Hdb new flat now expensive/cheap/ok

[cougar]

Hmm...We all think the same way. In future we can share moolah to buy a plot of land together. lol.

 

 

Yes, we can create a retirement fund for like-minded singaporeans, buy the land, build a condo and employ our own trusty security guards and building management to manage the place for Sg senior citizens. Isnt it like MIW's idea of retirement village in JB and Batam? MIW really good, projected well in advance before we do. MIW have the moolah, we dont, we have to be united to have a private fund.

[hachi]

They have actually done many things about it over the medium to long term - in the opposite direction.

 

Many years ago, loan periods were capped at 20 years. Now more than half the buyers take 30 years -> higher borrowing amount -> higher prices.

 

Many years ago, double income families were not so common. Now most families are double income -> more income to service loans -> higher borrowing amount -> higher prices.

 

Many years ago, interest rates were much higher. Now interest rates are so low that for the same income, your monthly repayment goes a lot further to repaying principal instead of interest -> higher borrowing amount -> higher prices.

 

In previous recessions, CPF contribution rates were cut. With lower CPF monies to pay monthly instalments, borrowers could not borrow as much as the past. Prices fell during recessions. This recession, the combination of no CPF cut and super low interest rates continue to fuel liquidity -> higher borrowing amount -> higher prices.

 

A few years ago around 2004, about 1 in 7 home loans were in negative equity as home prices fell significantly from 2000-2004. HDB was selling its new flats at such low prices that previous buyers in Jurong West complained that the HDB was selling new ones about $100,000 less than they paid for theirs a few years back. To deal with this problem, HDB slowed down its building programme significantly.

 

Around the same time, the financing rules were liberalised by both MAS and CPF. Until around 2005, loan amounts were capped at 80%, CPF withdrawal at 10% CPF and the rest in cash (for private properties). Now the maximum loan amount is 90%. Even at 80% financing, it's 15% CPF and the rest cash -> higher borrowing amount -> higher prices.

 

GoV can gives more grant such as 100-150k anyway it will maintain the price current price the market is holding and build more BTO.

Look at CPF we cant take out even we died. So the money is only on paper physically no much had changed hand using grant.

Support affordability and the same time create paper wealth. Looked good on retirement planning but in relatity u cant cash out....

[hachi]

Yes, we can create a retirement fund for like-minded singaporeans, buy the land, build a condo and employ our own trusty security guards and building management to manage the place for Sg senior citizens. Isnt it like MIW's idea of retirement village in JB and Batam? MIW really good, projected well in advance before we do. MIW have the moolah, we dont, we have to be united to have a private fund.

Set a private fund like CPF. Handle the money in a more appropriate way. Plan for retirement and housing.

[paperger85]

Then let you handle the private fund so that we can't cash out just like our CPF monies? LOL...

[claudia-81]

GoV can gives more grant such as 100-150k anyway it will maintain the price current price the market is holding and build more BTO.

Look at CPF we cant take out even we died. So the money is only on paper physically no much had changed hand using grant.

Support affordability and the same time create paper wealth. Looked good on retirement planning but in relatity u cant cash out....

 

ya! TOTALLY AGREED/WELL SAID the new generation are more smarter to see in deep and well studies on the politic and movement of the government statics, the only issue is SINGAPOREANS dont really have the voicing out power or so call the freedom of speech, not saying been control or press down, but.....

being a singaporean nowadays are vey tough, more tough when the yrs go by.. all up and up, salary? got up? this is not the balance, the country is keep moving fast pace, but i think those leaders up there should really take a short break and look behind the others, who do not really have the same pace like what it should possess due to wealth gap driffing further apart! i believe most singaporeans are keep migrating or working oversea, why> the answer and solution i bet the government should have and really do something befor e singaporeans may have a strike (though the chances very slim) but nothing is impossilbe!

[paperger85]

Its impossible to have a strike. Singapore is so small, where can you hide if they want to catch you? The only reason why the Singapore government is able to control us so well is because of our land mass and population. If you were to put LKY in China or even Malaysia, the place will f**ked up coz there is just too many people and difficult to control.

[cougar]

Then let you handle the private fund so that we can't cash out just like our CPF monies? LOL...

 

No, a private fund would be given to a trustee, a neutral party who has no interest in the money or asset, his job is just to manage like a professional. The vested interest parties are us, the deposit account holders/or shareholders of a company, we can vote the trustee out if he is not doing a good job. Every year we engage independent auditor to audit his work and accounts.

 

CPF is different, its passed by legislation, written by parliament, so its has its own agenda. A private fund would be written by us, in our own interest.

