New housing rules from 10 May 2019

[therock]

who is the idiot pay $3.5k to rent an old HDB with gianpeng furniture and dirty toilet bowl?

muahahahaha ... huat ah!

and the rules to rent out hdb keep changing and tightening

overnight can strike the million dollar hdb rental dream to $0

 

Let's take the three blocks at Commonwealth MRT. 30 plus stories high, with the train so close you can almost pee on it.

 

Take a couple or even a brace of close friends. Rent the place at say 3-3.5k and divide it up. The one who gets the master bedroom pays a bit more. 10 mins to Science Park. 15 mins to Orchard Rd. 

Market, food and weekends at Holland V. 

Ask the owner to spruce up the place, after all, it's 3.5k rental. Provide a new 55" TV and wifi and a decent toilet with hot water. All very standard requests.

 

Any takers? 

 

Plenty I'll say... Not everyone needs or wants a swimming pool and tennis courts.. of course Commonwealth Towers or Queens might be 'sexier' but these large HDB blocks have their attraction too..

[Wt_know]

hdb got 3 bedrooms

to get that amount

at least 3-4 tenant ... 2-masterbed, 1-common, 1-common

worst is to get 6 tenants to split the cost

and toilet will be a huge challenge during peak hour to go to work

and the target are either prc, indian or pinoy FT

except prc ... most indian and pinoy FT all rent condo liao

1room studio or 2room sharing... easy to find roommate

Edited May 16, 2019 by Wt_know

[Wind30]

The difference is in the potential capital appreciation.

 

The old HDB, while has great conveniences, spacious, etc.....has almost no chance of capital appreciation unless there is some form of policy change which the authorities are trying to tweak now.

 

The below chart tells you the current story. All Condos $psf appreciation vs All HDBs $psf appreciation.

 

Note : Chart below does not include EC

The government is not trying to tweak policy to appreciate old hdb. If anything, they are tweaking it the other way. The recent drop in hdb resale prices is the message from government has finally sunk in. Don’t expect public housing to appreciate as it is not sustainable.

 

At the end of the day, is the higher rental yield worth the higher depreciation ? Same argument as 99 years vs freehold.

 

The answer is not that clear cut...

[Jamesc]

If people old already and cannot afford a roof over your head can join me in Bangkok.

 

I plan to retire there. We can even have a maid to cook and also clean us.

 

[Icedbs]

The government is not trying to tweak policy to appreciate old hdb. If anything, they are tweaking it the other way. The recent drop in hdb resale prices is the message from government has finally sunk in. Don’t expect public housing to appreciate as it is not sustainable.

 

At the end of the day, is the higher rental yield worth the higher depreciation ? Same argument as 99 years vs freehold.

 

The answer is not that clear cut...

 

On the recent CPF moves for old flats, there are two camp of thoughts among the agents and agencies.

 

The first camp focuses on the positives....older folks can now use more cpf to buy older flats,  so that should bring more demand to old flats, at least sustaining their value.

 

The 2nd camp focuses on the limitation, that younger folks may be discourage to buy older flats now, so lesser demand on the older flats causing more depreciation.

 

Time will tell which way it will go.

 

However, if we look at all the other moves such as HIP2, VERS and enlarging the radius from 2km to 4km for proximity grant, it is quite clear that those moves are to help to sustain or increase the demand for older flats.

 

As for higher rental yield vs depreciation for older flats,  one has already lost the first 5 years of MOP period that they could not rent out the unit. The depreciation already had a head start for 5 years. I do not think the higher rental yield is going to be worth it in the end.

Edited May 16, 2019 by Icedbs

[Angcheek]

On the recent CPF moves for old flats, there are two camp of thoughts among the agents and agencies.

 

The first camp focuses on the positives....older folks can now use more cpf to buy older flats,  so that should bring more demand to old flats, at least sustaining their value.

 

The 2nd camp focuses on the limitation, that younger folks may be discourage to buy older flats now, so lesser demand on the older flats causing more depreciation.

 

Time will tell which way it will go.

 

 

 

 

I also have the same thinking ... the 2 schools . and I sided the 2nd camp . 

 

i still think reducing the 30 yr to 20 yr min lease period has little impact . This can be seen as a positive act of 10 yrs benefiting older people age > 65  ... however, they also increased the min age coverage from 80-95 ... a reduce of "15 yrs " of potential buyers  age 50-60 .  

