HDB flat prices up (record high)

[Galantspeedz]

In an indirect way. Pricing of new HDB flats are loosly based on market pricing of resale properties. High resale value give them "excuses" to price higher, which results in higher margins. Then there's also other things like stamp fees, mortgage interests for which there's a positive correlation with price.

 

In short, there's not much to loose for the Govt when property prices are booming, and lots for everybody (including HDB flat owners) when prices drops.

 

Also, there are increasing numbers of HDB flats financed by banks (not HDB). And when prices drops drastically, there's nothing to say the banks will not call the mortgagees and ask them to top up the difference in cash. Once such a thing happen, the snowball effect would be unthinkable.

 

My take is, as long as prices increases gradually and not far outpace economic growth and inflation, then it's healthy. If it drops, it's nothing but trouble. For forummers calling for a drop in HDB prices, do be very careful what you wish for, because you really don't know what you are asking for. It's like asking for the devil to cure your headache, and in return he gives you a brain tumour.

 

 

i agree with what you say as explained in previous few posts.

 

the point is the snowball effect.......... which alot people fail to see and wish for lower prices.... they only look at $$$ rather than the full picture....... short-sighted i would say...

[Liuz0004]

actually none of us will know for sure how much is the cost value of a block of flats only the average cost.

 

http://en.wikipedia.org/wiki/Housing_and_Development_Board

 

look at the increase throughout the years, it doesnt match with inflation and our salary

 

eg. a block of 3rm flats. each are sold at $150k brand new, NG 67sqm. one block 200 units for instance, total sale is $30million. by any standards today, i doubt the cost price is $30million.

 

can anyone verify?

[Galantspeedz]

actually none of us will know for sure how much is the cost value of a block of flats only the average cost.

 

http://en.wikipedia.org/wiki/Housing_and_Development_Board

 

look at the increase throughout the years, it doesnt match with inflation and our salary

 

eg. a block of 3rm flats. each are sold at $150k brand new, NG 67sqm. one block 200 units for instance, total sale is $30million. by any standards today, i doubt the cost price is $30million.

 

can anyone verify?

 

i believe we should also take into consideration the land cost.. i.e the opportunity cost of using the land for HDB flat..

[Liuz0004]

good point. opportunity cost of land.

 

i missed the recent BTO telok blangah towers. 4rm at $280k.

[Yeshe]

but you do not forget about inflation...... materials cost more too... i am not saying HDB dun earn but though prices is higher it does not necessarily mean there is the same increase in profits (if any)

 

yes stamp duty is based on transaction price.... so what is the difference between lets say a 300k and a 400k flat, difference is 2.6k? one thing you all may have overlooked which i find reasonable is... compared to last time, your pay have increased..... so must the civil service pay.........

 

as to how much a 100sqm HDB place cost... till now there are those going for 200+k.... so why must we use 400k as a reference? And also can you tell me then how much it takes to build a 100sqm flat or should i say a block of flats?

 

i was using 100sqm as an example. in 1970s, a 4rm HDB apt can cost about 10-20k? over 40 years, the price has went up 20folds and thats the selling price, not the cost. Even if u cmopare the new flats in new estates, they are going at 200K+ for 100sqm. Doing a quick calculation, HDB will take in $40million for a 200 unit flat. quick thinking, does a flat cost that much to build? maybe someone from construction industry can advise

[Yeshe]

good point. opportunity cost of land.

 

i missed the recent BTO telok blangah towers. 4rm at $280k.

 

wat is the opportunity cost of land in pungol or sengkang?

[Galantspeedz]

i was using 100sqm as an example. in 1970s, a 4rm HDB apt can cost about 10-20k? over 40 years, the price has went up 20folds and thats the selling price, not the cost. Even if u cmopare the new flats in new estates, they are going at 200K+ for 100sqm. Doing a quick calculation, HDB will take in $40million for a 200 unit flat. quick thinking, does a flat cost that much to build? maybe someone from construction industry can advise

 

 

there are a few reasons i can think of, inflation, boost in economy, rise in population..... less raw materials available, etc....

[Liuz0004]

well, u never know. the twenty one going on with very rosy pictures painted to us will appreciate land value, maybe. :lol:

[Liuz0004]

there are a few reasons i can think of, inflation, boost in economy, rise in population..... less raw materials available, etc....

 

while i understand where you are coming from, these reasons do not justify the increase in prices.

 

the only reason is market forces. resale prices increase. new flat prices have to follow suit and cannot stay put by selling at cost price.

 

if u buy at cost price, 5 yrs later u sell and earn $200k. erm.. if u can earn $200k, why not the gov earn some of it first?

