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1/10/2006
hdb pushing out 400 units unsold flats to property agents
hdb states that it has 9000 units of unsold flats. assuming the average price of each unit is $200k, it means $1.8 billion stuck in these flats. servicing the interest at say 3% of cheap loan will cost $54 mil a year. and these flats have been left unsold for an average of 10 years, i think. this means $540 mil
and on a simple equation of depreciation, losing 10 years is 10% of its value at $200k per unit or $180 mil in value.
does this mean that hdb has made a loss of $720 mil on these 9000 units of flats over a 10 year period. and the losses will add on if the flats remain unsold? the figures are just guesstimates but it sure looks big if true.
like i said to matilah, today's success is tomorrow's failure. what we think is good today could actually destroy us. the same success and failure story is nkf. because it becomes too successful, it leads to its downfall. hdb was a success story but then over built. our birth control policy was so successful that it has now become a big problem.
life just go round in circles.
Just returned from a drive to Jurong Point. Along the way I could see many HDB apartments are still empty. There are not new build but have been there for quite some time.
ReplyDeleteHowever, I understand the HDB as a very cash rich organisation. Therefore half a billion SGD should be considered a small inconvenience. To dispose of these quickly I have been informed that they are now allowing singles to purchase these apartment. I am sure if this true, they will get these apartments off their hand rather quickly. All they have to do is to change the rules.
it may not be that easy. they have created so many rules and now the rules are going to tie them as tightly as they tied the hdb dwellers.
ReplyDeleteand if i can remember correctly, hdb had asked and given a grant or subsidy in the tune of a few hundred millions to tie them over these difficulties. hdb is no longer cash rich. the hdb centre cost quite a bomb too. and with the golden handshakes they paid to their staff only to rehire them, all these are money paid out.
This is the smartest thing the govt has done: to surrender to market forces and not "protect" the HDB.
ReplyDeleteThe fact that these properties is coming down in price is a good sign. Over-supply means lower prices, and "better" value to the buyer.
HDB's are already "sunken money". The tax-funded subsidies used to build these units is already "spilt milk" and no one can wind back time. The reason govt programs ultimately fail - leading to over or under supply - is because govt programs neglect market forces and the price mechanism which acts as a "signal" as to the correct or incorrect allocation of (scarce) resources.
HDB's were and currently still are vote buyers. They are used, quite candidly by the PAP to lure and win over voters. This has been going on for 40 years, and as long as public housing is tied to the politics, HDB's will always be an integral part of the carrot-and-stick mechanism which is the immutable nature of Singapore politics.
However, I applaude the govt for (in this instance) coming to its senses, facing reality and surrendering to market forces - i.e. nature, and the spontaneous order of chaos.
in several ways i agree. but one point, in the hdb case, the hdb thinks it can determine the price and not the market. but again, yes, the market is more powerful than hdb. finally the market stands up to show who is the boss.
ReplyDeletehdb is a powerful tool for many years to help pap. it will be the tool that will destroy pap one day. give it another 20 years when most of the hdb resale prices can only go one way, down, no matter how much upgrading you do. when the lease is less than 50 or 60 years, its only value is rental. no more appreciation but depreciation.
when the people realise their life savings and investment are turning sour, things will be different. only saving grace is to extend the lease by another 30 years. that is if the construction of the flats permits. or like what the govt is trying to do now, offer them a new flat in exchange. a few blocks wil not be a problem. but when hundreds of blocks are affected, the cost may be prohibitive.
居者有其屋，到处都有屋就是居者买不起。。。处处有其屋，处处有居者。。。无其屋。
ReplyDelete国家如此良策，果真治国有方，万民之幸哉！
the housing problem was solved several years back. but it will return as a housing problem in years to come. but what had happened to the housing policies over the last decade could shorten the honeymoon phase and people may be so burden by the housing problem that it will become a public issue sooner than later.
ReplyDeletethings come full circle.
Are you sure the housing problem was solved?
ReplyDeleteOr you mean the department's problem was solved? Or you mean intended-to-buy-homes-Singaporeans' problem was solved...?
sure elfred,
ReplyDeletewhen everyone who needs a roof over his head will get one, and at a reasonable price. but later the price structure was changed.
i think it is a case of people seeing so much money in the cpf and think it is easy money to be had. and the cpf fortress was broken and the rest is history.
Hahahaha... Why had the price structured changed when the poor people's income structure over thousands of years haven't? Hahahaa...
ReplyDeleteIsn't this a public effort? What is 居者有其屋if only those who can pay can have homes... rich and affordable needs no such grand policy and they'd still get homes.
So how now? Problem solved? Where in the f... would I sleep if I left home to live on my own? To pay to the rich for a temporary roof? And to save enough for a condo...? Hahahahahahaha...
Hahahahahahaha...
Please lah... You really think I am one of those blinldy taking every scrap propaganda readily...
elfred,
ReplyDeletethere are two issues here. the first was insufficient housing after gaining independence. singaporeans were all squeezing into small cubicles, 10 or 12 people into one room. ok, the rich still had their bungalows.
the massive housing programme took care of this. and hdb flats were cheap then. $7,500 for a 3 room flats!
then the brilliant minds got brilliant ideas. and this is the second part, when your flats are priced against your affordability and market prices. this is now your problem and every hdb flatowners problem. only the brilliant people can answer this.
i can't answer for them.
You see...事不关己高高挂起...
ReplyDeleteCos those brilliant where got bother about HDB? All they want would be figures... and then condos, bungalows and so on. You mean HDB build terrace for poor people to squeeze in?
No wonder the PAP leadership is irreplaceable... cos the opposition is even worse.
Why cannot afford? People as myself are enjoying GDP per capita jumping to USD$40,000 P.A, stuck in unemployment crisis since graduating and so many jobs got 'migrated' (AKA outsourced) and we still have many many foreign talents coming in and mock at us. :D
I think the word absurd never exist in the dictionary of some.
Cash rich...? No. NKF is the most cash rich. You build houses, you need buy materials outside Singapore. NKF's operating cost mostly to where? GLC such as media corp lah, the fundraisers who end up could be grassroots people, and they still have subsidies from government just in case. Most critically so, is as long as they are fools, they will have the income. This is much like operating Toto. You invest a percentage of the pool back to the punters and keep the rest for whatever. :D
ReplyDeleteDurai is not the only smart-alec in Singapore. He's just d@mn lucky, ie.