seeker.

 

[3_M]

Most people have children and grandchildren.

It is a vote for their future generations vs their immediate interests.

According to the following link:

http://en.wikipedia.org/wiki/Build-To-Order_(HDB)

construction costs per 5-room, 4-room, 3-room & 2-room units are likely to be average about $160,000, $120,000, $80,000 & $40,000 (based on 2004 cost) respectively. This may also include the cost of sub-contractors and construction of multi-storey carpark, Lifts, Electrical Substation (ESS), hild-care center, Children Playground, Fitness Corner, Linkway Shelter & pen Space landscape etc.

Anyone has any idea how much is land cost per square meter?

Goh Meng Seng

If people knows how to think long term, they wouldn't even fall for the gimmick of GCT Asset enhancement policy. Who would like the idea of having negative asset value even if it for the sake of future generations?

I very much agree that a home should fulfil it intended purpose of comfortable living than to see it a an investment for retirement. But this is a potential minefield. We have to be political correct not to give MBT the ammo to shoot back.

Hence I suggest that they increase housing grant instead of selling it at cost price to protect the existing home market. If cost of construction is $100k, and HDB sells it at 360K. Minus of the grant of 200k the buyer only need to top up 160k. Does this bankrupt the state coffer? No. In fact HDB still earns.

Majority of this grant would remain within the CPF system and it amount to nothing more than paper value and accounting transfer. How should a couple qualify? I further suggest using NS and ICT record as a criteria for qualification of the grant. Like that fair for citizens who served. New citizen who never serve will not qualify.

 

[longbow]

Wiki BTO costs are good starting points. Punggol Nautilus - Bidded price to build 519 units is $80.5M. This is how much HDB pays the contrator.

Now valid q - how much is the price of land.

About 6 years back, friend of mine rented about 30K sf of land in Tuas to store his surplus constrution equipment. he paid 50centspsf/month. Remember this is Tuas with no LRT 1 single bus service but must walk far far no food source.

Now just calculate using 75 cents psf/month, lease for 99 years, 3% int x number of sf. No idea how large that plot is but if you can research I am sure you can get the size of plot. With that you should be able to get price of land.

Actually use Punggol Nautilus because this is the latest BTO with an awarded contract.

I think the situation here is that salaries have not caught up with market.

Most people have children and grandchildren.

It is a vote for their future generations vs their immediate interests.

According to the following link:

http://en.wikipedia.org/wiki/Build-To-Order_(HDB)

construction costs per 5-room, 4-room, 3-room & 2-room units are likely to be average about $160,000, $120,000, $80,000 & $40,000 (based on 2004 cost) respectively. This may also include the cost of sub-contractors and construction of multi-storey carpark, Lifts, Electrical Substation (ESS), hild-care center, Children Playground, Fitness Corner, Linkway Shelter & pen Space landscape etc.

Anyone has any idea how much is land cost per square meter?

Goh Meng Seng

 

[Goh Meng Seng]

Found this in SLA website:

http://www.sla.gov.sg/htm/new/new2005/new0251.htm

This is the closest I could get, land cost for a condo project with plot ratio of 3.

Plot ratio is 3. Successful tender price is $2615. Divide this by 3, we get about $871.

It means that for a typical 4 room flat of 93sqm, the land cost should be $8100. Add up construction cost of $120000, it will be about $201K. Please bear in mind that this is in terms of commercial pricing of land. You be the judge of how much we should pay for the land.

In 1981, the assumed land cost for HDB was $15K, claiming a 50% discount from market price. (the size of a 4 room flat was bigger then) So if we apply the same logic, land cost for HDB should be about $40K, making total cost for a 4 room flat at $160K. Our young couples are paying $240K top $300K for it now...

Goh Meng Seng

Wiki BTO costs are good starting points. Punggol Nautilus - Bidded price to build 519 units is $80.5M. This is how much HDB pays the contrator.

Now valid q - how much is the price of land.

About 6 years back, friend of mine rented about 30K sf of land in Tuas to store his surplus constrution equipment. he paid 50centspsf/month. Remember this is Tuas with no LRT 1 single bus service but must walk far far no food source.

Now just calculate using 75 cents psf/month, lease for 99 years, 3% int x number of sf. No idea how large that plot is but if you can research I am sure you can get the size of plot. With that you should be able to get price of land.

Actually use Punggol Nautilus because this is the latest BTO with an awarded contract.