[curiously always]

hey guys this thread interesting alot lei .. continue lah .. i'm getting married nxt yr ... still thinking wr to buy flat ... hmmm ... now everywr oso same ... high2 price ... tot of just getting a hdb rental flat first .. collect cpf first .. me n my bride to be only have bout 30-35k only nxt year ... for me i dowant to buy x flats ... no use lah ... get the cheapest there is... no problem with location ... now everywhere oso got supermarket (nomore wet market liao in future,believe me ...) ... schools for kids also around ... mcdonalds everywhere ... can call samo 24/7 ... got bike to move around ... got lots lots of shopping centre ... small malls ... what else u want ...??? correct or not?? hahahaha ... i'm kind of serious here ... don't be choosy ... save as much as u can for golden years .. don't depend on cpf though .. dat 11 only for house instalment ... upgrade,so get higher salary(depending on ur boss,hahahaah!!! like as though bosses nowdays care bout their employee so much) ... haiz ... type alot liao ... wat else to say bout s'pore?? more n more foreigners taking our places ... poor thing for the low educated s'poreans here ...outz!

[paperger85]

hey guys this thread interesting alot lei .. continue lah .. i'm getting married nxt yr ... still thinking wr to buy flat ... hmmm ... now everywr oso same ... high2 price ... tot of just getting a hdb rental flat first .. collect cpf first .. me n my bride to be only have bout 30-35k only nxt year ... for me i dowant to buy x flats ... no use lah ... get the cheapest there is... no problem with location ... now everywhere oso got supermarket (nomore wet market liao in future,believe me ...) ... schools for kids also around ... mcdonalds everywhere ... can call samo 24/7 ... got bike to move around ... got lots lots of shopping centre ... small malls ... what else u want ...??? correct or not?? hahahaha ... i'm kind of serious here ... don't be choosy ... save as much as u can for golden years .. don't depend on cpf though .. dat 11 only for house instalment ... upgrade,so get higher salary(depending on ur boss,hahahaah!!! like as though bosses nowdays care bout their employee so much) ... haiz ... type alot liao ... wat else to say bout s'pore?? more n more foreigners taking our places ... poor thing for the low educated s'poreans here ...outz!

 

HDB rental flat? The average waiting time for a HDB rental flat is one year and the combined income cannot be more than $1.5k.

[curiously always]

oic ... like dat find cheapest flat there is lor ...

[contrarian]

Its impossible to have a strike.

You aren't old enough to have seen strikes in Singapore.

 

 

Few things are impossible - it's all in the mind. To illustrate:

• Ever seen an opposition party take control of Singapore's Parliament before, against the establishment of the day? It happened in 1959 when the PAP took power.
  
• Ever seen the PAP with a massive majority in Parliament suffer a split, a strong opposing political forces? It happened in 1961.
  
• Ever seen real estate prices in Singapore fall over a sustained period before? Real estate prices in Singapore sank significantly from 2000-2004. 1 in every 7 homes was was worth less than the mortgages. HDB was selling new flats significantly less than what other owners bought from HDB 5 years ago.
  

Edited November 4, 2009 by contrarian

[claudia-81]

THE ELECTION IS COMING....

is really the best time for the public to vote for the opposition parties..regarless whether it will win or not? least, like last few years news, the vote for opposition parties goes up very high, may this year better. i personally will vote for the opposition parties to shown my unhappiness in these recent years how the government handle the public assets and poor benefits... especially on our cpf and HDB issue, controlling our fund. freedom of speechz? but ever can we voice out? this the only best time in election that the public can voice out by vote! dont be timid anymore, there is nothing revelant or effect your curerent job even you are a government servant it dont reall matters. as as checked, this a open and safe personal vote, dont concern any issue. we are not those anuntie and uncle times anymore..we ought to do something or when gst 30% time or hdb seliing at a million for a unit time, will be too late... NEW GENERATION BRAVE UP AND VOTE!

 

p/s: anyone vote for p@p? or opposition parties?

[hydrop]

Only a few years ago in 2005, there where so many excess HDB flats around in Sengkang, bukit panjang, jurong west and punggol....brand new 4 room flat below 200k, 5 room flat below 250k and exec flat below 300k. Look at now....everything almost X2.....

[cougar]

You aren't old enough to have seen strikes in Singapore.

 

 

Few things are impossible - it's all in the mind. To illustrate:

Ever seen real estate prices in Singapore fall over a sustained period before? Real estate prices in Singapore sank significantly from 2000-2004. 1 in every 7 homes was was worth less than the mortgages. HDB was selling new flats significantly less than what other owners bought from HDB 5 years ago.

 

This is very interesting and well informed facts you digged out. Prior to 2000-2004 HDB prices were all time high before the dipped, hopefully we can see the same this time round, though i doubt the impact is as before. But i think cash rich buyers will eventually dry up, nothing lasts forever.

