Question on Government HDB housing subsidy

[Kiadaw]

I got from a recent report an official statement (TNP page 19 noon edition today) from the government that

 

"HDB set aside new build to order (BTO) flats for first-timers and price them at a substantial subsidy relative to market value..."

 

Note the keywords "Subsidy" & "Market value".

 

 

 

Just for academic seek, & say a 5-room unit cost 100k to build (include all costs), & the market value ( I assume base on resale flat prices) is $500k.

 

Say the subsidy rate of 20%, so the flat is sold at $400k to new buyer.

 

To simplify:

 

Selling price - cost price = $400k-$100k=$300k profit!

 

 

 

How can this be considered subsidy? Maybe its very clear to everyone, but me call simple minded or what, my concept of subsidy is

 

If the unit cost $100K to build, & after 20% subsidy, it was sold at 80k. Yes that I would consider subsidy.

 

 

I am not suggesting that goverment start selling new flat at this rate, as it will surely cost a big burst in property bubble, but should government tell people that our flats are Subsidize? Its quite misleading in my opinion.

 

Its sure sound better than saying they made so & so profit on every unit, but hey.....

 

What are your views, fellow forumers? I am not an expert on property, & Its an honest question.

Edited April 13, 2011 by Kiadaw

[Mustank]

friend, this debate until boring liao. in any case, if you can bto, you reaaly machiam tio beh peo liao! [laugh]

 

where you find 280psf nowadays?

[Joseph22]

This had been what i had been telling the PRO-HDB ppl for very long liao....

 

they cannot see it

[Darryn]

From dictionary.com

 

sub

[Sgnick]

Already 100 threads started over the years on this.

 

Anyway, FYI, it's "Market Subsidy", not "Subsidy". Get it?

 

And FYI, to HDB, that $100K subsidy is their LOST, so HDB loses $100K for every flat they sell. So be grateful to them ok, they lose money to house the population leh.

[Pokyman]

still a subsidy mah ... it was stated subsidy relative to market value, not cost. .... coz you pay 400K instead of 500K should you buy in the resale market. And should the price rose to 800K , and you sell off, you gain 800 - 400 = 400K instead of just 300K if you buy at 500K. .. haha ...

 

And if the govt sell at below cost, or even close to cost, i think almost all HDB owners will jump off the roof leh, prop mkt pit jiak ..... there is no way the govt is going back to cost based pricing lah

[Pokyman]

Already 100 threads started over the years on this.

 

Anyway, FYI, it's "Market Subsidy", not "Subsidy". Get it?

 

And FYI, to HDB, that $100K subsidy is their LOST, so HDB loses $100K for every flat they sell. So be grateful to them ok, they lose money to house the population leh.

 

i think its not loss lah, they just MAKE LESS money .. rofl

[Kiadaw]

Got debated alot of time liao meh. Sorry leh, I caveman, never follow much on property lah.

 

Now comes the time I am looking into new home, so look around for info & stomp on this meh, so quite curious.

[Joseph22]

still a subsidy mah ... it was stated subsidy relative to market value, not cost. .... coz you pay 400K instead of 500K should you buy in the resale market. And should the price rose to 800K , and you sell off, you gain 800 - 400 = 400K instead of just 300K if you buy at 500K. .. haha ...

 

And if the govt sell at below cost, or even close to cost, i think almost all HDB owners will jump off the roof leh, prop mkt pit jiak ..... there is no way the govt is going back to cost based pricing lah

when mah is kick off the podium. you will see that happen.

[Hwt]

If a private sector employee who is getting three million dollars a year enters the cabinet, and is now paid one million, the person is subsidizing the country two million every year......... Subsidy is not good, so these days cabinet members do not have to subsidize the country. :)

Edited April 13, 2011 by Hwt

[Itsec]

Already 100 threads started over the years on this.

 

Anyway, FYI, it's "Market Subsidy", not "Subsidy". Get it?

 

And FYI, to HDB, that $100K subsidy is their LOST, so HDB loses $100K for every flat they sell. So be grateful to them ok, they lose money to house the population leh.

 

 

are u 'c0ck' ?? or brain wash ??

[Darryn]

Already 100 threads started over the years on this.

 

Anyway, FYI, it's "Market Subsidy", not "Subsidy". Get it?

 

And FYI, to HDB, that $100K subsidy is their LOST loss, so HDB loses $100K for every flat they sell. So be grateful to them ok, they lose money to house the population leh.

 

No they don't. The HDB makes a profit on every flat.

 

Nobody, ever, in no definition that I have ever seen describes forgone profits as a loss.

 

So what that they make less than they could have. They are a government agency - they are SUPPOSED to serve the interests of the citizens, not mazimise profits.

[Soya]

friend, this debate until boring liao. in any case, if you can bto, you reaaly machiam tio beh peo liao!

 

where you find 280psf nowadays?

 

 

can. in MCFpore.....oso known as la la land.

