An analysis of prices of completed HDB flats

Georgetan884 SG

October 8, 2009 by admin01
Filed under Opinion

OPINION

National Development Minister Mah Bow Tan said last week that HDB will ramp up its supply of build-to-order (BTO) flats from 8,000 to 9,000 units this year, and will make available 2,132 flats which are completed or nearly completed across the island for sale with immediate effect. (read article here)

This means more than 7,000 flats will be on sale for the next three months.

The sale of completed flats, left from earlier BTO exercises, SERS and repurchased flats, will come under a new scheme called Sale of Balance Flats (SBF) which will now replace the existing balloting exercise, quarterly sales, and half-yearly sales exercises.

Are these completed flats easily affordable by Singaporeans? Let us study the prices provided by HDB in some estates:

District 3-room prices 4-room prices

Ang Mo Kio $244,000 – $262,000 $253,000 – $394,000

Bukit Merah $262,000 – $287,000 $388,000 – $488,000

Jurong East $141,000 – $217,000 $250,000 – $327,000

Kallang $257,000 – $282,000 $287,000 – $438,000

Queenstown $302,000 – $308,000 $298,000 – $498,000

[Source: HDB InfoWeb]

The prices of five room flats are not included as most of them cost more than $400,000 with some in prime districts like Toa Payoh and Bishan fetching as high as $600,000.

Are buyers paying for value at such exorbitant prices for leasehold public housing? For a couple of thousand dollars more, they can easily buy a condominium in the surburbs.

An undiscerning reader may mistake these figures as prices for resale flats had we not indicated earlier that these are completed (leftover) flats put on sale by HDB.

Yet, these are indeed the prices of resale flats in the same estates not too long ago. Remember, these are prices of new flats. The buyers are paying the stipulated amount to HDB directly.

For readers who are more than 40 years old, they can attest to the fact that a new 3-room HDB flat in Ang Mo Kio cost between $40,000 and $60,000 in the mid 1980s. The value has now quadrupled.

While young couples can easily afford a 3-room or 4-room HDB flat 20 years ago and finish repaying the housing loan in less than 20 years, they are unlikely to do so at today’s prices.

The median wages simply cannot keep pace with the rate at which the prices of public housing is growing which is exacerbated by the relentless influx of foreigners in recent years.

Not surprisingly, an ERA report revealed last week that 40 per cent of the buyers of HDB flats are PRs and 86 per cent of the flats are transacted with COVs.

Single Singaporeans are hardest hit as they are allowed to purchase a HDB flat after 35 years of age by the time the prices may have risen beyond their means.

Though they have fulfilled their National Service obligations, they do not enjoy any housing subsidies from the government and has to compete with PRs in the open market for housing.

Even if they are able to afford the flats, they will have to slog hard for their entire lives to repay the loan unless they are high earners in the first place.

Mr Mah has continued to reassure Singaporeans that the government is “monitoring” the situation and will ensure that homes are affordable. If this is indeed so, how can the prices of new HDB flats be allowed to shoot up to such ridiculously high levels?

Is this HDB’s definition of “affordability”? Ability to pay the downpayment of 10 per cent of the valuation plus any COVs should not be equated to ability to pay for the flat for the rest of one’s life.

With HDB setting such prices for new flats, it is little wonder that sellers are asking for astronomical prices for theirs.

The difference in prices between a central district like Queenstown and one in the suburbs like Choa Chu Kang can be as high as $100,000. What are the exact land and construction costs?

HDB should reveal the figures publicly to allow Singaporeans to judge for themselves if they should be paying for the new flats at such prices.

Related articles:

>> 12,700 applications for 2,132 HDB flats

>> Number of applicants exceed number of flats

>> HDB to increase supply of flats

>> Mah: don’t compare with prices in the past

>> ERA: 40 per cent of HDB flat buyers are PRs

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source: http://www.temasekreview.com/2009/10/08/an-analysis-of-prices-of-completed-hdb-flats/

Georgetan884 SG

October 8, 2009 by admin
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From our Correspondent

Beleaguered HDB, which has come under fire in recent weeks for poor planning leading to rapid inflation of HDB flat prices, has struck back at its critics through the state media.

In an article published on the Straits Times today, HDB seeks to debunk complaints from first-time home buyers that they could not get a flat despite repeated attempts. (read article here)

Using three case studies to support its case, HDB claimed that the buyers’ complaints do not quite match what was actually stated in their records.

The Sunday Times reported on Sept 20 that Mr Jayce Ng and Madam Jacelyn Yong had applied at least eight times, five for build-to-order (BTO) projects and half-yearly sales.

They claimed they were successful in only one application – for a five-room flat in Clementi two years ago and regretted not buying then.

According to HDB, the couple submitted 15 applications, out of which only four were for BTO projects, where couples have to wait typically three to four years.

Their other applications were for limited flats in mature estates. Records show they were offered a chance to select a flat seven times but did not do so.

Though there are some discrepancies in the accounts of the home buyers, it doesn’t hide the fact that the buyers did encounter genuine difficulties in getting a flat of their choice, whether it is 15 or 4 applications make little difference.

In an ideal situation, young Singapore couples should be able to get their desired flat after one or at most two applications.

Since a flat is a lifelong investment and they will be paying for the mortage loans for 20, 30 years or more, it is reasonable to expect them to be extremely cautious and selective of their units.

HDB should ensure there are sufficient flats available in mature estates at an easily affordable price to cater to the masses instead of blaming the buyers for being “unrealistic” and “picky”.

Being a government agency funded by taxpayers, it is natural that Singaporeans harbor a higher expectations for HDB, especially with its sterling performance and track record over the last few decades in providing affordable homes for Singaporeans.

In the past, young couples can get a flat of their choice easily at reasonably low prices. Many of them can afford to repay their mortage loans in less than 10 years.