[claudia-81]

hai... so sad... owning a hdb is very high cost now... will plan to migrate..

there is why, nowdays alot of singaporeans keep buying houses at indonesia and malaysia. as singapore really going to be a very high living country.SO WHAT THE COUNTRY KEEP UPGRADE AND MORE INTERESTS..but singaporeans are suffering, always awaiting salary to pay this and that. MORE or less, all the contributions for the government investments are from us.. invest bank better, high dividens, not high taxs. taking some governement dividen maybe 1 per year or 2 but pay the taxes and +++ within a month... we all KNOW MATHS!.. MAY THE GOVERNMENT make a research throughly to knew the public deep hearts. before singapore a country that only left with 30%singaporean the others are scatter oversea to survive.

[curiously always]

yes i agree .. day by day more foreigners r coming in .. there r good n bad lor with them coming in though .. ya,i tot of migrating too ... maybe in australia or something there ... i'm looking into logistics feild as i'm in it now .. haiz ... singapore cannot tahan lah ... everything go up .. salary never go up ...

[contrarian]

This is very interesting and well informed facts you digged out. Prior to 2000-2004 HDB prices were all time high before the dipped, hopefully we can see the same this time round, though i doubt the impact is as before. But i think cash rich buyers will eventually dry up, nothing lasts forever.

 

They're not going to make the same mistake so easily. The last round was caused by a combination of factors - economic downtown, reduced CPF contribution rates, total population stagnating over a few years, 17,000 unsold surplus HDB flats.

 

It's relatively easy to recreate the last dip - build 20,000 HDB flats a year for 3 years - but Mah Bow Tan chose a different approach which is to focus on BTO and build only when there is demand. This will ensure that the supply side isn't the factor that causes the price to sink. It's now left to the demand side to cause price changes.

[kzone]

hai... so sad... owning a hdb is very high cost now... will plan to migrate..

buy hdb, rent out then migrate? or just migrate without buying hdb?

 

 

contrarian, very insightful posts u've made. really enjoyed reading them & opened my eyes quite abit...

 

since price level is essentially the equilibrium of demand & supply, then demand side alone cannot influence price in the mid/long term horizon rite? So do you foresee that corrections in price will only be a short term effect on the resale market?

 

For those that are planning to get married, better plan early and apply for BTO projects rather than resale.. leave the resale to the PRs

 

I bought a new flat some years back, intend to rent it out after 5 years and sell it after 10yrs to PRs then buy new flat again... repeat the cycle till death.. what do u think of this? Viable?

Edited November 10, 2009 by kzone

[hachi]

This is very interesting and well informed facts you digged out. Prior to 2000-2004 HDB prices were all time high before the dipped, hopefully we can see the same this time round, though i doubt the impact is as before. But i think cash rich buyers will eventually dry up, nothing lasts forever.

Interesting....I believe is a 10 years vicious cycle...Compare to 1997 no one knew that properties would dip.....remember the good years of COE costing 50k or more...

Those who can wait I suggest wait for 2-3 years...This should be the highest point now as any higher normal peasant cannot afford HDB any more unless there is a large change in grant.

If you ask me will it get any higher....NO cos any higher there will be a uproar and this is the last thing that gov wants.

Election should be interesting....If it is coming soon. Well we learned from our mistakes....

So the 66.6% pls dont do it again.hee hee

[hachi]

yes i agree .. day by day more foreigners r coming in .. there r good n bad lor with them coming in though .. ya,i tot of migrating too ... maybe in australia or something there ... i'm looking into logistics feild as i'm in it now .. haiz ... singapore cannot tahan lah ... everything go up .. salary never go up ...

I used to think FT fights jobs with SGreans.... But you have to look at big pictures...How many more jobs they created? Let's not talk about expat rather than low cost workers.

In order to stay competitive, we need to lower the cost of hiring. That's where they comes in.

Yes when comes to housing, I believe MBT can do it better. Maybe is time to change. Building more flats to cool the market is a no brainer.

Even building BTOs should cools the market a bit as buyers with waiting potential can book BTO, in that way the influx of buyers should dip leaving more supply than demand in the market....This should cools the market to a more reasonable level.

They can site for private housing but cannot building more BTOs. It boils down to $$$ again. Hiaz/....

[kzone]

Those who can wait I suggest wait for 2-3 years...This should be the highest point now as any higher normal peasant cannot afford HDB any more unless there is a large change in grant.

 

u referring to resale hdb or BTOs? resale r bught by PRs n demand will continue to be strong long term. If they decide to leave the ctry, selling will have minimal losses (likely to be profit actually)...their other alternative is to rent which is a sure loss anyway..

 

 

They also dont mind paying high COV cos the mthly payment is covered by CPFs. Its like buying house with paying only the COV & down. In their home country, they need to fork out cash to pay so HDB housing is still affordable to them especially since many view the $$ spent as savings/investment which can be unlocked when they sell it away.

