No subsidy in HDB, just a discount
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FROM the letter by the Housing Board's Ms Kee Lay Cheng ('How prices of new HDB flats arrived at'; ST, Nov 17), it would appear that new flats that are sold are not subsidised.
Ms Kee said that 'new HDB flats are... priced below their equivalent market values so that buyers enjoy a substantial market subsidy' - that is, they are sold at prices lower than those sold in the open market.
In fact, there is no such thing as 'market subsidy'. If a flat's price in the open market is $400,000 and the seller reduces it to, say, $350,000, he is giving a discount and not a subsidy. Likewise, if the HDB sells its flats at $350,000 each, it is giving a discount to what similar flats can fetch in the open market.
A subsidy is the difference between the cost of a product or service and the reduced price at which the product or service is sold or provided, the difference being absorbed by the Government to make the product or service available to those who may not otherwise be able to afford it.
Thus, if it costs $200,000 to build each flat (land cost + construction cost + consultants' fees and other incidentals) and they are sold at $150,000, then the HDB is giving a subsidy of $50,000. On the other hand, if it sells the flats at, say, $350,000, it is in fact making a profit of $150,000, even though it may be giving a discount of $50,000 to the market price.
The flats in Queenstown that are close to the MRT station were constructed after demolishing low- and medium-rise blocks that were constructed during the early 1960s. The land on which they stood was acquired at very low cost. Even allowing for inflation, the final costs of the flats cannot be the prices now quoted by the HDB. At these prices, the flats are not subsidised.
To say they are sold at these prices because they are near the MRT station is to place a value on them and not their cost. It would have been far better had the HDB said that, because the flats are located close to amenities, they will not be subsidised, but will be sold at cost or even at a small profit to subsidise flats that are not so well located.
Cheong Chee Mun
The power of creative accounting - this is the what you call "wu zhong shen you" (36 strategies) giving you without you receiving it. excellent strategy -
now, people start to understand the creative accounting and why it is said that HDB is a cash cow for the gabrament
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how can there be a subsidy when the flat sold is so much high than cost of building it.
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HDB Corp is bought over by Tomasick.....it is going on profit steering to ensure good returns and rewarding to its officials.Originally posted by LinYu:FROM the letter by the Housing Board's Ms Kee Lay Cheng ('How prices of new HDB flats arrived at'; ST, Nov 17), it would appear that new flats that are sold are not subsidised.
Ms Kee said that 'new HDB flats are... priced below their equivalent market values so that buyers enjoy a substantial market subsidy' - that is, they are sold at prices lower than those sold in the open market.
In fact, there is no such thing as 'market subsidy'. If a flat's price in the open market is $400,000 and the seller reduces it to, say, $350,000, he is giving a discount and not a subsidy. Likewise, if the HDB sells its flats at $350,000 each, it is giving a discount to what similar flats can fetch in the open market.
A subsidy is the difference between the cost of a product or service and the reduced price at which the product or service is sold or provided, the difference being absorbed by the Government to make the product or service available to those who may not otherwise be able to afford it.
Thus, if it costs $200,000 to build each flat (land cost + construction cost + consultants' fees and other incidentals) and they are sold at $150,000, then the HDB is giving a subsidy of $50,000. On the other hand, if it sells the flats at, say, $350,000, it is in fact making a profit of $150,000, even though it may be giving a discount of $50,000 to the market price.
The flats in Queenstown that are close to the MRT station were constructed after demolishing low- and medium-rise blocks that were constructed during the early 1960s. The land on which they stood was acquired at very low cost. Even allowing for inflation, the final costs of the flats cannot be the prices now quoted by the HDB. At these prices, the flats are not subsidised.
To say they are sold at these prices because they are near the MRT station is to place a value on them and not their cost. It would have been far better had the HDB said that, because the flats are located close to amenities, they will not be subsidised, but will be sold at cost or even at a small profit to subsidise flats that are not so well located.
Cheong Chee Mun
The power of creative accounting - this is the what you call "wu zhong shen you" (36 strategies) giving you without you receiving it. excellent strategy
We are Singaporeans...born and served our NS here. Today, I'm very very very upset and annoying that I don't even deserve a place to live in our so call ''home''with genuine subsidy!!!
I ready ready hate it!!!!!!!! -
What next?
HDB will come up with a standard template reply stating they are committed to providing low cost public housing to the people blah blah blah.
End of matter.
Case closed.
