HDB: buy resale if you cannot afford private
September 17th, 2009 | 
Author: From our Correspondent
For a third time in a week, HDB was forced to issue another blanket reassurance to disgruntled Singaporeans that HDB flats remained affordable except this time, the letter to the Straits Times Forum was not penned by its Deputy CEO, but two deputy directors from HDB and URA.
The writers claimed that the government is committed to ensuring that public housing remains affordable to the majority of Singaporeans through “proper targeting of subsidies and calibrating supply to match demand.”
The income ceiling ensures that the Government’s limited public housing subsidies are given to those who need them more. At the current ceiling, about eight out of 10 Singaporean households qualify for housing subsidies.
What was not mentioned that the income ceiling of $8,000 was put in place 15 years ago in 1994 and it does not factor in the fluctuating bank interests, change in income and inflation over the years.
It also does not answer the key question whether a couple will have sufficient savings left in their CPF for their retirement at the end of the thirty year tenure.
They added that those with higher incomes can buy HDB resale flats, where there is a wide range to suit varying budgets. For example, if a household with a monthly income of $10,000 buys a five-room resale flat in a non-mature estate at the average price of $364,000, only about 15 per cent of their income is needed to service the loan.
It is glaring that the two HDB officers are not even aware of the prices in the present market. The prices they quoted are probably garnered from data released 3 months ago. At this moment, it is difficult,if not impossible to buy a 5-room resale flat at this price.
5-room resale flats in prime areas like Toa Payoh, Bishan and Ang Mo Kio are asking for prices close to $400,000 and beyond while those in Yishun and Clementi at around $350,000. This figure is not inclusive of the exorbitant COVs that sellers are asking which can range from between $10,000 to $50,000. A 3-room flat in Toa Payoh was transacted recently with a COV of $70,000! (Lianhe Wanbao, 14 Sept 2009)
The value of a 5-room unit at Duxton@Pinnacle has now shot up to more than $600,000 which is comparable to prices of condominiums in the surburbs. Even similiar-sized BTO flats being built at Punggol are priced at around $350,000. (HDB Infoweb)
The gap between public and private housing have narrowed in recent years. Some larger HDB flats in the central districts command a price higher mass market homes. Surely public housing should be considerably cheaper than those built by the private developers?
The deluge of letters questioning the pricing system of HDB as well as imploring the government to bring down the prices is a reflection of the general scepticism among the populace towards the government’s persistent assertation that HDB flats are “affordable” which are beginning to sound empty, hollow and even amusing for it it is contrarian to reality on the ground.
It is obvious that both HDB and the people are talking about different yardsticks of assessing housing affordability all along. What is deemed affordable by HDB is a mere arbitrary figure which does not translate to affordability to the buyers purchasing the flats.
The government should take active measures to bring down the prices of HDB flats which it is entirely capable of doing so since it enjoys a complete monopoly in the public housing sector instead of repeating its official mantra – “HDB flats remain affordable” again and again like a parrot which few Singaporeans now even bother to listen judging from the barrage of questions and protests going around in the last few weeks.
Posted in Editorial
Have the Singaporeans noticed that whenever you feedback to the Government, their replies are always standard. For HDB now, its reply is “HDB flats remain affordable”. For our complaint of too many FTS, the government’s reply is “We will take care of locals first”. For non-transparancy of Temasick, their reply is “We are private company, we do not have to disclose anything”. For too many Leeregime clan holding high positions in the government, their reply is “Leeregime is an extraordinary family”. The list can go on.
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i hope the government continue to make their stand and don’t give in…
in this way they will lose more votes by the disgruntled citizens of singapore…
hope a new government will come in and do what is right for its citizens. Almost zero due to the un-level playing field set up…even if a new gov’t comes in…they still have to fight it out with the entrench obstacles left behind in the various ministeries and stat boards by the previous incumbent gov’t is they are ever remove via GE by singapore citizens…
it is a super low probability…a small peanut hope only…but we will still vote right if given the chance to vote at all…
haiz.
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I have already made up my mind to vote for the opposition regardless of who he/she is. As long as he/she is not a PAP candidate, even if you are Dr. Chee Soon Juan.
Is Dr Chee really dangerous to Singapore like what PAP wants you to believe? Watch this link from youtube and judge for yourself.
http://www.youtube.com/watchv=LL3ELAd3CzY&feature=player_embded#t=13
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@The Patriot
Even now, to the many people who are unhappy with the government, many still do not realised that these are symptoms to a deep seated problem. The root cause is the hegemony of the PAP. The cure is a severe curtail of their power by virtue of a 2nd political party, which is in our hands to create.
Once PAP’s root cause of arrogance is cured, all matters will attend to itself. For example, if they give standard replies or ignore us, a strong alternative party will slam them in parliament and force an issue by way of parliamentary votes. A strong alternative party can table a motion to pass certain laws (e.g. curbing influx of foreigners and give limited rights to PRs and new citizens).
Otherwise, we are just pecking at the symptoms while ignoring the root cause and this will not do anything. It’s like just placing a cold towel on the head of a high fever person when the body should be treated in the case of an infection.
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Well that’s their unique way to cure dissent! Answering Machines!