It is inevitable that Singaporeans will compare the situation now with their parents and ask why they have to pay so much more for a flat which may not be located in the estate of their choice.

Though we cannot expect prices to remain the same as in the 1970s and 1980s, the rate of increase in prices should keep pace with the growth of the wages of ordinary Singaporeans.

If HDB finds that it can no longer meet the aspirations of Singaporeans, then perhaps it should relinquish its monopoly on public housing and allow boutique private developers to enter the market.

With a few competitors to choose from, prices will be fixed more or less at market rates and Singaporeans will have little to complain about.

HDB can never change public perception that HDB flats are supposed to be cheap and easily affordable.

It should do more to alleviate the concerns of Singaporeans either by increasing the supply of flats or making it more difficult for PRs to purchase resale flats to decrease the demand instead of quarreling with home buyers over such trivialities which will only make it appear unempathetic, petty and unreasonable.

Using a few cases will not alleviate public concerns that public housing is increasingly priced out of reach. What if the three cases are the exception rather than the norm?

HDB should come clean with the average number of attempts and the average waiting time needed by a first-time home buyer to get a flat of their choice time to give a more accurate and representive picture of the situation.

Related articles:

>> Mah Bow Tan dismissed complaints from home buyers as “ridiculous”

>> Number of applicants exceed number of flats

>> HDB to increase supply of flats

>> Mah: don’t compare with prices in the past

>> ERA: 40 per cent of HDB flat buyers are PRs

source: http://www.temasekreview.com/2009/10/08/hdb-debunks-complaints-from-home-buyers-of-not-getting-a-flat-despite-repeated-attempts/

Georgetan884 SG

October 8, 2009 by admin01
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From our Correspondent

National Development Minister Mah Bow Tan has lashed out at the rising number of complaints from Singaporeans, especially first-time home buyers that they are unable to get a flat after several attempts.

“Every time we get such emails we check – is it true? Why is it that after 12 times he still didn’t get a flat. It is ridiculous, surely something is wrong with the system,” said Mr Mah.

“So I have asked HDB to check and the sad part of it is – a lot of the times this is not entirely truthful. It’s not a matter of them not getting the flat, it’s a matter of getting it and not selecting it for one reason or the other.

“I would go further to say that if you (are) genuinely in (need of a flat) and you have not been able to succeed after three or four times, I’m prepared to look at it and find out what is going on.”

Mr Mah went on to assure Singaporeans that the supply of new flats under the BTO programme is more than adequate to meet the needs of younger couples.

However Mr Mah did not comment on the fact that in less than a week since the Sale of Balanced Flats is launched by HDB, 12,700 applications have been filed for only 2,132 available flats – about six times oversubscribed.

Neither did Mr Mah reply to the ERA report circulating around in cyberspace that 40 per cent of the buyers of resale flats are PRs.

Mr Mah also pin the blame on some applicants who did not book their flags:

“(There are) those who have a less urgent need or actually have a place to stay but are just trying their luck and are hoping that they get a good balloting number and a flat of their choice. In fact, many of those who reject say their preferred flat has been taken up. In such cases, we cannot cater for them.”

HDB’s advice to flat buyers is: plan ahead for the purchase and also know the trade-offs between wanting a flat in a mature or non-mature estate.

Despite record high prices for both new and resale flats, HDB has continued to insist that they are “affordable”. It now urges buyers to be “realistic” and exercise prudence, and buy a flat they can afford.

Perhaps HDB should first explain it has not increased the supply of flats in the face of an increasing population due to the relentless influx of foreigners over the last few years.

Is it realistic to expect home buyers to predict that the prices will shoot up so quickly in such a short span of time and “plan ahead” for their purchase?

Source: http://www.temasekreview.com/2009/10/08/mah-bow-tan-on-complaints-from-buyers-they-cannot-get-a-flat-it-is-ridiculous/

Georgetan884 SG

October 9, 2009 by admin
Filed under Forum, Opinion

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A Forum letter from Mr Ng Kok Lim

I refer to the report “Mah: Make meaningful comparisons” dated 2 Oct 2009. (read article here)

Mr Mah reportedly said that it is “not meaningful” to compare prices of flats today with those 20 years ago because that would mean going back 20 years.

But MM Lee said in a speech on 12 Sept 1965: “Over 100 years ago, this was a mud flat, swamp. Today, this is a modern city”. Is Mr Mah going to tell MM Lee that his comparison is “not meaningful” and that he is trying to bring Singapore back 100 years?

In his 2006 National Day message, PM Lee said that “many years ago, Singapore was just a fishing village …” Is Mr Mah going to tell PM Lee that his comparison is “not meaningful” and that he is trying to bring Singapore back to a fishing village?

In the Straits Times report “How much is a burger worth” dated 26 Sept 2009, MP Seah Kian Peng was reported to have said that the key consideration in deciding how affordable or less affordable goods have become in Singapore is to see if life is better now compared to that in the past. Is Mr Mah going to tell MP Seah that his comparison is “not meaningful” and that he is trying to bring Singapore back to life in the past?

So Mr Mah is not being very meaningful when he says that it is “not meaningful” to compare with the past. Because everyone compares with the past, even our leaders do so. While our leaders readily compare with the past to show progress and achievement, comparisons that show price increases or deteriorating levels of affordability is deemed “not meaningful”.

Mr Mah brushes off “all sorts of arguments” about prices being too high today, not with sound counter arguments, but by simply saying that this is part and parcel of our system. In that case, he and the HDB might as well not give any explanations to the public. They can just answer any query from citizens with the phrase “this is part of our system”. No further explanations needed. Wouldn’t that be eaiser?

Mr Mah says that our HDB can be monetised by selling it or leasing it back to the HDB for retirement funds. But what is the point of paying for an HDB all our lives only to give it up at the end of the day?