So what are you gonna do about it? -
its only a matter time before people start 'waking up' and learn the uncanny truth to the state s'pore is in and where it is heading...
with the internet for other alternative media sources and truth, more and more people will find out the inevitable truth that there is more to just black and white.. -
i don't think so. given that most people can only afford a HDB (using CPF) no one is going to bother.Originally posted by 4getmenot:its only a matter time before people start 'waking up' and learn the uncanny truth to the state s'pore is in and where it is heading...
with the internet for other alternative media sources and truth, more and more people will find out the inevitable truth that there is more to just black and white.. -
Brown Sundays!Originally posted by charlize:What next?
HDB will come up with a standard template reply stating they are committed to providing low cost public housing to the people blah blah blah.
End of matter.
Case closed.
So what are you gonna do about it? -
"There is no free lunch" so what else can we do ????
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pack bag and leave. why contribute to the singaporean economy?
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As far as i can remember, in the 80s, subsequent to the opp's query, the gahment was unable to ascertain the amount of 'real dollar' subsidized per unit. After some streamlining process, they managed to cover those patches and it appeared to be transparent
From a start, SLA sold land to HDB at a higher land price - I wonder what is the benchmark ? Benchmark from the private sector's land sale ?? SLA sold the land, made profit from it (1st tier of profit). HDB took over and developed it using market billable rate - assuming HDB Engr based cost is $30/hr... book billable rate $110/hr & bank lending rate at 6% etc (2nd Tier of profit). Hence on paper, HDB may/may not suffer book losses.
Firstly, the SLA was created only in 2001. So, in the 80s, if you recall, most of the land sales were done by the URA. As a side note, even I don't know why the SLA was created, as they have the same goals and objectives as the URA. The URA sells to private and commercial developers, while the SLA sells to stat boards, and also private. Just another whole new bureaucracy created to feed PAPpy peons at the public trough.
Anyway, if you are talking about the benchmark, than the only true benchmark that you can use is what the govt. actually paid for the land. Not what they say is the "market value" . So for example, if the URA exercises the Land Acquisition Act and buys your grandfathers durian plantation for what he paid 40 years ago, he will get maybe $100 PSM if he is lucky. URA rezones it, does the soil studies, and surveys, and sells the land by tender to a developer for $4000 PSM. The URA and SLA will now claim the market price is $4000 PSM. And this is the price that HDB claims it got its land at. We all know its bullshit, and this cow Kee Lay Cheng can't seem to understand it.The benchmark to be used is $100 PSM. U are right, this is the 1st Tier of profit.
Further profit is made by added on construction value. The sum of cost of construction including financing costs, materials, labour, architecture, etc. is only 50% or less of what they charge the peasants.
The largest profit is made by denying the peasants the ownership of the land. HDB claims to have paid market value for the land, but they are not passing ownership of the land to the flat buyer. So, in 99 years, they get the flat back for free, along with the underlying land. The prepay lease (what the buyer paid for his flat) is 100% profit to them.
Than they make more money by earning interest on the prepaid rent that you had to borrow from them. They make additional money by forcing you to take upgrades or pay for the repairs of their shoddy products. And before the 99 years is up, they wil force you to relocate to a new estate and pay even more.
Finally, Lee and Lee make their own money by doing the conveyancing for the flats. -
Abusive Mathematics! -
As a professional QS, the construction cost is S$ 110 per sq feet. but I dont know the land cost but I believe is less than S$ 10 per square feet ,the gov pays 2 acquire the land the divide by ???? households unit is become )))) nil, we r pay more to this sg gov at S@)) -
And to top it all off, the HDB flat you pay half your life away for is still going to go back to the government after 99 years!! Now THAT.... is what I call exploiting the poorer citizens!
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Nobody force you to buy HDB flats ma...
You all go ahead and buy Condo the govt also not going to put you in jail.
If govt is going to give me discount to buy flat, then I sure take the discount. Got discount take better than no discount. I is not rich one. -
it's a scheme to lock u down to singapore with ur money. they dun tax u openly but 20% of the money gets taken away every month actually.Originally posted by LinYu:i don't think so. given that most people can only afford a HDB (using CPF) no one is going to bother.
and most dun see the money coming back to them simply cos they cannot meet the increasing minimum sum to push the bar higher.
competitive tax rate? my foot! -
As Said: ABUSIVE MATHEMATICS -
The issue is not whether 2 buy HDB flats or not but pls dont cheat us we r not the fools 2 let u play ard with figures!!!
I m living in a condominium but this is besides a point!! Understand!!!!! -
Discount? I think that bloody murder.. to think i had bought a flat from HDB. I not rich anyway.