 

since ppl still cannot understand the simple term "market subsidy" after all these years, gahmen shld give up explaining n juz turn everything over to the pte developers and let them build everything thru DBSS where it is "market price". then everybody will be happy to pay $600k for a new 4-rm flat as there'll be no arguments on what is meant by "subsidy" anymore.

[Itsec]

FYI

Are we seeing the 'phenomenon'? Is it coming?

 

]HDB owners with insufficient CPF see mortgage insurance lapse

 

SINGAPORE - About 9,000 Housing and Development Board (HDB) flat owners have seen their national mortgage insurance lapse due to insufficient funds in their Central Provident Fund (CPF) accounts to pay the premium.

 

That amounts to 1.7 per cent of about 556,000 home owners who service their HDB loans with CPF savings - a small percentage, National Development Minister Mah Bow Tan said in a written response to a query from Member of Parliament Irene Ng (Tampines Group Representation Constituency) yesterday.

 

Called the Home Protection Scheme (HPS), the insurance safeguards HDB households against the loss of their flats should the breadwinner die or become incapacitated before the loan is fully repaid.

 

A further 8.5 per cent were exempted from HPS, as they have purchased similar insurance, while about 2 per cent were not insured due to medical conditions or other reasons.

 

Reasons homeowners could not pay include loss of jobs. Where appropriate, the HDB would work with relevant social agencies to assist those in financial difficulty, the written reply stated.

 

Meanwhile, Senior Minister of State (National Development) Grace Fu shot down a suggestion to allow HDB grants to finance the cash-over-valuation (COV) component of a resale flat.

 

Doing so may result in flat sellers demanding higher COVs, driving up resale prices, Ms Fu said yesterday in Parliament.

 

She added that those concerned about high COVs should apply for Build-to-Order (BTO) flats instead. Up to 22,000 BTO flats could be launched this year. Cheow Xin Yi

Edited April 13, 2011 by Itsec

[Sgnick]

are u 'c0ck' ?? or brain wash ??

 

I am c--k WASHED

[Kiadaw]

still a subsidy mah ... it was stated subsidy relative to market value, not cost. .... coz you pay 400K instead of 500K should you buy in the resale market. And should the price rose to 800K , and you sell off, you gain 800 - 400 = 400K instead of just 300K if you buy at 500K. .. haha ...

 

And if the govt sell at below cost, or even close to cost, i think almost all HDB owners will jump off the roof leh, prop mkt pit jiak ..... there is no way the govt is going back to cost based pricing lah

 

I do agree that we can't expect government to sell below cost price, not now after long years of pacing to "market value".

 

Its the choice of words that is debatable to me.

 

I have no problem if they told me they sold at "below market value" or they "made have to made some profit from flat sold".

 

But instead I hardly, if ever hear them said they made profit from selling HDB flats? Have you. Why would they use the word "subsidy", which seems quite misleading, imo. Even "discount" rate would seem a better word, since discount measn selling at a lower value than normal, but not neccessary at a lost. "Subsidy" give impression to me (at lest) that it was sold at a lost. That or I should learn to read between the lines, or brush up my Angmoh.

 

 

[Sgnick]

i think its not loss lah, they just MAKE LESS money .. rofl

 

Sorry, hor, HDB reports BIG BIG LOSS in newspaper. LOSS, not less profit. Why loss? Because they have the best and most creative accountants in the world.

[Joseph22]

FYI

Are we seeing the 'phenomenon'? Is it coming?

 

]HDB owners with insufficient CPF see mortgage insurance lapse

 

SINGAPORE - About 9,000 Housing and Development Board (HDB) flat owners have seen their national mortgage insurance lapse due to insufficient funds in their Central Provident Fund (CPF) accounts to pay the premium.

 

That amounts to 1.7 per cent of about 556,000 home owners who service their HDB loans with CPF savings - a small percentage, National Development Minister Mah Bow Tan said in a written response to a query from Member of Parliament Irene Ng (Tampines Group Representation Constituency) yesterday.

 

Called the Home Protection Scheme (HPS), the insurance safeguards HDB households against the loss of their flats should the breadwinner die or become incapacitated before the loan is fully repaid.

 

A further 8.5 per cent were exempted from HPS, as they have purchased similar insurance, while about 2 per cent were not insured due to medical conditions or other reasons.

 

Reasons homeowners could not pay include loss of jobs. Where appropriate, the HDB would work with relevant social agencies to assist those in financial difficulty, the written reply stated.

 

Meanwhile, Senior Minister of State (National Development) Grace Fu shot down a suggestion to allow HDB grants to finance the cash-over-valuation (COV) component of a resale flat.

 

Doing so may result in flat sellers demanding higher COVs, driving up resale prices, Ms Fu said yesterday in Parliament.

 

She added that those concerned about high COVs should apply for Build-to-Order (BTO) flats instead. Up to 22,000 BTO flats could be launched this year. Cheow Xin Yi

 

so true... but she is stupid for not realising that COV is high because their BTO are selling at obsecne high price.