What is the actual cost of a HDB flat?

[Morphis]

As much as I wish not to agree with da Gahmen or HDB policies but they r not da only players in da game.

Just a couple o years ago, there's a issue of over supply of residential housing versus demand.
Has da over supply issue been settled?
HDB ERS, BTO, WIS, MUP, LUP is now splashed all over da island nowadays.
Increase in supply or demand?

Lets take a look at da private sector. Da company I'm working in alone, have 7 new private condo in da pipeline due for completion in da next 3 years not including da 3 condos comleted tis year.
Pricing per metre sq is rocket high irrelevant to location. It's the private developer's game now, will they bother abt supply & demand.

Wat will happen after 3-4 years later with so much private or public housing?
Da welloff will have plenty of choices but wat abt da not so welloff.
Gahmen have to step it to cap da pricing, make their housing avoidable and attractive to rich or poor.
It's a very big cake.
Why is da Gahmen not to partake in any part of it?

 

[melvin]

As much as I wish not to agree with da Gahmen or HDB policies but they r not da only players in da game.

Just a couple o years ago, there's a issue of over supply of residential housing versus demand.
Has da over supply issue been settled?
HDB ERS, BTO, WIS, MUP, LUP is now splashed all over da island nowadays.
Increase in supply or demand?

Lets take a look at da private sector. Da company I'm working in alone, have 7 new private condo in da pipeline due for completion in da next 3 years not including da 3 condos comleted tis year.
Pricing per metre sq is rocket high irrelevant to location. It's the private developer's game now, will they bother abt supply & demand.

Wat will happen after 3-4 years later with so much private or public housing?
Da welloff will have plenty of choices but wat abt da not so welloff.
Gahmen have to step it to cap da pricing, make their housing avoidable and attractive to rich or poor.
It's a very big cake.
Why is da Gahmen not to partake in any part of it?

Ya ... all becos some one says dat the prices for private will go up n he started off by increaseing his sales price for his developement, prices den start to rocket skywards when his niche developement come out juz becos it is in a world of its own! then others start to follow suit!!! And yet there r still buyers:sweat: Definately nt a case of needs vs demand!

Now resale owners r looking at sky hi prices oso!:angry:

 

[Silence Sky]

Dear Waileong:
....
Public housing is unlike Condos and bungalows, the former is a basic necessity and the later is a luxury item. When we apply economic principle here, we say that Public housing is inelastic. Meaning that even the price is unreasonable, we (commoner) will still have to buy and absorb most of the burden. So can you see that is not basic supply and demand?

It is all about supply n demand if not why the govern. stop building EA n 5rm but built 4rm 3rm n 2rm? Why they need to break up bigger unts 5rm and abv into 2rm or 3rm? Isnt it becos on the demand in smaller units n bigger units nt in demand dats resulted in the abv?

QUOTE]

Hi Melvin:

Yes, agree with you about the supply and demand. But if you examine closer doesn’t it tell us another story. There is demand for housing, but people simply can’t afford the bigger unit. Anyway, I think the usable area of 5rm flat is about the same as those 4rm built 25 years ago.

 

[smallaperture]

Various types of views here:
Type A - the view on the socio-political-economical view. In my view, all these are very, very chim to me and you can argue non-stop until the next election....

Type B - bought 2 cheap HDB flats and sold it off at a handsome profit and laughing all the way to the bank. Now, selling to downgrade and again :bsmilie: :bsmilie:

Type C - just started working. Find that housing is on the high side compared to 20 years or 30 years ago. Well, get what you can afford like a 3rm flat or just rent first and buy later when you can comfortably afford. BTW, are your fellow folks in India, China, HK or Malaysia better off?

 

[melvin]

Hi Melvin:

Yes, agree with you about the supply and demand. But if you examine closer doesn’t it tell us another story. There is demand for housing, but people simply can’t afford the bigger unit. Anyway, I think the usable area of 5rm flat is about the same as those 4rm built 25 years ago.