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data gathered from HDB’s website Median Resale Prices by Town and Flat Type (http://www.hdb.gov.sg/fi10/fi10201p.nsf/WPDis/Buying%20A%20Resale%20FlatStatistics%20-%20Median%20Resale%20Prices%20by%20Town%20and%20Flat%20Type?OpenDocument) shows that the only towns having a median price closest to the stated average median price of $364,000 are Woodlands ($340,000), Sembawang ($362,000) Choa Chu Kang ($360,000), and Yishun (365,000).
How many people can these estates hold? Is HDB asking everyone to live there?
An average price of $364,000 isn’t cheap either.
Does this mean that HDB isn’t building enough public housing to meet the demand? Or could they be not building them fast enough?
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their reply is “afforadble”
in fact the answer is
you got the money, go buy condo/landed property lor.
it’s affordable of course.
you got enough to buy hdb
you dont have the money. please go suck thumb and live with your parents and it’s not our fault the prices is going up “to help us in our next election. coz most of you live in a hdb” (All the price hike only profit the older gen and those who owns a hdb.)
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T0 sum up the content of the letter to ST: Take it or leave it
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What have PAP MP done for the local when things are not going for the citizen ?? Questions asked by them are just for Wayang!
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We vote for PAP, they collect million dollar salary and reward us by giving us with stressesssssssss!
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i guess what they have in mind:
“it is hard to please everybody…..so we have to please ourselves.
who cares about the minons who can’t afford? there are alot of fools out there who are able to pay thru’ their a**. in the worst case, let’s invite suckers from overseas to fill this gap.”
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Just wanted to point out that the article is also not updated enough about hdb prices. $400k dun even get u a 5 room flat in AMK anymore, let alone Bishan and Toa Payoh. $400k gets u a 4 room flat or a nice 3 room flat. Serious! Check out the ads anywhere and you’ll see. This link below, is for a nicely renovated 3 room flat, near MRT, at least 25yrs old I believe…82 sq meter, guess how much? Grand asking price of $388,000.
http://www.propertyguru.com.sg/listing/409922/for-sale-ang-mo-kio-avenue-5
For the record, I have been blogging a lot about this unaffordable housing topic but Im starting to get the feeling we should all leave it alone now. Let it build up. Stand one side. Wait for the bubble to burst. The higher it goes, the harder they fall. We’ll see.
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What is meant by affordability?
PAP view:
HDB house=asset, must not depreciate.
if depreciate, 80% of the population will be unhappy.
Result: voted out
Newly-wed couple with combined income above 8k who make up 5% of population:
We have car loans to service, want Europe honeymoon, want fine dining at restaurants, etc, even if we can afford small condo, we still want cheaper flat, otherwise no savings.
Even though we know we can give up certain luxuries in life for 1-2 years to save up for COV, we refuse.
We don’t care if our parents’ house depreciate in value.
We think that Singapore is not land scarce.
Government is not taking care of us.
Newly-wed couple with combined income between 5k-8k who make up 10% of population:
We have car loans to service, want Japan honeymoon, want fine dining at restaurants, etc, even if we enjoy small grant of 30k or 40k (house becomes slightly less costly compared to PRs), we still want cheaper flat, otherwise no savings.
Even though we know we can give up certain luxuries in life to save up for COV for 2-3 years, we refuse.
We don’t care if our parents’ house depreciate in value.
We think that Singapore is not land scarce.
Government is not taking care of us.
Newly-wed couple with combined income below 5k who make up 5% of population:
We cannot afford car and take public transport, simple honeymoon, eat at hawker centre, etc,
Even with our grant of 40k to 80k, we find it hard to get resale flat due to the rising COV.
Government should give us more grant to offset COV.
Current HDB owners:
We want COV for our flat. The more the merrier. We are glad that Government allow PRs to buy since they are willing to pay COV without complaining.
All complaints of barring COV are disgusting.
If Government bar us from asking COV, we will vote them out.
Conclusion:
There is no right and wrong. When there is a problem, there is no clear-cut solution that would not cause further problems. Before demanding something, we have to assess the short-term impact and long-term repercussion. Is there a win-win solution for everyone?
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@Don on Fri, 18th Sep 2009 11:11 am
“Is there a win-win solution for everyone?”
The short answer to your question is for the govt to stay within the boundary of the constitution, respect our liberty & stop trying to run our lives for us.
As an example, the CPF system, among other factors, artificially prop up property prices.
Some had argued that CPF prevents people from squandering away their money.
I personally feel that people should be allowed to enjoy the fruit of their labours. They should be allowed to think for themselves & spend their hard earned money in whatever way they like. Yes, even to squander away their money. It’s their own hard earned money they’re spending, so what has it got to do with you & me??
If the govt is sincere in helping the people to save & retire, they should concentrate on providing financial education to the people. Thrift is a good habit that should be fostered from young through education.
The idea that the govt should retain a portion of our hard earned money to protect us from our own folly is preposterous!
Is there any wonder foreigners say Singaporeans are stupid?
This is just one example.
The govt’s role should be limited to maintaining law & order.
People should be free to do whatever they like with their lives as long as they don’t cause any harm to their neighbours.
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[...] – Sgpolitics.net: Root Cause of Sky-High HDB Flat Prices – The Temasek Review: HDB: buy resale if you cannot afford private – Who Moved My Singapore Cheese: A rather meaningful comment that says it [...]
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