Mr Mah says that our HDB remains affordable because it does not exceed the 30% international benchmark. But he and the HDB always insist on saying that our HDB is heavily subsidised. How can the HDB flat be simultaneously heavily subsidised and priced according to the international benchmark? That would mean that everywhere in the world that adopts the international benchmark enjoys heavily subsidised housing.

Thank you

Ng Kok Lim

Source: http://www.temasekreview.com/2009/10/09/mah-bow-tan-make-meaningful-comparisons/

Georgetan884 SG

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October 2, 2009 by admin01
Filed under Forum, Opinion

30 Comments

By David See Leong Kit

HDB’s response “Why we peg to market rates: HDB” ( TODAY Sept 25) to my earlier letter has necessitated my right of reply. (read letter here)

Instead of merely accusing me of being “misleading and illogical”, HDB is expected to be transparent in disclosing fully the actual breakeven cost of new flats in all its projects. After all, these are public housing developed with public funds.

These exasperasting remarks of a couple wanting to start a family sums up the genuine frustrations of young Singaporeans at the sky-high prices of public housing: “How to live in cheaper Woodlands when work is in Shenton Way and parents are in Tanah Merah? The Government must come up with more practical solutions !”

Let me now summarise these two main issues:

(1) Root cause behind high prices of new and resale flats.

In the 1970s, at HDB Marine Parade Estate, prices of 3-room, 4-room and 5-room new flats were $17,000, $20,000 and $35,000 respectively.

In 1990, 5-room new flats cost around $70,000. Such prices then reflected a “cost-based” pricing approach.

But, following the 1994 property bull run, HDB switched to a “market-based” pricing approach. It confirmed that “the prices of new HDB flats are based on the market prices of resale HDB flats, and not their costs of construction”.

In 2000, the total breakeven cost (comprising construction cost, land cost and other related costs) of a 5-room new flat was an estimated $120,000.

However, under the market-based pricing approach, HDB will first look at the prevailing market price of, say $260,000 of a 5-room resale flat. It will then pick a slightly lower figure of, say $200,000 as the selling price of the new flat — regardless of its actual breakeven cost of $120,000.

HDB will then proclaim the new flat buyer is getting a so-called “market subsidy” of $60,000, the difference between resale flat market price and new flat selling price. There is really no “cash subsidy” given to the buyer, and HDB is actually making a profit of $80,000 for each flat sold.

The losses reported in HDB financial statements could well come from “transfer pricing” accounting between HDB, Singapore Land Authority and Ministry of Finance.

HDB’s “market-based” pricing approach is the root cause of prices of new flats and resale flats chasing each other in a never-ending upward trend.

A plate of chicken rice cost $3 in HDB coffeshops and $20 at hotel coffeehouses. It is both illogical and ridulous for HDB to proclaim that every person eating chicken rice in HDB coffeeshops is getting a “market subsidy” of $17 per plate!

(2) Are HDB new and resale flats really affordable?

It is misleading for HDB to merely state “first-time flat buyers use 17 to 29 per cent of household income for their loans, below the international benchmark of 30 per cent” without disclosing the assumptions used.

HDB has since confirmed to me that a 30-year loan period was assumed.

Of course, if you stretch a home loan to as long as 30 years, even private property will become “instantly affordable”.

For a couple with combined $8,000 monthly income, a HDB loan of $500,000 at 2.6 per cent interest and monthly loan instalment of $2,000 may appear affordable. But at the end of the 30 year loan period, they would have coughed up some $800,000 in total capital and interest repayments.

A sensible home loan period would be around 15 to 20 years.

EDITORS’ NOTE: Mr See’s follow-up reply was not published by the mainstream media.

Georgetan884 SG

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September 30, 2009 by admin01
Filed under Forum, Opinion

26 Comments

By Ng Kok Lim

I refer to your letter “Why we peg to market rates” to Today dated 25 Sept 2009. (read letter here)

You wrote that the HDB incurred an average deficit of $1,045 million a year on home ownership programmes. However, if we refer to Page120 of HDB’s 2008 annual report, $625,102 was spent on “upgrading, improvements and demolition”.

Surely upgrading doesn’t count as home ownership but perhaps home improvement instead? It gives the false impression that the HDB is subsidising new homes at a cost of $1,045 million when in actual fact the amount is much less.

On the same page is another $783,757 item called “provision for loss for properties under development / for sale”.

Presumably, HDB foresees the price of unsold HDB flats to fall short of construction costs by $783,757. But by claiming to price HDB flats at market levels, its hard to imagine how HDB can foresee prices of unsold HDB flats to dip below costs by so much.

If we put these two items aside, HDB actually made a profit of $363,859 instead.

Instead of repeating its market pricing rationale yet again, it would be more helpful if HDB can address the issue of positive feedback between resale flat price and new flat price.

As market price of resale flats soar, so too does the price of new HDB flats since the latter are pegged to market prices. But the increasing price of new flats makes them less attractive to buyers and does nothing to abate the demand for resale flats and so demand for resale flats continues and the whole cycle repeats itself.

The price of many resale flats have jumped by $100,000 in a matter of one, two years.

Can HDB explain why the $30,000 government subsidy is considered ’significant’ compared to a typical $100,000 rise in flat prices? HDB claims that market pricing allows all to receive similar subsidies regardless of market movements. But the $30,000 subsidy is not even enough to make up for the loss incurred by a would be buyer when the market goes up by $100,000.

HDB claims it is illogical for Mr See to attribute property price increases to the HDB because the recent asset appreciation is not unique to Singapore.

This is like saying that the banks in Singapore are not responsible for losses arising out of the recent Lehmann Brothers collapse since similar losses have occurred elsewhere too. But banks here are being ordered to put their houses in order. Surely there is something that the HDB can do as well?