[contrarian]

since price level is essentially the equilibrium of demand & supply, then demand side alone cannot influence price in the mid/long term horizon rite? So do you foresee that corrections in price will only be a short term effect on the resale market?

 

For those that are planning to get married, better plan early and apply for BTO projects rather than resale.. leave the resale to the PRs

 

I bought a new flat some years back, intend to rent it out after 5 years and sell it after 10yrs to PRs then buy new flat again... repeat the cycle till death.. what do u think of this? Viable?

 

As you rightly point out, the equilibrium price is the balance of supply and demand at that point in time.

 

On the supply side, MND and HDB have unfortunately overreacted to the 2000 situation when HDB had 17,000 unsold flats that took them about 7 years to clear. Arising from that experience, they became too conservative and will only build when there is demand first - which I disagree with because of the long lead time to finish the construction.

 

There's no telling what happens to demand at any future point in time. What I can say is that it fluctuates at different points in time and that's why there are cycles. Tip: take the advice of "experts" on the real estate market with some skepticism. When cycles will happen and how long they will last, no one knows until after they have happened.

 

Potential changes in future demand could come from:

1. As the resident population ages and the population falls, there will be an increase in supply from their flats.

2. And you can never discount the effect of suddenly a lot of the foreign population leave Singapore in a short period (because of unexpected events like disease, disaster, the like).

 

When you sell your first flat that you bought direct from HDB, when you buy a second flat from HDB you will have to pay a resale levy under the current rules. The levy is to minimise the effect of Singaporeans getting the housing subsidy for new flats more than once. Unless the rules change, your proposed strategy might not work out as you plan.

[kzone]

Potential changes in future demand could come from:

1. As the resident population ages and the population falls, there will be an increase in supply from their flats.

2. And you can never discount the effect of suddenly a lot of the foreign population leave Singapore in a short period (because of unexpected events like disease, disaster, the like).

 

When you sell your first flat that you bought direct from HDB, when you buy a second flat from HDB you will have to pay a resale levy under the current rules. The levy is to minimise the effect of Singaporeans getting the housing subsidy for new flats more than once. Unless the rules change, your proposed strategy might not work out as you plan.

 

Thanks for highlighting. Scenario 2 seems like a sure thing, the question is only when...

 

Just checked out the levies on HDB website, a hefty 45K for 5 room flat. I guess, whether this is worth it will depend on resale prices at that time..

 

Wats ur profession? If in property, can u advise me the feasibility & difficultices of being an agent on a part time basis? I'm now concerned abt being an employee and trying to start something part time soon and eventually doing full time later... I'm 31 now...

[contrarian]

Wats ur profession? If in property, can u advise me the feasibility & difficultices of being an agent on a part time basis? I'm now concerned abt being an employee and trying to start something part time soon and eventually doing full time later... I'm 31 now...

 

I'm not in the real estate business. However, if I might still say a few words on the matter:

 

1. This business can be financially rewarding. As with any sales job, it may look to be highly lucrative when you hear all the success stories. Beware - as with any commission or sales job (whether it's selling insurance, stocks, or anything else), the top 15% will always do very well, but the others are generally struggling or at best making a reasonable living. Don't over-generalise from the highly successful ones and assume all will be fabulously rich.

 

2. You need cash flow. Real estate sales take months to complete and all kinds of hazards crop up to prevent or delay completion (e.g. seller is bankrupt, one of the sellers die before completion, buyers cannot get the loan, etc.). Even if you make sales, you have to wait to get your money. Hint - if you do rentals, these transactions conclude much faster and tenants are far less fussy than buyers. Use the leases to generate cash flow for you while you handle the other sales.

 

3. The business is not easy as there are all kinds of characters - sellers, buyers, other agents, and more. Be prepared for some customers who decide they may not want to pay you, or not in full. Be prepared for other agents who refuse to co-broke, or may not want to pay you a half-share for co-broking.

 

4. Very shortly, new measures will come in to regulate real estate agents (http://www.mnd.gov.sg/RealEstateReview/pdf/RealEstateReview-PublicConsultationPaper.pdf). This is a good thing as it will help to control some of the behaviour. Good agents will benefit from the enhanced regulation. Don't let yourself be tempted into unscrupulous behaviour unless you know and are prepared for the consequences.

[cougar]

I'm not

4. Very shortly, new measures will come in to regulate real estate agents (http://www.mnd.gov.sg/RealEstateReview/pdf/RealEstateReview-PublicConsultationPaper.pdf). This is a good thing as it will help to control some of the behaviour. Good agents will benefit from the enhanced regulation. Don't let yourself be tempted into unscrupulous behaviour unless you know and are prepared for the consequences.

 

Yes, i also contributed, gave them a piece of my mind, unscrupulous agents.