 

 

if anyone wan to downgrade , they would have done before 65 .  Selling their flat has no benefit from pledging . if they have alot of cpf , this scheme has no benefit . if they dont have cpf , this scheme doesnt help either .... ok just my own view . 

[Angcheek]

If people old already and cannot afford a roof over your head can join me in Bangkok.

 

I plan to retire there. We can even have a maid to cook and also clean us.

 

 

BKK not cheap lel .......... outskirt maybe ok . 

 

are you trying to find someone to be escape goat for ur MIL ? 

[Angcheek]

$1 million HDB (usually):

 

- central (saves time for family's daily travel)

- near / at MRT

- plenty of amenities

- near workplace

- near premium schools

- (sometimes) premium address

- (sometimes) culturally rich areas

 

If rent such a place, the rent is probably around $3000-3500 per month based on today's low rent price. Some 30 years to recoup the full rent with some length of lease left.

 

May be a good deal for some if they can unleash the value.

 

if include INT , maybe alot more yrs ... 

 

on the other hand , people who pay such high price for BTO , likely for their own stay instead of renting out. 

if u buy for investment , u wont pay the highest price on record rite ?  

[Showster]

if include INT , maybe alot more yrs ...

 

on the other hand , people who pay such high price for BTO , likely for their own stay instead of renting out.

if u buy for investment , u wont pay the highest price on record rite ?

Personally if I can choose, I will opt for the cheapest BTO and reserve the cash for private (upgrade or second property).

[Wt_know]

that’s sound more like it ...

a below $350k bto give the highest yield in rental income

after mop chop chop rent out whole unit especially for the sengkang/punggol new bto

 

Personally if I can choose, I will opt for the cheapest BTO and reserve the cash for private (upgrade or second property).

Edited May 16, 2019 by Wt_know

[Lala81]

thatâs sound more like it ...

a below $350k bto give the highest yield in rental income

after mop chop chop rent out whole unit especially for the sengkang/punggol new bto

 

 

Have to sell what. U want to incur 12% absd for your 2nd property? Huh.

[Wt_know]

Have to sell what. U want to incur 12% absd for your 2nd property? Huh.

12% ie $120k for $1M absd is sup sup water

10 years later ... rental income plus asset appreciation

no 50% no talk ... agent says one

Edited May 17, 2019 by Wt_know

[therock]

I think this is a bad idea to extend the lease, especially if the government and subsequently the taxpayer has to pick up the tab..

https://www.straitstimes.com/opinion/the-tricky-problem-of-lease-decay

 

Quote

Decaying leases on HDB flats are a growing concern with no easy solutions

Singapore's public housing programme, which has provided high-quality homes to more than 80 per cent of the population, is the envy of the world.

But almost 60 years on from the time when the first Housing Board flats came onto the market, the programme needs a major makeover. That's the broad conclusion of two recent studies on public housing reform.

One is by the Workers' Party (WP), which released a working paper on Nov 29. The other is by a non-partisan citizens' forum called the Future of Singapore (FOSG), authored by property consultant and International Property Advisor chief executive Ku Swee Yong, renowned architect Tay Kheng Soon and former GIC chief economist Yeoh Lam Keong, who presented their findings at a public seminar at the Singapore Management University on Nov 30.

One issue that needs to be addressed is the decaying of leases on older HDB flats, which erodes their value and depletes their owners' potential retirement funds.

As HDB flats approach the end of their 99-year leases, their value falls. While this was not much of a problem 20 years ago, it will become progressively so as the flats age. By next year, Mr Ku estimated that 220,000 HDB flats will be more than 40 years old, and by 2030, that number will swell to around 500,000 - equivalent to almost half the current stock of HDB flats of just over one million.

The erosion in the value of older HDB flats and the shrinking resale market for them will happen at the same time as the ageing of the population is accelerating.

The result: Asset values will be declining just as many people will be retiring and trying to cash out. Given that the bulk of the net worth of the majority of Singaporeans lies in their HDB flats, the decaying of leases will have serious implications for retirement adequacy.

The Government has long recognised this problem, and it has put in place various schemes to mitigate it. One is the Lease Buyback Scheme (LBS), which enables eligible owners - aged 65 and above - to sell part of their leases back to the HDB and receive a stream of income, while continuing to live in their flats.

Another is the Selective En bloc Redevelopment Scheme (Sers), under which HDB redevelops selected older housing estates and the occupants can move to new homes with fresh 99-year leases and receive compensation packages, including rehousing benefits.