HDB should explain what being below the international benchmark of 30% means in terms of how much one gets to keep in one’s pockets. For example, HDB has demonstrated that a 3-room flat costing $150,000 and sold to a household with income of $2,000 only requires a monthly instalment of $460 and a resulting ratio of 23%.

But for a typical family of four with a monthly sustenance need of $500 each perhaps, the total cash required is already $2,000. Where is the family going to find money for the $460 monthly instalment? So the 23% ratio is meaningless as far as one’s own pockets is concerned.

Georgetan884 SG

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September 29, 2009 by admin
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23 Comments

I refer to the letter “How family’s fortunes have grown over the years” by Ms Mabel Tan dated 26 Sept 2009. (read letter here)

Ms Tan’s bemusement is understandable. She is bemused because she and her family are totally unencumbered by the recent sharp increases in property prices. Like the person watching a fire from the safety of the opposite bank of a river, she feels neither anxiety nor pain.

She shares with us her good example of being able to stay with her in-laws for 8 years and so she expects everyone else to be able to do so. But I know of a colleague whose husband slept in the living room of his parents’ flat before their marriage because his family was too big.

Does Ms Tan expect my colleague to sleep in the living room of her parents-in-laws’ flat? Ms Tan shouldn’t have moved out after 8 years but should have continued to stay with her in-laws to uphold the example she had been setting.

Ms Tan claims that her family’s fortunes have ‘grown’ over the years, but she provides no details as to how it has actually grown. Let’s see, there is no doubt that from a one-room flat to a four-room flat, Ms Tan’s parents have benefitted from asset inflation. But has Ms Tan’s extended family benefitted as a whole?

Let’s say for simplicity’s sake, Ms Tan’s parents’ flat appreciated from $30,000 to $300,000, that’s a cool $270,000 that Ms Tan’s parents pocketed over the years without doing anything. But what about Ms Tan and her siblings?

If the price had stayed at $30,000, Ms Tan and her siblings would have been able to snap up units at $30,000 each only. But because of asset inflation, Ms Tan and her siblings now have to fork out $300,000 each.

In fact, Ms Tan and her two siblings would have to fork out a total of $900,000 instead of $90,000. Collectively, they would have paid $810,000 more. The extra burden of $810,000 that Ms Tan’s generation has to bear far outweighs the gain of $270,000 that her parents pocketed.

So that is the truth behind the fallacy of asset appreciation. We can of course adjust all prices for inflation but what this simple example illustrates is this: the so-called gain from asset appreciation of one generation will be borne by the future generation. It becomes a debt for the future generation to bear. Unless salaries can keep up, that debt will keep increasing and increasing until it becomes totally unbearable.

Thank you

Ng Kok Lim

Georgetan884 SG

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September 22, 2009 by admin
Filed under Forum, Snippets

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[EDITORS' NOTE: This letter was submitted to us by Mr Ng Kok Lim who had two letters published earlier by the Straits Times Forum on rising prices of HDB flats. Please feel free to send us your letters at [email protected]]

I refer to the HDB’s letter “Within a family’s reach” to the Straits Times dated 12 Sept 2009. (read letter here)

The HDB claims that one of its key responsibilities is to sustain flat values over the long term. The first of HDB’s four mission statements is to “provide affordable homes of quality and value”.

There is nothing in that statement that says that it is HDB’s responsibilty to sustain flat values over the long term. In fact, none of the four mission statements or even the vision statement remotely suggests that it is the HDB’s duty to sustain flat prices over the long term. So where did HDB get its mission of sustaining flat prices over the long term?

Next, sustaining flat prices over the long term is different from letting it rise faster than salary increases because clearly, salary increases hasn’t been keeping up with increases in flat prices.

The notion of generous housing subsidies is unconvincing. In the span of months, HDB prices shot up by $100,000 easily across the island. Can the $30,000 HDB subsidy make up for $100,000 increase in flat prices?

Affordability

The HDB claims that it is reasonable for a couple earning $4,000 to pay for a flat costing $300,000 with a monthly instalment of $920 + $81 = $1,001. Let’s see if this sum is truly reasonable by taking into consideration the daily as well as retirement needs of a family of four.

Suppose each member in a family of four requires $500 for basic sustenance. That will take $2,000 away from the monthly income. Take $1,001 HDB housing loan away from the remaining sum of $2,000 and we are left with $999. If both husband and wife were to set aside $500 each for retirement purposes, they would have perpetually nothing left for utilities, education and all other purposes.

Is this HDB’s so called “affordable”? Seems like HDB’s so called “below the international benchmark of 30%” means having absolutely nothing left over for spending. No wonder Singaporeans have little to spend or if they spend, have insufficient funds for retirement.

Only new flats count

HDB says that the figures quoted by me is not reflective of Singapore’s situation. According to the HDB, the true figure should only be based on the price of new HDB flats.

In other words, HDB is saying is that housing affordability in Singapore should solely be judged by the price of new HDB flats only, the prices of resale flats and condominiums don’t count. Is this a reasonable assumption?

According to the HDB website, there were 16,630 resale flat transactions in the first half of the year. Assuming the same number will be transacted in the later half of the year, the total number of resale flats to be bought this year would amount to 33,260 units.

This is more than four times the number of new flats that will be built this year. In other words, HDB’s definition is only confined to less than 20% of Singaporeans’ needs for HDB flats. Yet HDB is claiming that that this 20% reflects the true housing affordability in Singapore. This is akin to picking out the poorest 20% of Singaporeans and saying that that they represent the general income situation in Singapore.