I always think SG houses is too expensive.
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Here's another potshot at Ms Kee:
Deficit in HDB flat sales a paper loss to Govt
I REFER to the reply from the Housing Board's Ms Kee Lay Cheng, 'HDB consistently incurs losses selling new flats' (ST, Dec
.
Ms Kee took the stand that HDB did not acquire land at a very low cost. However, she failed to note that since the 1970s, the Government had indeed acquired land at very low cost under the Land Acquisition Act.
She then informed us that the Singapore Land Authority (SLA), a government agency, sold the low-cost land at a value determined by the Chief Valuer, another government body, to HDB, yet another government agency. This inter-government agency sale certainly ramped up the total development cost for HDB.
As the vendor and purchaser are related, the transaction is a zero-sum game to the Government's bottom line because HDB's liability matches SLA's gain. Hence, I see the deficit in HDB's sale-of-flats account as an internal 'paper loss'' to the Government, not a tangible cost.
However, I concur that CPF housing grants are a tangible cost.
Ms Kee merely stated that the total development cost of an HDB flat is higher than $200,000 and disputed the deduced profit of $150,000. However, no figures were provided.
Why can't Ms Kee reveal the true land cost, construction cost, consultants' fees and other incidentals in the building of a typical flat?
Steven Lo Chock Fei
ST Forum
HDB is running out of excuses and red herrings.... -
This is precisely why the ruling party will be afraid of full-fledged accountants joining the ranks of the alternatives.
I've said this before: we are sorely lacking in a quality accountant capable of poking considerable holes in the accounting practices of stat boards. At the moment, the difficulty faced is the inability to tear the accounting statistics of HDB to shreds, point out the gaping discrepancies in their accounts and exploit it to the max to embarrass this govt body.
The fact that HDB flats costs as much as they do is purely a LACK of REAL subsidy rather than intangible handouts in the form of CPF grants and loans with favourable interest rates.
While the intention is probably to allow Singaporeans to have ownership over their property, at what cost does it come at? Are we to remain in debt for the better portion of 15-20 years to pay back the full balance of the loans, while exhausting our own CPF and retirement savings in the process? -
Isn't it the same with healthcare here?Originally posted by BillyBong:This is precisely why the ruling party will be afraid of full-fledged accountants joining the ranks of the alternatives.
I've said this before: we are sorely lacking in a quality accountant capable of poking considerable holes in the accounting practices of stat boards. At the moment, the difficulty faced is the inability to tear the accounting statistics of HDB to shreds, point out the gaping discrepancies in their accounts and exploit it to the max to embarrass this govt body.
The fact that HDB flats costs as much as they do is purely a LACK of REAL subsidy rather than intangible handouts in the form of CPF grants and loans with favourable interest rates.
While the intention is probably to allow Singaporeans to have ownership over their property, at what cost does it come at? Are we to remain in debt for the better portion of 15-20 years to pay back the full balance of the loans, while exhausting our own CPF and retirement savings in the process?
No? -
We have cold and thirsty blood sucking vampires govt with dirty accounting to corner the peasants.
If I have a property say ..a warehouse under a registed company Silly Land Atomic.
I register another company call Peanut & Durain Corporation.
I rent the warehouse to Peanut &Durain Trading Corporation at 600K a month....
Of course what I will do is......
1) Silly Land Atomic organisation will consist of my grandfather, grandmother, father, mother, dear wife, uncles, aunties, brothers, sisters or maybe sons or daughters and many other balls carriers who will be drawing superb high salaries, director fees, perks, dividends and etc.
2)Peanut & Durain Corporation will of course report loss every quarter loh... -
Just tell us how much the sg gov paid 4 the land cost in Puggol in the first instance!!!!S$10 per sq m!!!!this is the amount the bloody gov paid 4 my grand father's land at Puggol in the 1970s!!!! shti u!!!
F this sg gov!!!! trying 2 cheat us with this creative acctg!!!!! -
Land cost is just BS.Originally posted by foomwee88:Just tell us how much the sg gov paid 4 the land cost in Puggol in the first instance!!!!S$10 per sq m!!!!this is the amount the bloody gov paid 4 my grand father's land at Puggol in the 1970s!!!! shti u!!!
F this sg gov!!!! trying 2 cheat us with this creative acctg!!!!!
Why not the government sell Ang Mo Kio to private developer and see how many of us can afford to buy those Pte Apt/Condo.
Also, don't forget you are just leasing it from HDB for 99 years. A Private Freehold Condo do not cost 100 times more!
We are the carrot head!!