Sizes shrank due to
youngsters nowaday live on their own not wif thier parents so no need big flat! Then the 2 elderly will be left at home when their kids grow up n shift out! And if they r staying in a 5 rm flat they need to downgrade smaller flat dats why the demand for small flat!

family size reduce, working youngster dun give birth much or late in production, they say no need so big for a family of 3 or 4 members so flat size reduce lor...easy to maintain oso....:bsmilie:

Anyway nowadays 5rm n 4rm abt the same 3bedroom but bigger space so why go buy a 5rm unless it is the older version wif 4 bedroom then go for it!(if u need all the 4 bedroom)

 

[Silence Sky]

This talk about so-called "intrinsic value" is meaningless. You are throwing the term around in this discussion as if it actually means something. Lets say we grant you the meaning that you purport the term to have, and see how your argument holds water.

Lets talk about airline fares. What is the "intrinsic value" of a flight from Singapore to Perth? As the consumer, do you really care? As far as you are concerned, the only value that matters to you is the MARKET VALUE of the ticket. Will you pay "intrinsic value" if it were many times above the "market value"? I suspect not.

What is the "intrinsic value" of a Canon camera made in Thailand vs one made in Japan? It probably costs Canon a lot less to make the camera in Thailand, but does the value of the camera not lie in its function and reliability, rather than its cost of production? I.e., if the camera made in Thailand had the same function as the one made in Japan, and proves itself more reliable, does it not hold more value than the Japanese one, cost of production notwithstanding?

You see, your attempt to link the cost of producing a HDB flat to its selling price is full of holes. The only "value" that matters here is market value.

True, talking about “intrinsic value” in the two examples you quoted seems meaningless, especially when we care only about its market value and the level of satisfaction these luxury items can bring us.

So let’s just talk about the market value. I also want to give an example, a lame one you may think.
1 litre of bottled water cost about $1.50 in the market. Willing buyer and seller agreed at market value.
Me, PUB, also want to sell you water at market value. I will give you a 50 cents subsidy and sell you at $1 per litre. It is definitely not expansive, it function and taste just like the bottled water. Life source depends on water, it is definitely worth the value you are paying. I am not monopolizing the market, you can go fetch your own water in nearby reservoir or you can collect rain water if you do not want my service.

The only "value" that matters here is market value.

How is my example, huh?

 

[Silence Sky]

I agree with SILENCE SKY. When can we earn enough for retirement??


3K * 12mth = 36K
36K * 6 years = 216K

hey man......it actually can work. IF try not to have children and wife, don't dont spend.

we can actually pay off the 200K flat in 6 years......

Brother:

Six years is definitely not enough lah, you will need a longer period to pay off the 200k loan.

First, even if you don’t need to eat, you Ministers have to. You are still required to pay your dues: income tax; TV and radio license fees; conservancy fee, electrical and water bills,ect.

What about your contribution to CPF SA and MA?

What about the interest on your loan. If you take 160k loan, repay over a period of 25 years at an interest rate of 2.6%. You have to pay an interest of $57,000.

 

[Zplus]

****CUT*****
CPF contribution was cut from 20% to 13%, it greatly affect my ability to pay for a HDB flat. It is ok since this measure is to keep my rice bowl. But before garment starts to pay themselves handsomely on the pretext of good economics growth, don’t you think they should first restore our 20% contribution? We have a good government, I am not asking for regime change but calling for more attention to our basic needs.

I admit from the first post, this is not a simple problem that can be solved without some sacrifices being made and I really do not have a solution to this problem. Yes, market forces are at play, but I see it as those who spend out of their means have set the price trend. Shouldn’t something be done here, rather than conveniently take it as the prevailing market value.
***CUT***

Looking at this long thread.... (I have only read a few I admit).....

1) Yups, the cut from 20% to 13% did hurt initially. But if the economy has truly recovered and your current company is not paying you enough, then maybe you should move on to the next company that pays you 7% more salary and thereby doing yourself a favour by restoring the lost 7%.... of course, you will then need to prove your worth for the new company to top off that 7%.....

And the ability to pay off that HDB flat is directly related to the decision you made to buy it in the first place.

2) Well, the CPF contribution rate in economics terms is a form f forced savings. So effectively the reduction to 13% is a paycut. When negotiating pay, you should factor in the CPF contribution. So, as I have said, if that 20% is not restored... instead of hoping for it to restore... move on to some place that is willing to pay you more.

