5/21/2009

HDB to build more 2 and 3 rm flats

Is this progress or regress? Or are we telling the Singaporeans that My endearing home is a 2 or 3 rm flat? Of course not. My endearing home is a freehold landed property, 20,000 sq ft, in district 10 or Sentosa. 2 and 3 rm flats are for the losers. In fact all public flats are for losers. the 2 and 3 rm flats are for those who can't even buy a 4rm flat. How many can afford to buy a 4 rm flat these days when the price is $300k to $400k or more? In my time, a single income family, a young graduate with 3 or 4 years working experience could even buy a 5 rm flat. Today, with 2 incomes, two graduates would have problems buying a 4 rm flat. Is the life of Singaporeans getting better? Of course, depending on who you are asking.

24 comments:

Anonymous said...

In your time, university education was a privilege. Now, graduates are a dime a dozen. Question: What do you get when you flood a market with a product. Answer: The value of that product diminishes, ceterus paribus. A graduate is no big deal today. heck, you can buy a degree scroll from any university in the world online if you want.

Matilah can probably chime in on this but your actual problem is the fiat money system rather than HDB or PAP. Virtually every country in the world grapples with the problem of rising costs due to inflation. Why do you think Singapore will somehow be different?

Anonymous said...

If this is an indication of our target of SWISS standard, we are indeed regressing and passed our peak. This is my observation and conclusion, that we are running out of tricks, the ruling party is going to have trouble ahead with a braodly educated population(think AWARE fiasco). With 1st world expectations, we have to temper our demands for public housing.

redbean said...

singapore is the most managed economy. we can practically managed the price of everything, including oil. hdb prices is the easiest to manage, up or down. there is no need to price it beyond the income of the average losers.

but looking at the bright side, we can still boast that our 3 rm flats are bigger that the hongkong cubicles. walking from one end to another end will be a good workout for the heart.

Anonymous said...

They can price it up, yes but once prices have reached the stratosphere as they are now, adjusting it back down will not be possible without risking a large number of existing 'home owners' going into negative equity. That is why they now have to peg the price of new HDBs to market prices. If prices are to adjust, Mr Market will have to do it, not HDB. Since the HDB market forms the market floor, the entire property market may just go into a tailspin.

I also see this as a problem of expectations. Buy what you can afford, not what you desire. You certainly can't go wrong with that.

Lost4ever said...

just shows that more and more people are being left behind in this singapore system.

perhaps all who cannot afford the buy expensive hdb flats be shipped out to another country.

well, super talents must solve this problems, not blogger like us.

redbean said...

pushing up property prices, pushing up cost of living, then try to push up salaries, is like a dog chasing its tail. it will never catch up. a deadly spin to nowhere.

Anonymous said...

replace those left behind with high quality foreigners and we have swiss standards as early as the next day

Anonymous said...

Who said they were pushing up salaries? If anything, it is the opposite as evidenced by the virtually unrestricted flow of cheap labour from third world countries. You have seriously lost the plot, redbean.

Anonymous said...

"How many can afford to buy a 4 rm flat these days when the price is $300k to $400k or more?"

A great many judging from HDB new and resale figures. Otherwise, HDB would be stuck with a glut of unsold new flats and the prices of 4 rooms would have collapsed. That hasn't happened.

redbean said...

actually we are partially right and partially wrong. for the losers, sorry man. salary must not go up to be cost competitive. but if you are earning half a million and above, sit back and relzax. salary sure to go up or you can quit and join another company that will pay you more. and for those earning millions, better still. millions will be added.

as for buying of hdb flats, yes, many queueing up to buy and to pay through their entire life time, with two incomes. don't they ever lose their jobs half way.

Anonymous said...

"as for buying of hdb flats, yes, many queueing up to buy and to pay through their entire life time, with two incomes. don't they ever lose their jobs half way."

And I am saying this is the case in other countries as well. It is not unique to Singapore. In Australia, 30 year mortgages is the norm and most people pay them well through their 60s. Japan even has multi-generational mortgages where the mortgage is inherited by their children. Of course the onyl difference is that in other countries, once you pay off the mortgage you actually own the title to the property. For HDB, you only finish paying your advance rent to them. The flat never ever belongs to you. But the point remains sky high property prices is not uniquely Singapore.

Anonymous said...

Not to mention there is no single country in the world that has a high standard of living AND a low cost of living. It just doesn't add up.

redbean said...

imported cost of living is something that we have to bear. but many of the high cost of living were our own creation. coe, hdb price, high rentals, high admin cost etc.

Anonymous said...

Have you forgotten that Singapore imports almost all of its needs from overseas? Even for things that we do make, the raw materials still come from overseas.

redbean said...

i must agree with you. we imported everything, including the land to build hdb flats and jtc factories, coes, erps, gst, supertalents etc.

we must have imported our ministers as well.

Matilah_Singapura said...

Spectacular!

The govt are rationing the space — more bang for the buck. They get the bang, you pay the bucks.

