The cause of HDB resale price surge

Calvin86

23 Sep 09, 09:48

http://singaporemind.blogspot.com/2009/09/cause-of-hdb-resale-price-surge.html

The cause of HDB resale price surge....

In my 3 July 2009 blog posting[Link], I wrote:

"In 2008, our population grew by 5.5% to 4.84M[Link] that is an addition of roughly 250,000 people. There were 100,000 newly minted PRs and citizens in 2008 and these people become eligible to buy resale HDB flats. Even in this severe recession demand is up possibly because of new immigrants".

A commenter Kojakbt posted a link to a chart that shows this big surge:

HDB prices its new flats based on the resale market price. The demand for housing, be it rental or purchased homes, has surged due the 400,000 foreigners coming here in the past 3 years. HDB builds 8000 flats a year[Link] and this is insufficient to meet the new demand. I'm not even sure 8000 flats is even enough for Singaporeans getting married and upgraders let alone the big surge in foreigners coming here. It is strange the govt & HDB did not plan for this. Now it spends all its time and effort telling Singaporeans that "HDB flats are still affordable"..... Singaporeans now have to pay more and shoulder higher housing debt because HDB undersupplied the market and the PAP govt chasing after GDP growth allowed in more foreigners than they can house. It is tiresome to listen to the PAP govt trying to talk its way out of this housing mess by denying there is a problem and insisting that 'flats are still affordable'. HDB's idea of affordability is you should downgrade your expectations all the way to a 2 room flat at a location you don't want when previously you could have owned a 3-room flat at a better location.....this is hardly a solution, the govt has simply passed the pain and consequences of its actions and poor planning to ordinary citizens who are already struggling with the high cost of living and facing a declining quality of life here.

http://www.straitstimes.com/ST+Forum/Story/STIStory_425617.html

Undersupply

'Should the HDB build 19,000 flats a year instead?'

MR STEVEN YEO: 'How did the HDB determine that building 8,000 new flats a year is sufficient to meet demand? There are seven applicants for each new flat. For example, there were about 24,000 marriages last year, which means only one-third of newlyweds will get a new flat. The other 16,000 must buy resale or private property. If 80 per cent of the population qualify for subsidised flats, should the HDB build 19,000 flats a year instead?'

Calvin86

23 Sep 09, 09:54

The garmen's and ST view on rising HDB prices

http://business.asiaone.com/Business/My%2BMoney/Property/Story/A1Story20090923-169356.html

Watching HDB price behaviour, sensibly

THERE is a rising pitch of anxiety evident in queries and feedback about HDB housing in recent months. These have centred on affordability mainly, no surprise considering that the sudden spurt in private property prices since July has boosted HDB values, which already were holding better during the recession. Hence, complaints about cash over valuation. Why don't buyers exercise their democratic right to not pay a premium by looking in towns less 'prime'? Home buyers have also touched on policy issues like household income ceiling and the operation of ethnic quotas. National Development Minister Mah Bow Tan addressed most outstanding grouses in a well-timed statement in Parliament last week, but such is the variety of need and the habits of personal preference that assurances would still leave some home-seekers unconvinced.

Affordability is a bugbear, which in turn influences notions of supply relative to demand. Median income and the ratio of household income used for loan service (up to 30 per cent, as a general rule) cited by the minister are indicative of most people's ability to pay, but these are rough guides. In every flat type of up to five rooms and the corresponding price ranges, households which fall below the median income line could progressively be less able to own their homes. That's a lot of families. Financing difficulty can also arise when a family chooses a bigger flat than it can pay for, or needs. There are far too many of these big-is-better purchasers. But this is also where the comprehensiveness of HDB's income-differentiated schemes and the different types of supporting grants available reinforce affordability.

There is little doubt that state housing is affordable, whether new or resale, if one considers carefully precise matching need. The HDB has every conceivable flat type and location to suit every budget. Home seekers create problems for themselves when, as seen, they buy bigger places than they can comfortably finance. They could also be unyielding about wanting to live in 'mature' towns or to be near their parents, for the (selfish?) child-minding convenience. It is an odd mentality that regards only as 'ulu' the new towns which otherwise score heavily in more spacious estate layout and the much nicer, contemporary design of flats. And what of 'distance'? Farthest points on this island are reachable inside an hour by public transport, faster by car. Mr Mah urged buyers to be sensible about making 'trade-offs' between location and price. This newspaper would go further: If they choose to be obstinate about quirks, they should not be hectoring the HDB for impossible concession

citymax

23 Sep 09, 09:55

why transfer the cost to us then...

Calvin86

23 Sep 09, 10:00

Originally posted by citymax:

why transfer the cost to us then...

