why hdb so expensive
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Somewhere along the lline, our system of government got changed.
Government's principal dutes and responsibilities include (a) creating jobs, (b) housing, (c) education, (d) security and (e) medical needs etc as contained in parties' manifestos and election campaigning speeches.
Due to limitations caused by our own unique one-party system, we must have forgotten these prestine duties and responsibilities to the people. Over time, our economy is now run so as to be be efficient, be rich, build reserves etc resulting in high costs.
There is no careful examination of how government charges for lands or services. The argument that land costs is chargeable has to be re-examined in this light. Lands were acquired by government cheaply or at little costs under Land Acquisition Act. It does not need to amortize lands like the private landlords. Charge the highest rates for commercial usage by all means. But where the people or tax payers are concerned lands have been paid for using tax payers' monies. Charging land rentals for hospitals, utilities and other essential services needs re-thinking to avoid a double-charge somewhere.
If Singapore is to become competitive again, the first thing to do now is to debate openly on such major policy decisions. Right or wrong, such policies must be agreed upon before anything else will work.
If government wants to be competitive and efficient, it is necessary to resolve all such issues with people before levying near-market (called subsidised) prices for housing and essential services. More ideas of others are necessary to make for change.
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hear from my friend....he is saying even if we manage to settle all the money for our hdb flat...in the contact it stated...the govement lense to us..instead..of us owning..it..if this is true than this is totally amusing..paying such a huge amount for what sia? like that.
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It is true. The HDB is on 99 years leasehold. The flat will not be yours after 99 years. So, don't bet on inheriting a HDB flat, chances are you will be chased out of the flat before you die.Originally posted by zheshi:hear from my friend....he is saying even if we manage to settle all the money for our hdb flat...in the contact it stated...the govement lense to us..instead..of us owning..it..if this is true than this is totally amusing..paying such a huge amount for what sia? like that. -
Originally posted by miong:
I think you are trying to mislead the audience here by quoting the above article. Yes price of flats rose faster then that of wages then but a lot of people were in fact very happy. Why ? Because the value of their flat was raising.
"..The letter, "How does HDB prices it's flats?" (ST July 12) has only accentuated my bewilderment at the way HDB flat prices have inflated over the past decade as a result of presumably uncontrollable market forces.
Beginning with an index of [b]41.8 in 1993, the HDB resale-price indexs has escalated to 105.2 in the second quarter of this year, according to the latest flash estimate (source: HDB website)> This represent an increase of 152 %.
In contrast, the average monthly nominal earnings per employee in Singapore had increased only 68 % from $1918 in 1993 to $3213 in 2003 (MOM website).
Hence, the rate of HDB resale-price inflation is more than double that of wage increment over this period of time. This living cost-to-income disparity is magnified when the effective long-term housing-loan interest rate is taken into consideration...
(Quote ST Forum 23/7/04)[/b]
Some of these people proceed to sell their flat and got a windfall as a result. Why ? Because of the price difference between the buying price from HDB and the price the flat was sold in the open market.
What did these people do with the money ? Some people upgrade to another flat and save the rest of the money for a rainy day. What did the others do ? Buy condo, buy car , buy hi-fi spend everything and take loans. Recession come and these people fall on hard times.
Who fault ? Govt's fault ?
I let the audience decide. -
Only if you decide to sell a flat and not buy another one will you gain from this. Others who need a flat no matter what, or those who have yet to have a flat will lose out. So, I agree with miong.Originally posted by tspg:I think you are trying to mislead the audience here by quoting the above article. Yes price of flats rose faster then that of wages then but a lot of people were in fact very happy. Why ? Because the value of their flat was raising.
Some of these people proceed to sell their flat and got a windfall as a result. Why ? Because of the price difference between the buying price from HDB and the price the flat was sold in the open market.
What did these people do with the money ? Some people upgrade to another flat and save the rest of the money for a rainy day. What did the others do ? Buy condo, buy car , buy hi-fi spend everything and take loans. Recession come and these people fall on hard times.
Who fault ? Govt's fault ?
I let the audience decide.
Housing, being a basic need, needs to be kept affordable (just like food). -
My comments are based on the article. The writer seem to suggest that a rise in price is a bad thing. Thats not entirely the case because there are people who benefit too.Originally posted by Qitai:Only if you decide to sell a flat and not buy another one will you gain from this. Others who need a flat no matter what, or those who have yet to have a flat will lose out. So, I agree with miong.
