SDP launches housing programme: Non-open market flats

[Ysc3]

more like propose … since they can't really launch anything … (disclaimer : this post is not politically motivated)

 

SDP launches housing programme: Non-open market flats to solve the problem of depreciating value of HDB flats

 

Under the programme proposed by SDP, administrative, material, and labour costs will still be included in the price of new HDB apartments, but the land cost will not, resulting in considerably lower prices

 

Singapore Democratic Party (SDP) launched its housing policy on Saturday, April 6, with the proposal for Non-Open Market (NOM) flats to be introduced to the public housing system to address HDB’s 99-year lease crisis.

At at the SDP office in Ang Mo Kio, the party’s leaders explained that NOM apartments are those which do not include land costs in their price.

 

The policy, entitled Housing A Nation: Holistic Policies For Affordable Homes, was presented by Party Vice-Chairman John L. Tan, and Treasurer Bryan Lim.

 

They explained that this programme would address the problem of the depreciating value of HDB flats because of the 99-year lease of the land.

 

At the launch, Mr Tan said, “Depreciating values, especially of ageing flats, mean that owners cannot depend on their flats as a nest-egg. The problem is compounded by the fact many Singaporeans have depleted their CPF savings to pay for their flats.”

 

Under the programme proposed by SDP, administrative, material, and labour costs will still be included in the price of new HDB apartments, but the land cost will not. This will result in considerably decreased prices for flats, for example, 2-room apartments would cost around S$70,000, and 5-room flats could cost lower than S$240,000.

 

Bryan Lim pointed out that “As the name implies, however, flats bought under this scheme will not be allowed to be re-sold in the open market,” and that people who wanted to sell their flats would have to sell them again to the HDB.

 

He pointed out that for public housing, the Government should not make a profit from citizens, and that citizens should not use their HDB flats for capital gain. He asserted that as a social good, public housing must be utilized for meeting the ends of the people, and not for profit for either the government or homeowners.

 

According to a statement from the SDP, under the NOM scheme, Singaporeans would only take 9-15 years to pay off their housing loans, given a 3 percent interest rate and using no more than 20 percent of gross income. The SDP says that this reduces the burden on citizens buying homes and that it would free up funds for greater retirement savings.

 

Part of the SDP’s proposal is for existing homeowners to convert their flats under the NOM scheme, which would entail the Government giving back the difference between “between the original price of their flats (as purchased from the HDB) and price of an equivalent NOM flat subject to a cap,” the press statement said.

 

Afterward, the difference would be credited to the homeowner’s CPF or would go toward existing housing loans. “The NOM scheme essentially gives Singaporeans an added option of buying a home at a greatly reduced price. First-time HDB buyers can choose to buy an open market or non-open market flat.”

[Volvobrick]

Interesting proposal.  Basically it is a rental at 3% of the flat price with deposit at 100% of the selling price (assuming buyers have the amount in CPF).  eg. 6000 per year (of 500 per month) for a 200K flat (4/5 rm).

 

Not sure if many would bite, but resale prices for normal flats might be affected.

Edited April 8, 2019 by Volvobrick

[PSP415]

Yup. Not as simplistic or easy.

 

Definitely will send prices of existing flats diving.

 

Its just mass rental basically and worth looking at as an option for ppl who want more monies left in cpf for retirement. These flats no resale value as cannot sell to anyone except HDB.

 

Just thinking out loud, say Owner A sells back to HDB, will HDB sell it at original price of $70k (assuming its the 2-room type) or much lesser based on depreciation formula. If depreciation is taken into account, then a 15 years old flat may go as low as say, $40k or 50k?

 

Interesting idea. This will prevent ppl from using flats to flip flip for profits. Ppl also cannot rent out such flats too. Land belongs to the country anyways.

 

Hehe...i like the idea. But more details will be needed of course. It may mean private properties maybe made even more out of reach of common ppl? Only those who can afford and want an investment element in their properties will snap these up.

 

Safe ride

Cheers

[Lala81]

Council estate.

 

The problems when u can only sell back to the govt has been experienced by other govts and other systems.

It's been in existence for a long while. I'm not convinced of the merits.

[PSP415]

Ahso, Lala81, thanks for the term. Googled it and its basic function is cheap housing for the needy. Popular in the UK especially.

 

Not too good then for Singapore. Backwards planning and long term will have real issues for us as a whole, eg property values badly affected.

 

Just my tots. Thought we already have an equivalent housing scheme now for the senior citizens starting from $70k on shorter tenure of 60 years lease and also cannot resell iirc.

 

Just tweak the name of scheme from seniors housing to beginners housing. Not wholesale for all flats type. We will send prices diving until no joke.

 

Safe ride

Cheers

[Spring]

It’s not wrong to count land costs to HDB flats cos if that land were not used to build HDB flats then it would be sold to developers which would bring in $

 

That said, to be transparent; HDB has to show breakdown of:

1) approx land costs which can be estimated based on similar land parcels sold recently.

2) costs of construction and other incidental costs

 

With the above figures, then only can we know approx how much HDB flats are being subsidised. I think not too much to ask n will put to bed this perennial argument of whether HDB flats are truly subsidised or not, my 2 cents.....

[Jman888]

if dun include land cost mean hdb near town will be price the same as those in bird no lay egg estates? or high floor and low floor?

 

 

dun tell me they going use draw lots method.

[Windwaver]

That said, to be transparent; HDB has to show breakdown of:

1) approx land costs which can be estimated based on similar land parcels sold recently.

2) costs of construction and other incidental costs

 

 

Don't think that's going to happen for a long time.

[Ixus75]

I think its a good idea so I have more money for retirement.

[Spring]

Don't think that's going to happen for a long time.

