3/22/2013
New definition of affordability of HDB flats
In the papers today, Liu Thai Ker spoke about his times, the premises they used to compute affordability before coming out with HDB prices. This was the old formula, Dr Liu said, ’in those days, flats typically cost about three years of an owners’ salary…we looked at the per capita GDP growth, the sector of people eligible for public housing, their income, and then matching that to our selling price and to our flat sizes. It was really a very detailed study’.
The new innovative formula of the super talents, ‘ the prices of new HDB flats are set based on the typical household of families, the market price of similar resale flats in the vicinity, and the flat size and location.
You can make out the thinking behind the two formulae and the kind of people formulating them and what they were trying to achieve.
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25 comments:
Is it true that Singapore gahmen owns 90% of the land in Singapore?
Is it true that Singapore gahmen decides how many HDB flats to build and sell every year?
Is it true that Singapore gahmen decides and controls how many new citizens, PRs, employment pass and work permits get issued every year?
Is it true that there is sufficient information at the gahmen's disposal to calculate the housing supply & demand?
If this is true, then it must be the fault of the Singaporeans who voted in this PAP gahmen ... right?
The citizens went into the General Elections polling booth with their eyes wide opened.
You blame PAP?
Why not blame yourself for voting PAP?
Liu Thai Ker has helped to keep the cost of HDB a SECRET.
He was the CHIEF PLANNER of our HDB (Public Housing) before.
AND IT IS STILL NOT TO LATE FOR HIM TO TELL US THE COST OF HDB FLATS, IF HE IS SINCERE.
patriot
Did Liu Thai Ker know or did he not know? Some things are not what they seem on the surface.
Let me quote an example. When the former CEO of NTUC income left the co-operative, he was quoted as saying that he did not know the returns of the co-operative, hence the low returns given by him to policyholders at the tail-end of his tenure in NTUC income. Whether that is a fact or fallacy I do not know. But I do know that I was one of those affected and am still sore today. Very sore indeed!
So, given the benefit of the doubt that Liu probably did know, but was he given the authority or able to take the responsibility to reveal the facts?
This is the same with GIC and Temasek. Would some big guns in the know reveal the actual reserves managed by them or the actual, factual, real returns of GIC and Temasek?
What do you think?
$7k for a 3 rm flat in Queenstown in 1970.
$27.5k for a 5 rm flat in Holland V in 1974.
Whether Liu knew or not, it did not matter as he priced the flats to fit the incomes of the people.
Subsequently the formula to charge land prices was changed. Not sure if it was during his time or past him time.
There was a policy shift in pricing HDB flats.
Me am not surprise that You are a dissappointed customer, there are probably hundreds of thousands of others like You.
Housing affects almost all adults setting up families. It is a most essential item that almost all cannot do without.
ALL THAT HELP TO KEEP SECRET(S) THAT MAKE THE PEOPLE SUFFER ARE COMPLICIT TO SIN.
ALL THAT HELP TO KEEP SECRET THAT CAUSES INJUSTICE TO OTHERS ARE SINNERS.
patriot
QUOTE:
Did Liu Thai Ker know or did he not know?
March 22, 2013 11:42 am
Are you kidding me?
Are you serious?
A CEO does not know his cost?
Than how to do budget?
Then how to explain to Singapore Land Office & Executive President that he is not raiding the reserves?
Are you another Sinkie ever so eager to protect the rich & powerful?
Time to wake up and smell the coffee?
I would say the current policy is based around "market prices".
Just like the PAP pegs ministerial salary to "the top-executive market", HDB's are priced (or price-controlled) referenced to private market.
It makes good economic sense, because you get less price distortion and less of the "tragedy of the commons" effect, an effect which occurs when public goods are "under priced", and people rush in to consume the goods leading to future scarcity.
The idea of "public" housing is shifting more toward "private". The introduction of BTO flats has almost sealed the deal. i.e. you want customisation of your "public" housing flat? Then it is no longer "public" housing in the true sense.
Can't have your cake and eat it too...not for very long anyway. Those who got in early, have gained the most. That's life.
Public Housing is under stringent control, in fact all housing developments are under control. There is no possibility of suka suka can buy Housing Board Flats, hence no such thing as everybody buy them up.