While no one is disputing that DSR is simple, no one can appreciate where Singapore stands unless Singapore is ranked against other developed countries using the DSR. Also, HDB shouldn’t only compare the DSR of the cheapest 20% of Singapore’s houses against the DSR of all houses in other countries.. That simply wouldn’t be comparing apple to apple. If HDB is bent on comparing so-called new HDB flats only, then comparison should be made against similarly “subsidised” housing in other countries.

Flat supply

HDB claims that it is responsive to rising demand due to immigration and new marriages. But it still hasn’t shown us how the 8,000 new flats to be built this year is sufficient for Singaporeans when the number of resale flats bought in the first half of this year is already 16,630.

Having admitted that the HDB cannot build sufficient flats where and when citizens want them, the HDB should then refrain from always saying that resale flat prices are determined by “willing buyer, willing seller” since the willingness of buyers will always be constrained by the inability of the HDB to build new flats where and when citizens want them.

The HDB says there are plenty of resale flats available in mature estates which are affordable. This is again another myth. Are there hundreds of thousands of empty resale flats waiting for people to buy and occupy? Obviously not.

For every resale flat that is sold, another house has to be provided for unless the occupant is emigrating from Singapore. So the fact that there are hundreds of thousands of HDB flats in Singapore doesn’t mean that there are hundreds of thousands of HDB flats available for people’s choosing. Just like there are 400,000 cars in Singapore doesn’t mean that there are 400,000 second hand cars available for people to choose and buy from.

Ng Kok Lim

Georgetan884 SG

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September 22, 2009 by admin
Filed under Forum, Top News

13 Comments

I refer to the letter “People should be free to decide what a flat is worth: HDB” to the Straits Times dated 14th Sept 2009. (read letter http://singaporeenquirer.sg/?p=4619)

HDB claims to be responsible for sustaining flat prices over the long term. Looking at resale flat prices from 1990 to the present, sustenance of flat prices hardly needs worrying about as increases in flat prices have far outstripped increases in peoples’ incomes. Conversely, shouldn’t it be HDB’s responsibility instead to ensure that increases in flat prices do not outstrip the people’s capactity to pay for them?

The title of the letter itself suggests a misconception surrounding the myth of “willing buyer, willing seller” so often perpetuated by the HDB.

The fact that HDB is claiming to be responsible for sustaining flat prices means that it has the means to influence the overall price level of HDB flats. That is the crux of the issue.

While people are free to decide how much to price their flats, their decision cannot deviate significantly from market conditions that are largely controlled by the HDB itself, through such mechanisms as controlling the amount of land that it releases to the public and the number of new flats that it builds.

Ask ourselves, how can we sell our flats at a premium when the govt is building one exactly the same right next door to be sold at cost? It is because the govt isn’t building them or isn’t pricing them at cost or is choosing to release the land for private condominimums for example that resellers are able to command the premium that they are getting.

The situation is not unlike the case of a sole importer monopolising the rice trade. If he opens up all his warehouses and distributes the rice to all the shop keepers, there will be plenty of rice for everyone and no one will have to pay a premium for rice. But the moment the importer restricts his supply of rice such that supply barely meets demand, people will start to fight over rice and the shop keepers will now be able to command a high price for rice.

That is exactly what is happening to our HDB resale market. By not supplying enough new flats, the HDB creates the conditions for the resale market to heat up.

The HDB claims that the total number of bookings for HDB flats with grants amounts to 13,000 to 15,000 units each year, which far exceeds the 8,000 new flats HDB is building this year. So isn’t this clear evidence that the HDB is not building enough new flats to satisfy demand?

The HDB claims to have enabled 80% of the population to own their own homes. But going by the exhorbitant price people have to pay for house ownership, house ownership becomes a terrible liability rather than a proud asset that the people can be proud of.

Ng Kok Lim

Georgetan884 SG

October 8, 2009 by admin
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THE HDB has addressed some recent media reports and readers’ letters concerning first-time home buyers complaining that they could not get a flat despite repeated attempts.

CASE 1

The Sunday Times reported on Sept 20 that Mr Jayce Ng and Madam Jacelyn Yong had applied at least eight times, five for build-to-order (BTO) projects and half-yearly sales.

They claimed they were successful in only one application – for a five-room flat in Clementi two years ago and regretted not buying then.

HDB’s response:

The couple submitted 15 applications, out of which only four were for BTO projects, where couples have to wait typically three to four years.

Their other applications were for limited flats in mature estates. Records show they were offered a chance to select a flat seven times but did not do so.

The couple’s response:

Mr Ng said he does not remember being offered as many as seven times.

In some cases, he said he chose not to select a flat because the ones left over were on the second floor.

CASE 2

Home buyer Soh Say Kiat wrote to The Sunday Times Forum Page on Sept27 saying that he and his wife married in 2001, but had yet to hold their customary wedding.

They said ‘we have been unsuccessful in our numerous attempts – around 18 times since 2001 – to get an HDB flat’ which they put down to ‘rotten luck’.

HDB’s response:

Records from 2002 showed the couple made 12 applications.

Out of these, only two were for BTO projects, the rest were for popular flats in mature estates.

The HDB says the couple was offered a chance to select flats three times but they did not take it up.

It pointed out that Mr Soh was offered a BTO flat in Sengkang in 2003. If he had accepted, he would have got his flat in 2006.

The couple’s response:

Mr Soh said he could not remember all three offers, but recalled that he gave up one offer because the flats were on the second floor.

He admitted they were picky about location when they started applying for homes, but say they will try for BTO flats on offer now.

CASE 3

A home buyer sent an e-mail to the Prime Minister’s Office on Sept 21 saying: ‘I have been married since 2007, and to date, unable to secure a HDB flat after numerous balloting exercise at least 10 times over the years.

‘This has greatly affected first-timer applicants especially like myself where I could not live a normal life.’

HDB’s response:

The couple applied eight times, not 10, and only one application was for a BTO flat, where there is a much higher chance of success.