Very soon S'poreans could be living like this!But you will still get the supreme pleasure of paying with your hard-earned money — for your discomfort — to your oh-so compassionate government, who might need that pay rise, so that they can 'look after you' better!

Emigration visas anyone?

Anonymous said...

Soon SIN will be a very Ugly Sincity.

patriot

redbean said...

the system is only sound and good to those that are already in the system and benefitting from it. the people that will be hit very hard are the new generations that are growing up and entering the economy. these people will find everything beyond their means.

that is why those in the system are padding themselves with more and more to pass it on to their next generations. those who don't have successful parents to pass down the inheritance are in for deep troubles. when income is hardly rising, and when hdb flats will fetch a million, where to find the money to pay for them?

the music will stop in a matter of time. the faster they push up the cost of living, the faster will the music come to an end.

Matilah_Singapura said...

> those who don't have successful parents to pass down the inheritance are in for deep troubles < Sure. The solution is to act in ways to lessen the chance of the adverse occurring. With a 70-85yr lifespan, there is possible to make a "success" of your life — but it is up to you.

redbean said...

matilah, you just offer a great idea to make hdb flats affordable even at $1m for a 3 rm flat. with lifespan of 80 and 90 years, the repayment period can be stretched from 30 to 60 years. then the monthly repayment will be more affordable. still a lifetime to pay though.

ps. i repaid my 5rm flat in less than 20 years with a single income. why it could be done then and not now? maybe the hdb administrator then were more stupid.

Matilah_Singapura said...

> i repaid my 5rm flat in less than 20 years with a single income. why it could be done then and not now? Simple answer: inflation. The printing of money and subsequent devaluation of purchasing power LAGS the increase of wages. Therefore the numeric prices of scarce goods (of which housing/land is in ever-growing Singapore) will increase faster than the increase in peoples' wages.

This is an inescapable fact nation states are using paper currency based on debt and "relative strengths" with other currencies.

However inflation leads to an eventual economic collapse. This should be allowed to happen and not interfered with. Then prices can collapse making the scarce good more "affordable" to buyers previously out-priced by the market.

For e.g. in Detroit, Michigan the average price of a home has plummeted to US 18,000. The Chinese govt are encouraging their citizens to get onto the group tours organised to travel to different countries to buy real estate. They are buying BIG in Africa where prices are still low, and the Chines currency relatively strong. The Chinese are using real savings to purchase these assets.

"The Chinese are going to end up owning EVERYTHING" — George Carlin, Comedian

I agree. And power to them!

> still a lifetime to pay though. < You're forgetting one thing. In the objective sense, Singaporean are actually RENTING their HDB from the government.

The mechanics are strange and complex — the entanglement is with politics, peoples jobs and income, their family, their future, people planning to raise a family. It's all very sensitive and individually important and therefore DEEPLY EMOTIONAL as it is bonded to the core of what makes people feel secure — their belief that the world is essentially "safe" — not just for them but for their family and the entire existence of their homeland.

The PAP are masters at exploiting these deep roots. I tell, you, I'm in AWE at the whole thing.

Genius. Pure genius.

redbean said...

'However inflation leads to an eventual economic collapse. This should be allowed to happen and not interfered with.'

this will happen at great force if not moderated. do we want a collapse or some massaging along the way to prevent a collapse? a free economy running like a wild horse will end up like america. and it will be so painful for many to bear. on the other hand, the middle path, reining in the horses before they run too wild will allow the run to last longer and less painful.

inflation will help house buyers to pay off their loans quicker. true. but this magic formula cannot keep running. it will snap. salary cannot keep going up to keep pace with higher prices. those who are in it, with many houses, will love to have housing prices galloping away.

but what about the young people coming into the market. they will be the ones who will have to pay through their noses. but of course, if inflation is left unchecked, it is a matter of time when their inflated income will do the job for them. this is a big if, when hdb prices are already beyond their means, and if their salaries are going to be doubled or tripled.

so our young graduates will soon be earning $6k or $10k pm to pay for the high prices of hdb flats. the employers will be happily paying them.

Matilah_Singapura said...

Trying to interfere with the collapse which results from inflation only leads to a bigger collapse in the future.

Just take the period from the tech-wreck of 2000 and 9/11 in 2001. There was economic collapse. Greenspan inflated (dropping interest rates eventually to zero), more derivatives were created — all done to ensure the availability of liquidity and "credit".

That interference in 2000-2001 (which was the result of the collapse from previous interferences) has resulted in the mess we are in today. And Obama, Geitner and Bernanke are printing again.

All the newly created money has to go somewhere: the stockmarket is up. Commodities are up — nothing new is being produced mind you, but equities are rising. Maybe there might be another real estate bubble.

But the next crash will be even worse than this, and there could be a period of long drawn out economic stagnation. Famous market beat Jeremy Grantham (google him) says after this bear rally there's going t be lean times for around 7 years.

Make up your own mind.

Matilah_Singapura said...

correction:

Famous market bear Jeremy Grantham