[Galantspeedz]

while i understand where you are coming from, these reasons do not justify the increase in prices.

 

the only reason is market forces. resale prices increase. new flat prices have to follow suit and cannot stay put by selling at cost price.

 

if u buy at cost price, 5 yrs later u sell and earn $200k. erm.. if u can earn $200k, why not the gov earn some of it first?

 

 

eh.... actually i think it work in tendem.... both new flats and resale flats...... which ever is lower will be more in demand thus to sustain 1 side of it... the other has to also be around that range....

[Liuz0004]

but the prices of new flats are still lower than resale flats.

 

so in order to encourage first timer to buy resale flats, they are given $30k grant.

 

$10k grant is still valid for both new and resale.

 

 

[Liuz0004]

and btw, after receiving the $30k grant for buying resale flat, should you plan to buy a new BTO flat, that $30k grant has to be returned as cash hor. dun pray pray

[Galantspeedz]

but the prices of new flats are still lower than resale flats.

 

so in order to encourage first timer to buy resale flats, they are given $30k grant.

 

$10k grant is still valid for both new and resale.

 

 

Actually i did a comparsion before i bought my flat.... after the $30k grant... the prices are almost the same... taking into consideration resale one already reno and HDB one is bare. I talking about east side, not familier with north,south and west area. The main difference between the 2 flats is the age.

 

the $10k is for staying near parents, which means if your parents want to sell their flat, they can still do so but have to remain within the 2km (If i rem correctly the distance)

Edited July 27, 2009 by Galantspeedz

[Galantspeedz]

and btw, after receiving the $30k grant for buying resale flat, should you plan to buy a new BTO flat, that $30k grant has to be returned as cash hor. dun pray pray

 

I think is reasonable.... you have only 1 chance at the grant.... why should you have more chances..... and you can always buy resale....

[Rainman]

Back in 2005, I opted for BTO, spend 2-3 trips down to HDB, paid the booking fee, specially took leave to select the level i want, in the end the BTO was cancelled and HDB merely refund me the booking fee.

 

In the end have to choose resale flats as all other areas are mostly chinese quota full. I was also given the choice to purchase new flats around Little India.

 

I'm now staying 20 yo flat, no lift level and open carpark, the plus points are it's more lively and nearby have all the necessary amneities like polyclinic, sports complex, malls, markets, Singapore pool etc.

 

i dumped in quite some cash to renovate the whole flat, so may not be good or feasible for some, on the other hand I have more sqm and a useless squarish shaped living room.

[Vextan]

just to share, over the weekend i went to a friend's house for baby one month party. the house is a one year old hdb 4 room flat at buangkok.

 

this is the first time i see a basement car park for hdb flats. the car park is under a few blocks, and so can drive to below the block and take the lift up. i was impressed by this design as i thought only private condo then has this feature.

 

also, the surrounding was quite nice and it was surprisingly windy. the 4rm flat was quite small though.

Edited July 27, 2009 by Vextan

[Veryfree]

based on what you say, the prices of HDB should go down instead of go up.. while private should go up instead of go down..... demand and supply.... no?

Today, SG population is 4.84million, target is 6 million. our MM said 5 million is realistic.

so, PRs are fast filling up the gap.

 

But, who are these PRs/FTs? what profession? Who will pay long term mortgage loan?

Is the interest rate remaining so low, what happen if "so called" economy

turns better?

 

Many questions. Best is live within our means.

[Ngck]

In an indirect way. Pricing of new HDB flats are loosly based on market pricing of resale properties. High resale value give them "excuses" to price higher, which results in higher margins. Then there's also other things like stamp fees, mortgage interests for which there's a positive correlation with price.

 

In short, there's not much to loose for the Govt when property prices are booming, and lots for everybody (including HDB flat owners) when prices drops.

 

Also, there are increasing numbers of HDB flats financed by banks (not HDB). And when prices drops drastically, there's nothing to say the banks will not call the mortgagees and ask them to top up the difference in cash. Once such a thing happen, the snowball effect would be unthinkable.

 

My take is, as long as prices increases gradually and not far outpace economic growth and inflation, then it's healthy. If it drops, it's nothing but trouble. For forummers calling for a drop in HDB prices, do be very careful what you wish for, because you really don't know what you are asking for. It's like asking for the devil to cure your headache, and in return he gives you a brain tumour.

 

 

some of the poor (i stress again, not jobless) people are already being left behind,

 

HDB prices rise but bottom 20% workers pay never rise . The pace is unhealthy due to large amounts of FT flooding the market