They had four chances to select a flat but did not do so, including an option to take up a BTO flat in 2005, which would have been completed last year.

Source: http://singaporeenquirer.sg/?p=4747

Georgetan884 SG

October 5, 2009 by admin
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By Fiona Chan from Straits Times

Prices of resale HDB flats hit another all-time high in the third quarter, amid a growing chorus of unhappy buyers complaining that home values are rising out of their reach.

Despite the rising prices and disgruntled home-seekers, pundits say there are still affordable homes to be had – if only buyers are less choosy and look a bit harder.

Where, then, are these cheap flats to be found?

The Sunday Times went in search of resale flats that were recently sold for up to $200,000 – which can comfortably buy a built-to-order three-room flat in new towns such as Punggol.

The good news is that resale flats for below $200,000 definitely exist.

The bad news: Almost all of them are three-room flats or smaller, at least 20 years old and often more than 30, and largely tucked away in the corners of the island such as Woodlands and Jurong West.

Even then, the number of flats that can be had for a budget of $200,000 appears to be shrinking.

In the third quarter of this year, between July and last month, fewer than 140 three-room flats were sold for $200,000 or lower, compared to more than 220 in the second quarter and more than 280 in the first quarter of this year, according to data from the HDB website.

Four-room flats below $200,000 are virtually impossible to find. Even when you up the budget to $300,000, it is slim pickings.

‘In the past, you could easily get some of the four-room flats for below $250,000, whereas now, most are above $300,000,’ said Mr Mohamed Ismail, chief executive of real estate agency PropNex.

ERA Asia-Pacific’s associate director Eugene Lim illustrated it more starkly: In 2003, $200,000 could have bought a four-room flat in almost any area, including popular towns like Ang Mo Kio, Bedok, Serangoon or Toa Payoh, he said.

This year, $200,000 will get you only a three-room flat in Geylang, Hougang, Jurong West, Kallang, Woodlands or Yishun.

Similarly, a budget of $300,000 would have been sufficient to bag a five-room flat in most towns in 2003, said Mr Lim.

Now, the only five-room flats you can get for that amount are in Jurong West and Woodlands, he said. In mature estates such as Toa Payoh, Marine Parade, Queenstown and Clementi, $300,000 will buy only a three-room flat.

Part of the reason for this is the rising cash-over-valuation (COV) portion, which sellers of in-demand flats can ask for in cash above the property’s valuation. For three-room flats in popular areas, this can go up to $50,000, while owners of flats in the outlying areas still ask for at least $10,000 in COV, said Mr Aaron Hong, a senior division director at Dennis Wee Realty.

But even excluding this, the valuations of HDB flats alone have skyrocketed in recent months.

In Tampines, the lowest valuation for a three-room flat is about $210,000 to $220,000, whereas the highest can go up to $290,000, Mr Hong said.

When you throw in the COV amount, which is a must-have in these property boom days, it is easy to see how a three-room resale flat can cross the $300,000 mark.

For the despairing, Mr Ismail has some advice: If your budget is low and you cannot afford to pay high COVs, forget resale and go for build-to-order flats, even if it means waiting a few years.

‘The key is to enter the property market first, in whatever way you can,’ he said. ‘By getting one foot in the door, you can build a foundation and then work towards the home you really want.’ – ST

Source: http://singaporeenquirer.sg/?p=4731

Georgetan884 SG

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September 16, 2009 by admin
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9月11日，2009年由admin 提意见 由尤金杨和杰里米koh 发表评论 Translated by Robin Chen

除了政治上的考虑外，政府也是出于经济利益使建屋局 (HDB) 价格持续走高。否则，谁又将如此愚蠢的杀鹅取金蛋呢？

出售新组屋增加利润

由于新政府组屋价格与邻近重售单位挂钩，重售单位上涨当然得出是促使新单位组屋售价走高的结论，因此更多盈利来自组屋出售。

据最近公布讯息，BBR控股公司已经从建屋发展局（HDB）获得一个104.2百万新元的合同，在义顺4邻里建造7座单位组屋。这项工程包括864住户，幼儿中心，屋顶花园，公用设施和地面工程，以及一些应急工程。（亚洲新闻道，2009年8月17日）

财务顾问梁先生（Mr. Leong Sze Hian ）计算，建屋发展局每售出一已完成的单位便可获超过$170,000的利润：

“由于那里将有864组屋单位，每个单位平均成本，包括社区设施，现场工程和应急工程在内，平均成本约为$120602(104.2百万除于864个单位）。

随着榜鹅最新的建屋局新4房式（榜鹅公寓BTO）单位的平均售价$293 000（$264 000-$322,000价格），这是否意味着建屋局每单位可以赚取约$172,398利润，或约143%的盈利？“ [源代码：Hardwarezone]

建设组屋单位的成本仍然是政府唯一知道的一个谜。不幸的是，建屋发展局只说组屋单位属于补贴性质，但它从来没有说清楚出售给新加坡人的成本价格。
不管成本实际数目如何，从今年所制定新组屋和重售单位的售价来看，建屋发展局盈利可能增加。

财产税和转售收费

这些都是政府间接自组屋价格上涨获得的额外税收。新加坡各种类型的产业，包括组屋，工厂及办公室都得缴税。

每一年所需要缴交的产业税是根据资产年估值或每年物业租金的4％来估算。

如果卖方出售的是第一次获得辅助津贴或根据公积金购房津贴计划购得的单位，他出售组屋单位给买家的决定必须获得建屋局批准。

如果他购买另一资助单位或接管开发商出售的行政公寓，或使用权未满5年的行政公寓，他必须付转售征收税。只有2007年11月20日后落成的行政公寓项目，他才免交转售征收税。