I think the situation here is that salaries have not caught up with market.

 

[longbow]

Use Punggol Nautilus -

413 units 4 rm at avg selling price $251K = $103M
106 units 5 rm at avg selling price $331K = $35M
Total $138M

Construction cost ($80.5M)

Profit before land/design and plannning $57.5

How much/ big is land ($57M)
Profit after land cost 0.5
Architect/engineering (1.5% of project) (1.3M)

Site prep/sewer/water/roads? ????????



http://www.hdb.gov.sg/fi10/fi10297p.nsf/ImageView/CORPORATE_PR_26032009_MAP_THE_NAUTILUS/$file/MAP+of+Nautilus.jpg

Ok here is map of Nautilus. Just by eyeballing it the site is about 200K sf. If you got compass and can actually get measurement down to a good degree of accuracy.

So 75 cents/psf/month x 99 years @ 3% int for 200K sf = $38M Present Value

Goh Meng Seng

I would like to suggest that before we take this big step, let us first gather more data. At this point in time, we still do not know the final cost of HDB flats. People have been doing estimates via awarded GeBiz tenders but the methodology by which the land cost component is calculated appears to be a mystery.

I would like to suggest perhaps as a first step, you should first campaign to get MBT to release the cost it takes to build HDB flats. This was done by Minister Teh in 1981 and there does not appear to be any national interest issues for why this information cannot be released into the public domain.

After we know the cost of building HDB flats, you can then go to phase 2 of your program which would be to come up with a better pricing mechanism for new HDB flats.

 

[longbow]

In situations where we cannot get actual mkt price use of PV of land rent for 99 years can be a good indicator. But of course the interest rate factor makes a huge difference - I am using 3% since HDB loan is 2.6%.

No doubt that HDB is buying land at market value.

And big question is whether the Gov should sell us land at discount or free? My point of view is that Gov should stop saying it is a subsidy but say it is selling at discount to market (not that they are losing money but that they are making less profit). I believe that land prices should be sold at small discount (20%) to market value.

as I had mentioned - no need for radical revamp - just peg all future price increases to rate of inflation or even workers salary and make effort to increase worker's productivity (no more import of FT to push GDP but increase GDP through productivity). If we can maintain a 3 to 5% wage growth on top of inflation and if HDB prices are pegged to inflation, affordabilty should not be an issue 5 to 10 years down the horizon.

 

[longbow]

That plot of land sold for $172M! It is about 220Ksf and 625 units were built.

Punggol Nautilius plot is about 180 to 200Ksf and they are building 519 units. I think the plot ratios of the land is somewhat similar.

If we take sale proceeds of $138M - awarded consrtuction costs $80M that gives is $58M profit before land cost, land improvements,and architect/engr fees ($3M?). So we are talking about $50 to 55M for that piece of land in Punggol in 2010

No doubt that Sengkang piece of land is a lot better - closer to MRT, more developed estate but the Gov got $172M for it in 2005! Nautilus land was sold in 2010 and it went for about $55M that is why MBT ( heart pain - $172M vs $55M) keeps telling us they are subsidizing us.


Remember that:

Even if HDB sold flat at building cost, it would run about $163K per unit. I think there should be some form of value attached to land. After all this is Singapore and land is a precious commodity.

The avg selling price of 4 rm Nautilus is about $251K. Minus $40K housing grant = $211K - $163 construction cost = $48K - share of land cost, etc.

I think that if Gov increases grant to 60K, HDB prices are quite fair.

Found this in SLA website:

http://www.sla.gov.sg/htm/new/new2005/new0251.htm

This is the closest I could get, land cost for a condo project with plot ratio of 3.

Plot ratio is 3. Successful tender price is $2615. Divide this by 3, we get about $871.

It means that for a typical 4 room flat of 93sqm, the land cost should be $8100. Add up construction cost of $120000, it will be about $201K. Please bear in mind that this is in terms of commercial pricing of land. You be the judge of how much we should pay for the land.

In 1981, the assumed land cost for HDB was $15K, claiming a 50% discount from market price. (the size of a 4 room flat was bigger then) So if we apply the same logic, land cost for HDB should be about $40K, making total cost for a 4 room flat at $160K. Our young couples are paying $240K top $300K for it now...

Goh Meng Seng

 

[Papsmearer]

Compare to the whole market, the new flat market is just a small portion, less than 1%. I do not think that it will have such impact.