Housing, being a basic need, needs to be kept affordable (just like food).
I think the question here is the extent of the subsidies. Even if HDB were to sell its flats at $10,000 each, there will still be people who cant afford them, so are we going to accomodate them by selling at $8,000, $5,000 ?
I think one point worth noting is HDB's policy to price new flats below the value of similar ones in the resale market. This means that it is still cheaper to buy direct from HDB.
By pricing new flats too low, it will hurt the majority of current flat owners as it will cause the valuation of their flats to fall. Its a matter of balancing the need between the new flat owners and current owners. -
The issue here is thenOriginally posted by tspg:My comments are based on the article. The writer seem to suggest that a rise in price is a bad thing. Thats not entirely the case because there are people who benefit too.
I think the question here is the extent of the subsidies. Even if HDB were to sell its flats at $10,000 each, there will still be people who cant afford them, so are we going to accomodate them by selling at $8,000, $5,000 ?
I think one point worth noting is HDB's policy to price new flats below the value of similar ones in the resale market. This means that it is still cheaper to buy direct from HDB.
By pricing new flats too low, it will hurt the majority of current flat owners as it will cause the valuation of their flats to fall. Its a matter of balancing the need between the new flat owners and current owners.
(1) Is it right to just price below the market value and claimed to have given a subsidy? Or to price it nearer to the building cost? To a layman, subsidy means they are selling below cost which is not the case.
(2) What to do now (and in future) given they already have people buying at the previous unfair prices? Contninue the same process of letting the price soar and fall illogically (while making their disgusting profit and claimed to have subsidized the flat)?
I like to point out that the property market is not a complete free market due to inability of increasing or decreasing supply flexibly. The pre-text of free market is that both supply and demand can be changed easily. Also, you should not allow a basic necessity to be subjected to market forces, especially when this market force is not one of logical conclusion but of illogical emotions. Can you accept the food or transport prices going up and down all the time? -
airship911 of [email protected] raised some important points which HDB never addressed:-
1. When HDB flats price is not set based on cost but on a household
income afforability based scheme described as:
"HDB flats are priced below their respective market values, to
enable 90% of Singaporeans to afford at least a 3-room flat and 70%
of Singaporeans to afford at least a 4-room flat. Those with higher
income can consider buying the larger HDB flats."
One has to ask what is the justification of such scheme? Why "70%
of Singaporeans to afford at least a 4-room flat"? Why not "80% of
Singaporeans to afford at least a 5-room flat"?
Why the government choose an affordability based pricing scheme
instead of a cost based pricing schem? What is the rationale behind
the decision?
2. Does the government realize that this affordability based scheme
is taking more money than necessary for cost recovery from the
people's savings that they need for children education, medical
care, and retirement?
3. Does the government realize that this affordability based scheme
turn previously well affordable HDB flats into back breaking
financial burden for those hard hit by the economic restructuring
and could not find jobs with the matching pay? -
Both Qitai and Raihanraihan have raised some good points here. Another case of different perception different views different ideas ? I think the pareto principal would apply here.
http://www.nber.org/papers/w9622.pdf
Anyway last post nothing more to add. Thank you.
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As singaporeans, we dun have a choice. Serious. But we have a lot of other things that many ppl in the world dun have. For that i give the Govt credit.
Expensive HDB or not eventually everyone of us have to get one. If not where will u'll stay? 99 yrs lease hold is more than enuff for our generation. I dun see myself living above 120yrs old say why bother. Life still have many other meaningful things for u to live for.
Price of HDB will always go up. It's like inflation. It's reality. Get one as early as u can & work hard to pay off ur loan cos i forsee 20-30 yrs down the road young ppl cannot afford to buy a decent 5-RM HDB flat like in Japan or hONGKONG.
Rich Dad Poor Dad is not a Issue here. Tis is S'pore. Things are different. Life is different. House is different.
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What eric said may make sense except that we are facing a major crisis - high cost of living and doing business and structural unemployment in Singapore.
The basic and fundamental problems appear to be attributable to the manner or formula of charging for government fees and HDB flats. It causes sluggishness of the economy. If by justification and presentation, we continue to pretend there is no problem, we might only postpone solutions and aggravate our problems.
There is a need to address the fundamentals. Fundamentals are determined by policies. If past policies are entrenched and cannot change, what will happen to Singapore? Where are the scholars and talents?