这转售征收税的缴付是根据建屋局不时变更的条规，政策和程序来决定。

凡建屋发展局任命的售方和/或买方处理重售组屋，有关建屋局的物业转让交易费用得按照房屋及发展（物业转售交易费用）条规计算。

不用说，在楼市处于交易蓬勃的高峰期，建屋局将看到更多 “业务”商机，因而从转售征收税及转让交易费赚取更多盈利。

吸引外国投资者

政府组屋的价格成为提供了支持私人产业领域的基础。

新组屋楼房的价格与重售单位衔接挂钩时，这将影响大众市场住房的价格。
组屋提高售价将让开发商寻到需求上涨压力作借口，推高郊区公寓的售价，因为公共组屋价格低于私人项目的房屋是不可思议的。

这无异弹高了新加坡中央和主要市区的小型产业的价格，为建立一个蓬勃的发产业市场，吸引有钱外国人投资购买新加坡的房产。

一个充满活力和活跃的房产市场，将使政府通过提高印花税增加收入，每个产业都得征收的消费税。

结论

建屋局组屋是政府在新加坡公共房屋垄断市场上独享的摇钱树。在没有任何竞争对手的情况下，它可以随心所愿，自由制定和操纵价格。

虽然政府可以也很容易地降低政府组屋的售价，但它出于自己的经济和政治利益需要，价格继续任由市场力量去决定。

不像1996年，房地产市场在毫无预警下突然崩溃，政府此刻将先发制人更加精准的控制价格免收不规则的波动影响。

据英国皇家特许测量师学会（英国皇家特许）伦敦总部代表和规范房地产专业人士以及测量师预测，由于经济的不稳定和高失业阴影的笼罩，新加坡的住宅市场了2010年出现反弹可能归于失败。（阅读文http://temasekreview.com/?p=12848）

如果这种情况发生时，政府组屋的价格可能会停滞和稍微下降，但仍然高于2007年的水平，期待价格下降或崩溃的置业者会感到失望。

鉴于建屋局转售单位和大众市场共管公寓价格之间的差距日渐缩小，对那些有能力额外多拨出10万左右款项或购置私人产业的买家，届时可能需要更加小心谨慎。

Georgetan884 SG

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September 12, 2009 by admin
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Translated by Robin Chen

由尤金杨和杰里米Koh

国家发展部长马宝山最近证实了许多新加坡人严重的恐惧-尽管未来经济前景依旧不明朗，转售组屋 (resale flats) 的价格不但创下了新高，并将持续扶摇直上。

马宝山没有透露任何有关政府冷却楼市和降温的举措，令人信服的掀开保证组屋处于人人“买得起”价位的毯底秘密。

其实政府很容易大幅度降低售价。单靠一年内建造更多的新单位，取消现金超购估值（COVs）的天文数字，并限量永久居民一年内购买组屋单位，政府组屋的价格将立即下降到人人负担得起和稳定的水平。

虽然租屋价格的下降将使许多新加坡人受益.但他们不愿意采取适当措施迅速先发制人阻止房地产泡沫的形成,因为这不符合政府在政治和经济上的利益。

油价崩溃,导致不稳定的政治产生危机

在7月间召开的国会,回答议员有关建屋局应采取实施限制转售价格上升上限的提问时,国家发展部高级政务符部长指出，组屋仍然维持在新加坡人负担得起的价位。

她说： “’组屋价应体现新加坡人的财富，尤其是那些上世纪90年代中期在市场处高峰阶段买了负资产的人，物价稳步增长就“不是一个坏主意””。在过去10年吴作栋时代，认为组屋价格上升将为新加坡人创造财富的错误观念一直延续至今。

人民行动党从来不提醒新加坡人，却巧妙地利用有争议的办公室“纪录”，掩盖资产价格飘升下人民生活在高价自置居所的的统治。

1995年任总理的吴作栋在接见金吉居民时说道：

“我们为你的资产增值了多少？在租屋提升初期，公开市场上低于$ 80,000的三房式单位，今天我被告知，房屋代理人可出价160 000元以上，你的资产在3年内已翻了一倍。你们大家做出了正确的选择，强烈支持组屋翻新提升计划并参加了表决。“

[源代码：http://stars.nhb.gov.sg/stars/tmp/gct19950115.pdf]

许多新加坡人信任政府和接受了组屋价格无情的上升，但没有意识到除非他们移居或降级住进小单位。他们也从未理解通货膨胀市场和利用租屋单位的价值。
如果政府允许组屋的价格下跌，甚至只要略低百分之5，任何在过去2年以高价买了单位的新加坡人将背上负资产的包袱。

本质上属于功利主义的社会，新加坡人必将对价格的下降导致他们损失，归咎于政府所采取的市场降温措施。

面临大选，人民行动党在这个重要的阶段，不能因政府允许组屋价格的下降，造成选民不满情绪的反弹和动乱，而最终失去关键的一票。
必须诱导新加坡人相信未来政府组屋的价格，因持续不断上升所带来巨大的财富，是由于人民行动党和政府的本事。

作为“大棒”升级使用争取选票

随着吴作栋先生14年前在金吉区的讲话，资产价值是因产业提升和翻新使得在转售政府组屋价格时增益。

自20世纪90年代，资产提升长期以来是每一届大选的议题，十分方便用来威胁选民投票支持人民行动党。

1997年，总理吴作栋承诺给与静山区居民单位设施的提升，终于人民行动党犹若布袋里装了很多好吃东西的选举选获胜球队。

2006年选举时刻，同样的胡萝卜在波东巴西和后港的居民面前摇来晃去。不幸的是，虽然该区居民像居住在别处的新加坡人一样需要支付税收，他们并没有上钩，老化租屋提升计划失去诱惑力。