Goh Meng Seng

The new flat market is not less than 1%. The fewest new flats build by the HDB was about 2700 in 2008. If that represents 1%, than u are saying 270,000 flats changed hands. That's 1 in 4. That is impossible. Now when the HDB wants to build up to 15,000 flats a year, your 1% would mean that 1.5 million flats changed hands in the market place. Not realistic, and not accurate.

 

[longbow]

Very easy to determine how many new flats built in the last 5 years. Go see wiki on BTO projects. Pretty all new HDBs are BTOs.

Maybe he was refering to new flats as percentage of old HDB flats. HDB is about to build 1 million flats - old flates kena demolished I think total flats is around 900K. Even if HDB were to ramp up to 15K new flats a year that forms only 1.6% of total HDB market. Then there are the provate condos and houses. New HDB as a % of total housing is insignificant. However new HDB prices set a benchmark for the whole property market.

The new flat market is not less than 1%. The fewest new flats build by the HDB was about 2700 in 2008. If that represents 1%, than u are saying 270,000 flats changed hands. That's 1 in 4. That is impossible. Now when the HDB wants to build up to 15,000 flats a year, your 1% would mean that 1.5 million flats changed hands in the market place. Not realistic, and not accurate.

 

[rodent2005]

By the way, the first hdb flat market is already segmented. Household income less than $8k, family unit, you can only get HDB loans two times... etc.

There is nothing new to this one.

Goh Meng Seng

Five room flats could be had for around $90,000 in the 1980s, so you are looking at estates around 30 years old for truly subsidized flats for those who bought directly from HDB then.

 

[theDoors]

Actually is 60 years mortgage payments. Dual income; now BOTH husband and wife work to pay off the 30 year mortgage.

Previously it was a single income paying off the 20 year mortgage.

Nett increase of 40 years of mortgage payments for the same flat.

 

[RK85]

I have read both sides of the arguments from GMS & the rest of the forumers on the price reductions of HDB flats.
Each have their own valid points for & against the policy; of course it needs some fine tuning here & there. Some suggestions here are worth considering.
I say let's give GMS a chance & support him on this campaign. Like many, I am sick of MBT's shit of " flats are very affordable, heavily subsidised, below international benchmark, etc".
I own a HDB flat bought yrs ago & I dun mind it's value drop to below what I paid for if our children can get flats at truly affordable prices. Majority bought their flats for residential purpose rather than for speculation, so price drop or no drop does not affect them.

 

[Goh Meng Seng]

The new flat market is not less than 1%. The fewest new flats build by the HDB was about 2700 in 2008. If that represents 1%, than u are saying 270,000 flats changed hands. That's 1 in 4. That is impossible. Now when the HDB wants to build up to 15,000 flats a year, your 1% would mean that 1.5 million flats changed hands in the market place. Not realistic, and not accurate.

I am talking about the norm of 12000 new flats each year. It represents about 1.3% of total HDB flats.

Goh Meng Seng

 

[ChaoPappyPoodle]

I have read both sides of the arguments from GMS & the rest of the forumers on the price reductions of HDB flats.
Each have their own valid points for & against the policy; of course it needs some fine tuning here & there. Some suggestions here are worth considering.
I say let's give GMS a chance & support him on this campaign. Like many, I am sick of MBT's shit of " flats are very affordable, heavily subsidised, below international benchmark, etc".
I own a HDB flat bought yrs ago & I dun mind it's value drop to below what I paid for if our children can get flats at truly affordable prices. Majority bought their flats for residential purpose rather than for speculation, so price drop or no drop does not affect them.

I agree that there are some good points in the posts and to support GMS in his endeavour. BUt I am hopeful that the following points are adhered to -
1) Not necessary to use actual figures if they can then be used against you. A strong laying out of te problems affecting current and future home owners is sufficient. Couple that with a strong desire to solve thees problems once voted into power may be a better alternative. But this has to be done together with a strong word against HDB and even SLA (not MBT - do not get personal with the attacks) for not disclosing the numbers required to perform a thorough study.

2) Endeavour to get all Alternative PArties to have solidarity in solving the dual problem of affordable housing and having sufficient funds for old age. The people need to know that there is a united front waiting and willing to help them. Without this solidarity, many voters, including myself will see any talk by a single party as being talk and that's all because an Alternative PArty, on their own will not have sufficient numbers in parliament to push through any promised changes. Any promise must be viable and seem real to voters.