3) Market price is always determined by supply and demand. Artificially fixing prices would result in more inefficiencies. If the price is really high... then dont buy. If enough people believe the price is too high... the price will naturally drop because there are no buyers.
;p

Ok just my ramblings... sometimes it pays to take matters into your own hands and be the captain of your boat. Rather then letting it drift with the tides......

Its not easy to survive in Spore. But you also need to take some positive steps to move in the right direction. My 2 cents anyways....

Be happy and keep shooting... :bsmilie:

 

[Chiang]

Brother:

Six years is definitely not enough lah, you will need a longer period to pay off the 200k loan.

First, even if you don’t need to eat, you Ministers have to. You are still required to pay your dues: income tax; TV and radio license fees; conservancy fee, electrical and water bills,ect.

What about your contribution to CPF SA and MA?

What about the interest on your loan. If you take 160k loan, repay over a period of 25 years at an interest rate of 2.6%. You have to pay an interest of $57,000.

i think he meant that all having a take home pay of 3k.

:cry: i dun

 

[melnjes]

yep, many of them deserve a second or third chance in life to move on.

Upz for you. :thumbsup:

I've got a friend who was a secret society member, abused drugs and was in and out of jail over twenty years. Now he's a totally changed man - people do deserve a second chance!!

 

[melnjes]

What about the interest on your loan. If you take 160k loan, repay over a period of 25 years at an interest rate of 2.6%. You have to pay an interest of $57,000.

ya, your calculations are correct. I wonder how many people actually know how much they are paying if they pay up to the maximum of 25 years.

Also, just to add an additional perspective:

(a) a 160k loan with interest rate of 2.6% and tenure of 25 years will mean a monthly payment of about $700.

(b) The $700 paid today is not the same as the $700 paid next year nor the $700 paid ten years down the road. Assuming the same interest rate and tenure, that $700 26 years in the future is actually $356 present value.

So that interest amount of $57k you got isn't exactly the value we would put it out to be at face value - it's actually less (if it's any consolation to you lah).

Like what Zplus said, the ability to pay off the flat is directly linked to our own decision to buy whichever flat in the first place. Don't have enough money to retire? Do like what everyone else does, downgrade and let someone else in the new generation take your place into the same trap.

Anyway, since everyone is assuming the hypothetical person to be earning 3k, that person shouldn't need to pay income tax , so I really wish you would stop mentioning about paying tax to feed the ministers.

 

[Silence Sky]

ya, your calculations are correct. I wonder how many people actually know how much they are paying if they pay up to the maximum of 25 years.

Also, just to add an additional perspective:

(a) a 160k loan with interest rate of 2.6% and tenure of 25 years will mean a monthly payment of about $700.

(b) The $700 paid today is not the same as the $700 paid next year nor the $700 paid ten years down the road. Assuming the same interest rate and tenure, that $700 26 years in the future is actually $356 present value.

So that interest amount of $57k you got isn't exactly the value we would put it out to be at face value - it's actually less (if it's any consolation to you lah).

Like what Zplus said, the ability to pay off the flat is directly linked to our own decision to buy whichever flat in the first place. Don't have enough money to retire? Do like what everyone else does, downgrade and let someone else in the new generation take your place into the same trap.

Anyway, since everyone is assuming the hypothetical person to be earning 3k, that person shouldn't need to pay income tax , so I really wish you would stop mentioning about paying tax to feed the ministers.

Brother,

Thanks for your consolation. You are very right, A dollar in the future is worth less in today’s value. But Net Present value is not going to help me because I have no capital to start with and the monthly $700 is my future money. And I will again be sad if I look into the ROI of my foregone 57k. If I invest $2280 annually for 25 years with a return of 4%, on top of the 57k principle sum that I have saved, I still earn an interest of $41,000.

About downgrading, not everyone has that kind of luxury, especially for those who bought their properties at high price. I assume downgrading from a four room flat, you will have to pay a resale levy of $40,000. If you sell at $220,000 and buy a three room at $160,000. How much you got left after paying the agent fee; GST; lawyer fee; stamp duty and resale levy? All these assuming that you have pay up your loan fully.