这种“猪肉桶”的政策是行动党推出的独特品牌，近其所能以单位重售的价格引诱选民确保其政治霸权。倘若居民无法从他们出售的组屋获得丰厚的利润，它必将失效。

虽然像烧烤炉的公共园地，游泳池和街头似的足球场看似是重售单位的出售时不可或缺的设施（以后港和波东巴西重售单位的价格与邻近区域的组屋相比），组屋提升计划无疑仍然可以成为人民行动党一个有用的心理工具，可以威胁和胁迫选民投自己一票。

几乎将毕生积蓄都购置政府组屋的新加坡人，他们最终看到作为财产的组屋升值被剥夺，并且大幅度下降，政府解释这奇怪的现象为新加坡人虽然普遍希望看到国会有更多反对的声音，但他们更喜欢听到那些反对之声来自其他地方，而不是他们所在的选区。

新加坡人一旦高价买了单位就将更加受制于人民行动党，因为他们不能承担因反对派取胜，而迁怒人民行动党使自己资产可能遭受贬值的风险，从而减少政府给与社区租屋资助金的补贴

虽然居民无法明确单位的实际价值，除非它们出售和“升级”到更昂贵的单位，从而只有增加他们的债务负担，误解继续深深扎根于他们的潜意识之中—组屋单位的上涨价格会为他们创造财富。

作为没有财富和政府资源的反对党，纯从以经济因素考虑的新加坡人必将讨厌投他们一票。

以往多次的选举分析表明，反对派忠实支持者不论其组屋选区升级与否只占20至25％的选民。

尚未决定的中间选民约占35至40％，虽然他们没有预设的政治立场，甚至不能像人民行动党一样，产业升级是导致他们投票选举人民行动党的最主要因素。毫无疑问，这解释了为什么反对派要夺超过50％的选票，在集选区尤其是艰巨困难。

如果他们（选民）是自政府加以控制的合理的低水平价格买来的，组屋升级不会永远成为一个议题。由于他们不会赚钱，无论如何，（这应当是受资助的公共房屋的情况）也无关紧要，只要区内和附近区域有足够的设施。

让公民对政治冷漠和无能为力

一个重要的因素，但往往被忽视的原因是组屋保持稳定的高价格，是维持公民服从，麻木不仁，对政治不感兴趣。

人民行动党是一个专制的政党，不容忍任何政治异议或反对其统治，也没有受到严格的公共审查得不舒服感觉。

当作家林宝音一如既往的多加询问，她立即被总理吴作栋告诫去“参与政治或闭嘴”。

让国人远离政治的唯一方法，就是迫使他们为改善物质生活去努力赚取金钱，为了养家糊口，别无选择。

政府组屋的价格容许在新加坡人仍然可以负担得起的情况下逐步提高，唯有如此，他们将一生不得不埋头忠诚为到期的抵偿押权贷款忙碌工作。

随着人们为了支付有权租赁自己拥有的溢价政府组屋单位，不得不花费绝大部分时间去赚钱。他们无暇对政治产生兴趣。

由于立场不稳定，大多数新加坡人不可能冒险打破饭碗加入反对行列，因为政府是新加坡最大的雇主，甚至有意与政府font-family: Sim

ItchyArmpit SG

i wonder who will read finish... at first i tot it is just a table on how much hdb flats cost nowadays...

Georgetan884 SG

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September 18, 2009 by admin
Filed under Snippets

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From our Correspondent

Below is a scanned copy of a flyer emailed to us by a reader:

Dear admin,

I live in a HDB flat & I received this piece of note slipped under the door recently.

I couldn’t paste it on your webpage so I decided to email it to you instead as you may be interested in it.

I’ve erased the telephone number course I don’t want the person to receive any prank call. I believe this is no fault of the PRs or foreigners but rather the problem lies with the government policies.

The question is, how can we ever hope to have affordable HDB flats when we have foreigners who are distributing flyers saying they are “willing to give higher price..” to buy the same HDB flats we are living in??

EDITORS’ NOTE:

With the Singapore government being the largest landlord and property developer at the same time, there is no free market in Singapore as it is able to fix the housing prices as it wishes due to its complete monopoly.

The prices of HDB flats are rising due to the following artificial factors created by the government:

1. Constant and ready demand for HDB flats as they are a basic necessity in Singapore. If Singaporeans and PRs do not purchase HDB flats, they will have no where to stay unless they opt for rental.

2. Increasing demand by allowing an increasing number of foreigners to become PRs and to purchase flats. As PRs usually hold a decent-paying job, they will have few problems paying for a resale flat. Besides, since some may not settle down in Singapore, they do not mind paying more now as they can always sell them at a profit later on when they leave.

3. Limiting supply by capping the number of new flats built: With few completed subsidized flats in the market, Singaporeans will have no choice but to compete for flats with the PRs in the resale market thereby causing the prices to go up. The number of flats built in the last few years are considerably less than that in the 1990s. (HDB Infoweb)

4. Complete monopoly over the public housing sector: With virtually no competitors, HDB is able to sell its flats at any prices as it wishes as there is no pressure on them to bring down the prices.

5. Since there are PRs like the above couple who are willing to “spoil the market” to secure a flat in their desired location, sellers will naturally jack up the COVs to make a “killing”. This will eventually lead to higher COVs in the long run. Already we are seeing ridiculously high COVs like the $70,000 paid for a 3-room resale flat in Toa Payoh (Lianhe Wanbao, 14 September 2009)

☃® SG

There is no such thing as free markets idiots. Cause the demand and supply can be manipulated in a free price market.

☃® SG

In order to prevent speculation, new flats should be priced at subsidized cost price and only allowed to first time buyers. PRs should then buy the resale flats... and HDB can earn all they want from the foreigners.

This in turn will encourage foreigners to take up citizenship in singapore.

Why cant they get this simple logic into their brains?