That’s the trouble isn’t it?

Govt is adamant that HDB flats are heavily subsidised. The skeptics don’t believe n come out with all sorts ideas, suggestions n I even remember few decades ago Opp MP Chiam was challenged to build some HDB blocks of flats by MND Teh Chiang Wan.

 

Show the nos. and all arguments will be put to rest or at least not exaggerated either way.

 

Just my opinion without any facts that I believe the answer is in between ie HDB flats are subsidised but not as much as govt wants us to believe but on the flip side, the skeptics are also exaggerating on how cheap a HDB flat really is.

[Windwaver]

That’s the trouble isn’t it?

Govt is adamant that HDB flats are heavily subsidised. The skeptics don’t believe n come out with all sorts ideas, suggestions n I even remember few decades ago Opp MP Chiam was challenged to build some HDB blocks of flats by MND Teh Chiang Wan.

 

Show the nos. and all arguments will be put to rest or at least not exaggerated either way.

 

Just my opinion without any facts that I believe the answer is in between ie HDB flats are subsidised but not as much as govt wants us to believe but on the flip side, the skeptics are also exaggerating on how cheap a HDB flat really is.

 

I also want to know the breakdown but all we can do is a rough estimate based on construction cost in general.

 

Frankly, I think HDB will not lose money 

[BanCoe]

Thatâs the trouble isnât it?

Govt is adamant that HDB flats are heavily subsidised. The skeptics donât believe n come out with all sorts ideas, suggestions n I even remember few decades ago Opp MP Chiam was challenged to build some HDB blocks of flats by MND Teh Chiang Wan.

 

Show the nos. and all arguments will be put to rest or at least not exaggerated either way.

 

Just my opinion without any facts that I believe the answer is in between ie HDB flats are subsidised but not as much as govt wants us to believe but on the flip side, the skeptics are also exaggerating on how cheap a HDB flat really is.

Agree with you bro , basic housing (SIT) as it was called back then to rehouse squatters and was the goal , then came bigger flats (5 roomers) and beyond like HUDC and all that stuff and then some politician came around and tried to spin the story and make people feel asset rich and then the very basis went awrily wrong and then newly minted PR’s started mopping up and they could pay a higher premium of about $10-15K back in the 90’s for a 5-room in Marine Parade and I had to settle for a more “Ulu” bedok back then and resale prices were skyrocketing crazy not 3% PA but like 25% PA

[Spring]

I also want to know the breakdown but all we can do is a rough estimate based on construction cost in general.

 

Frankly, I think HDB will not lose money

I think it’s quite hard for us to estimate esp building n related costs. HDB build in bulk though contract is given out on per development basis n as such I’m sure contractors offer fair prices to get the contracts so as to be able to be awarded future contracts. I don’t think the prices contractors offer for a HDB BTO is readily available n hence the lack of transparency here.

 

Land costs I suppose abit easier to estimate but then again unless there is a nearby land parcel bid recently, it’s also abit difficult to guess.

 

This debate will go on for years to come unfortunately if govt doesn’t give the breakdown n of course even with figures there could be other disputes but at least something for the public to scrutinise.

[Ben5266]

if dun include land cost mean hdb near town will be price the same as those in bird no lay egg estates? or high floor and low floor?

 

 

dun tell me they going use draw lots method.

Singapore every where is also CITY....

 

all hdb $100 psf.....

DBS, UOB and OCBC will need bailout tomorrow.

 

 

 

Edited April 9, 2019 by Ben5266

[Windwaver]

What to do? We all born, live and die in a city; that's not an experience most people get 

[Angcheek]

That’s the trouble isn’t it?

Govt is adamant that HDB flats are heavily subsidised. The skeptics don’t believe n come out with all sorts ideas, suggestions n I even remember few decades ago Opp MP Chiam was challenged to build some HDB blocks of flats by MND Teh Chiang Wan.

 

Show the nos. and all arguments will be put to rest or at least not exaggerated either way.

 

Just my opinion without any facts that I believe the answer is in between ie HDB flats are subsidised but not as much as govt wants us to believe but on the flip side, the skeptics are also exaggerating on how cheap a HDB flat really is.

 

 

they treated themselves as businessmen ...... They dont see themsevles as the party to provide any public housing .

In fact such public housing is their POS . Just look at the INT they offering over the years ..... 

 

thats why they wont show their numbers . You can imagine if they show a thick GP to the  World , how they gonna answer for it ?    

[Sdf4786k]

That’s the trouble isn’t it?

Govt is adamant that HDB flats are heavily subsidised. The skeptics don’t believe n come out with all sorts ideas, suggestions n I even remember few decades ago Opp MP Chiam was challenged to build some HDB blocks of flats by MND Teh Chiang Wan.

 

Show the nos. and all arguments will be put to rest or at least not exaggerated either way.

 

Just my opinion without any facts that I believe the answer is in between ie HDB flats are subsidised but not as much as govt wants us to believe but on the flip side, the skeptics are also exaggerating on how cheap a HDB flat really is.

 

https://www.straitstimes.com/singapore/teh-cheang-wan-case-no-way-a-minister-can-avoid-investigations

 

Sad history.

 

This jaw-dropping speech revealed then-Prime Minister Lee Kuan Yew's zero tolerance of corruption. He kicks off the parliamentary session by reading out a suicide note addressed to him, written by the Minister for National Development Teh Cheang Wan, who had died suddenly a month before. Mr Lee goes on to reveal for the first time that Teh was being investigated for accepting bribes.

[awhtc]

If land is given free for public housing, the loss of tax revenue will have to come from some other areas.  In addition, it will be difficult to price in good locations as the building costs are quite similar.  Hence, the lottery striking effect of balloting will be even more pronounced.