I have heard about this, but not very sure. If your flat tenure is less than 30 years, banks will not provide loan. This could mean your old flat will not have much resale value, since buyer could not loan form the bank.

Ok, upon your request, I will not mention about paying tax to feed the ministers.
But I do pay tax when I earned 3k per month, assuming no tax relief, I have to pay $720 for income tax.

 

[Silence Sky]

Looking at this long thread.... (I have only read a few I admit).....

1) Yups, the cut from 20% to 13% did hurt initially. But if the economy has truly recovered and your current company is not paying you enough, then maybe you should move on to the next company that pays you 7% more salary and thereby doing yourself a favour by restoring the lost 7%.... of course, you will then need to prove your worth for the new company to top off that 7%.....

And the ability to pay off that HDB flat is directly related to the decision you made to buy it in the first place.

2) Well, the CPF contribution rate in economics terms is a form f forced savings. So effectively the reduction to 13% is a paycut. When negotiating pay, you should factor in the CPF contribution. So, as I have said, if that 20% is not restored... instead of hoping for it to restore... move on to some place that is willing to pay you more.

3) Market price is always determined by supply and demand. Artificially fixing prices would result in more inefficiencies. If the price is really high... then dont buy. If enough people believe the price is too high... the price will naturally drop because there are no buyers.
;p

Ok just my ramblings... sometimes it pays to take matters into your own hands and be the captain of your boat. Rather then letting it drift with the tides......

Its not easy to survive in Spore. But you also need to take some positive steps to move in the right direction. My 2 cents anyways....

Be happy and keep shooting... :bsmilie:

Hellooo Zplus,

Yes, you are right, have to depend on ourselves for survival.

We did say something on the Market price and supply & demand stuff earlier, so so confusing.
When nobody buys the Jurong extension units, the price also did not come down much leh.

When I am married and second child is on the way, how can I not buy a flat?

There's no choice when one bought a flat before the CPF cuts comes into place.

 

[Silence Sky]

Wahh, Flipped the Strait Times just now, saw so many reports and articles on rendering helps to the poor and destitute.

Is this the Wee Shu Ming effect?

 

[Chiang]

OT a bit

read TODAY's tabloid news on employer treatment for staff who inform the mgmt that 1 is pregnant.

really feel sad that the 1 can lose a job so fast , n that we are at the mercy of the mgmt , tis really the case ,
fit , strong , smart n young , we will invite u in , else ................ get in line please.

now thinking also afraid of having a child, can i support them , now really regret not getting a 3 room flat , really

 

[scanner]

OT a bit

read TODAY's tabloid news on employer treatment for staff who inform the mgmt that 1 is pregnant.

really feel sad that the 1 can lose a job so fast , n that we are at the mercy of the mgmt , tis really the case ,
fit , strong , smart n young , we will invite u in , else ................ get in line please.

now thinking also afraid of having a child, can i support them , now really regret not getting a 3 room flat , really

The answer is our manpower policy are pro-employer. That is the problem!
With a useless union and a government that is pro-employer, who suffer?

BTW, are those politicians in the parliment wearing white uniform are the well to do lots?
I just wonder....

 

[Chiang]

http://sg.news.yahoo.com/061110/5/singapore240522.html

i think really must look for 2 room flat liao

 

[melvin]

http://sg.news.yahoo.com/061110/5/singapore240522.html

i think really must look for 2 room flat liao

:think: There is a saying:" Dun ask what the Nation can give u but ask what u can contribute to the Nation!"

 

[dkw]

The answer is our manpower policy are pro-employer. That is the problem!
With a useless union and a government that is pro-employer, who suffer?

BTW, are those politicians in the parliment wearing white uniform are the well to do lots?
I just wonder....

Who will employ the employees if the employers go out of business? The government of France is very pro-employee, but guess what, unemployment is high and it is worse for the young and new graduates.

The best way for a government to look after its citizens to to make sure the employers and businesses can survive in a tough business environment.

 

[melnjes]

Exactly. I'd rather have a job than no job. There are a lot of countries who can take our place if we are not competitive. Let's not delude ourselves to think we are indispensible in this world.

Sometimes I wish we could think further than just propose the obvious solution to a problem, because the obvious solution is usually a short-sighted one.