According to the garmen, the problem is YOU! If you can downgrade your expectation,work and travel further, there is no increase in cost. Why Singaporeans create unnecessary problems for our world class garmen?

citymax

23 Sep 09, 10:04

actualli i downgrade from a 12k job to a 4k job.very bad economy...

deepak.c

23 Sep 09, 10:09

More demand from the newly converted citizens and rentals from foreign talent, population used to be 3 million, now 4.5 million, further down the road will be 6.5 million which is their long term target.

In the future, all MRT trains will ONLY have standing or squating space (i.e. if they intend to make MRT double deckers).

noahnoah

23 Sep 09, 10:14

due to the high cost of housing here

Sometimes also good..

Why?

Because can fetch houses at a higher price

anyway i am going to shift to my cosy ark and

stay..

EarlNeo

23 Sep 09, 10:20

HDB housing no longer consider as low price affortable housing liao....

since they are making atleast 50% profit from each unit of new house they build.....

reason why dun build more is simple....

higher demand then supply = better profit....

who wanna go against their pocket....

deepak.c

23 Sep 09, 10:20

You think park your ark at Marina don't need $$$.

Still have maintenance fees for your ark leh, need people to remove all the barnacles once in a while.

Then what if your animals in the ark decide to have an orgy?

noahnoah

23 Sep 09, 10:22

Originally posted by deepak.c:

You think park your ark at Marina don't need $$$.

Still have maintenance fees for your ark leh, need people to remove all the barnacles once in a while.

Marina not enought space to park my giant ark

le

perhaps might need some space at one of the navy base liao

deepak.c

23 Sep 09, 10:24

I ever thought of building a catamaran, they have websites that sell the plan for catamaran construction. But not sure if I my secondary school wood working skills good enough to construct one.

http://www.multihulls.net.au/Kits-Plans/Spirited-Designs/Designs/

alancia

23 Sep 09, 11:14

Originally posted by citymax:

actualli i downgrade from a 12k job to a 4k job.very bad economy...

what 12k job and what 4k job is that?

So poor thing.

citymax

23 Sep 09, 11:32

Originally posted by alancia:

what 12k job and what 4k job is that?

So poor thing.

Banking

deepak.c

23 Sep 09, 11:48

Should go into oil and petro-chemical now.

I heard the bonuses are insane.

alancia

23 Sep 09, 13:43

Originally posted by citymax:

Banking

Let me guess.

You are a CEO who earns 12k and than you got retrechned and now you are a manager earning 4k

charlize

23 Sep 09, 17:35

I think when confronted with facts and figures from the public, they really cannot answer anything else other than to repeat that "HDB flats are affordable"

Fantagf

23 Sep 09, 18:34

Good for hdb dwellers selling flats n the mercenary ruling party, hahaha

charlize

23 Sep 09, 18:40

Like I mention before.

High prices of HDB flats will not just be an economic problem but a social one.

Not in the future but starting now.

Fantagf

23 Sep 09, 18:42

Some parents already start to worry if their grown up kids can afford buying HDB flats when they grow up. Such pathetic state that the ruling party has put the people into, thank you thunder strike party.

deathmaster

23 Sep 09, 22:15

Originally posted by EarlNeo:

HDB housing no longer consider as low price affortable housing liao....

since they are making atleast 50% profit from each unit of new house they build.....

reason why dun build more is simple....

higher demand then supply = better profit....

who wanna go against their pocket....

haven you heard, indonesian businessmen are already buying huge plots of land in batam, ready to develop them into low cost housing for singaporeans too poor to afford hdb

charlize

23 Sep 09, 22:23

Originally posted by deathmaster:

haven you heard, indonesian businessmen are already buying huge plots of land in batam, ready to develop them into low cost housing for singaporeans too poor to afford hdb

So sad.

Work so hard building up the country and yet have to live the remaining years of your life outside it.

Haiz.

deepak.c

23 Sep 09, 22:26

The other time, MP Khaw asked that we leave our aged parents in Malaysia, very soon, he will be telling those who cannot afford HDB to move to Batam.

charlize

23 Sep 09, 22:29

Originally posted by deepak.c:

The other time, MP Khaw asked that we leave our aged parents in Malaysia, very soon, he will be telling those who cannot afford HDB to move to Batam.

Can you imagine next time.

Old folks in JB. Poor in Batam. Rich stay in Singapore.

deepak.c

23 Sep 09, 22:41

Originally posted by charlize:

Can you imagine next time.

Old folks in JB. Poor in Batam. Rich stay in Singapore.

It's a matter of time.

How else they going to accomodate 6.5 million?

deathmaster

23 Sep 09, 22:44

Originally posted by deepak.c:

It's a matter of time.

How else they going to accomodate 6.5 million?

pulau semakau? :D