3) Stay away from making personal attacks against MBT. It is easy but it can cost ALL the Alternative Parties dearly. There is sufficient ammunition against the PAPies by simply espousing on the problems today and in the future if the PAPies continue with their vision of affordable housing.

4) Any government that cannot provide affordable housing, decent jobs, affordable and efficient healthcare, care for the aged and workable and comfortable transportation should NOT be allowed to govern.

The PAP fails horribly on all these fronts and they seem to be pushing for more of the same in the years ahead.

My greatest wish is for all the Alternative Parties to consolidate into a single party for the next GE. That will make believers out of a large chunk of the voters. There is too much to lose if there is egotism and bickering when there is such imminent catastrophe.

Ideally, all the Alternative Parties should consolidate into a single party with the warring cry of Merdeka! Because this is what it has come to. In many ways, we are again, fighting for our independence. Independence from the PAP and the FTs that have inundated our homeland.

We want our country back. We want a government that works for the people and not the other way round.

MERDEKA!

 

[NoOnEsAwMe]

question:

what about those people who bought their hdb flat on bank loan?

if price of new hdb flats are lowered (whether gradually or otherwise),
won't the banks call in for loan top-ups?

sadly, i think the govt has created something that can only go up - and a bubble must certainly come in a matter of time.

 

[ChaoPappyPoodle]

question:

what about those people who bought their hdb flat on bank loan?

if price of new hdb flats are lowered (whether gradually or otherwise),
won't the banks call in for loan top-ups?

sadly, i think the govt has created something that can only go up - and a bubble must certainly come in a matter of time.

1) Use moral persuasion to 'force' banks not to ask for top ups.
2) Use reserves to repay those that have overpaid, over cost. Amounts can be paid to banks or individuals - need to work out the best way to do this.
3) There is always a solution to any problem. Brave decisions must be made. The good thing is that we have our reserves to help us out of the problem. And without the PAP in power, parliament can actually legislate laws that help the people.

 

[Goh Meng Seng]

question:

what about those people who bought their hdb flat on bank loan?

if price of new hdb flats are lowered (whether gradually or otherwise),
won't the banks call in for loan top-ups?

sadly, i think the govt has created something that can only go up - and a bubble must certainly come in a matter of time.

Most HDB flats are financed by HDB.

The valuation of old flats is based on resale market.

Yes, you are right. If we do not take steps to stop the runaway prices in the long run, if there is a major crash, many more people will be affected. It will take generations before we could clear up this mess created by PAP.

Goh Meng Seng

 

[Ramseth]

Yes, you are right. If we do not take steps to stop the runaway prices in the long run, if there is a major crash, many more people will be affected. It will take generations before we could clear up this mess created by PAP.

My area 30-year-old 3-room non-corner selling S$300k. Faint.

 

[aurvandil]

Use Punggol Nautilus -

413 units 4 rm at avg selling price $251K = $103M
106 units 5 rm at avg selling price $331K = $35M
Total $138M

Construction cost ($80.5M)

Profit before land/design and plannning $57.5

How much/ big is land ($57M)
Profit after land cost 0.5
Architect/engineering (1.5% of project) (1.3M)

Site prep/sewer/water/roads? ????????



http://www.hdb.gov.sg/fi10/fi10297p.nsf/ImageView/CORPORATE_PR_26032009_MAP_THE_NAUTILUS/$file/MAP+of+Nautilus.jpg

Ok here is map of Nautilus. Just by eyeballing it the site is about 200K sf. If you got compass and can actually get measurement down to a good degree of accuracy.

So 75 cents/psf/month x 99 years @ 3% int for 200K sf = $38M Present Value

I do not know if this calculation is correct. However if so much information is already availabe on the Internet, then why not openly release the methodology and data used to price the HDB flats? If there are national interests involved that do not allow this to be done, Mr Mah should clearly state what these are. I do not understand how and why the cost of building a flat in Singapore must be classified as a state secret.

The continued hiding of the cost of building HDB flats gives rise to speculation and all sorts of theories. This is worsened by the recent statistical releases which use unorthodox methodologies to give misleading conclusions.


If the polices are good and for the benefit of Singaporeans, then there is no need to hide. An open and transparent policy which can be audited and verified would in fact be a source of political strength as everyone would be able to see that the PAP is doing a good job. There is only a need to hide if the policies do not benefit of Singaporeans and the PAP has in fact been doing a poor job.