CEO of HDB doing budget? Then what does the CFO do? What do the accountants do? Shake legs and wash toilets?
No wonder LHL needs so many helpers in his office. He needs to do the budget for Tharman.
Wake up!
MS said it is market pricing whoa. Tsk, tsk, tsk.
I work in the construction industry and I can tell you that the costs to build HDB flats are really cheap. 2-rm flats cost about $60K and 5-rm flats cost around $130K. This includes their share of common spaces such as lifts, carparks, playgrounds, landscaping, internal roads etc.
Govt is actually offering 2-rm flat at cost price to poor first-timer families. This is after taking into consideration all the 3 grants: CPF Housing Grant + Additional Housing Grant + Special Housing Grants.
That's why the new 2-rm prices are much lower than the new 3-rm prices, becoz the grants for 3-rm is much lower. A new 3-rm flat at $160K means HDB is already making 100+% profits. HDB is making a hell lot more profits on 4-rm and 5-rm flats.
You may think that with so much room to play with HDB can lower the new HDB prices some more right?? Wrong! Becoz the PAP is scared to crash the property market. They have already created a monster. Currently 40% of S'pore's entire economy is dependent on property in one way or another.
You may think industries like F&B, hotels, retail services etc are independent. But if you trace the money backwards, you will find much of the money originating from some property related activities -- property financing, development, materials, construction, professional services, legal services, human resources, govt activities, etc etc.
There is no way now for PAP to just reduce prices of new HDB flats without causing a massive recession and even depression. So they have to do it through many complicated schemes like more grants, expanding existing grants, having more qualifying tiers for grants, having more schemes to give discounts, having more levels & different levels of terms & conditions, etc etc.
As they themselves say, PAPies now have much 20-20 hindsight, no longer foresight. So the next few years they will try to "tweak" policies in order to pacify Sinkies and hopefully regain back more votes in 2016.
Crashing the housing market purposely is out of the question, but if it happens because of global issues, then it is a different matter. The PAP will have grounds to answer for that. The ones to suffer will be HDB owners who bought at high prices.
Right now, all they can think of is tinkering, tweaking, and coming up with all sorts of funny schemes to make it more complicating.
Our housing issue is just like the US debt issue, with no real solution but just pushing the problem further down the road, until the crash comes.
The basic idea about BTO is flawed - and a fatal flaw. Which private developer has the luxury of knowing that his project will have a take-up rate of at least 80% (or 70% or 90%) before embarking on the development? This is tantamount to "pau chiak" - sure to make money.
True free market private developers have to take the risk, bid for land and build within the timeframe dictated by the URA. And there is no guarantee that there will be buyers.
Yet we have this hare-brained sure-fire scheme called Build-To-Order. In other words, HDB will only build when the order book is almost filled. Not enough order, don't build. You can see why the prices can only rachet upwards.
This is the screwed-up so-called "market" mechanism that ensures prices can only spiral upwards.
Good luck for those who own a hdb and bad luck for those who are waiting to buy a hdb? Meritocracy or gambling game?
Today Singapore have much more money to finance it home grown SME to expand oversea, rather then depend on cheap foreign workers foreign multi national companies, who might threaten to leave if they don't have access to cheap foreign workers, Singapore can't depend on them they might leave any time to a cheaper country, Singapore have $260 billions of reserves, casinos revenues, Rental, Sales of properties, COE, GST, ERP, Levies and the locked up CPF reserves etc. to buffer any lost of foreign companies who left because of cheap workers, Singapore can massively fund the grow of home grown companies with this huge reserves and revenues?
Singapore probably has S$1 trillion reserves.
Reported official:
MAS about $300bln
Temasick about $250bln
Guesstimate: OLDman GIC must be biggest in relation to his EGO abt $300 to 600bln.
Therefore total about $1 triilion.
For those who owns a hdb, they have to pay high property tax unless they rent rooms out. For those who are not, they are further screwed by high housing prices. This housing ponzi has to be stopped. Vote opposition.
The big question would be can salary increase outpace the lending rates in coming decades in a mature economy?
Japan, US, UK and even the Swiss face stagnant wages.
Loans default or market drop will be the trend.
Should the govt sell land (hdb) to individuals at a fire-sale price ?
Is this good guardianship of taxpayer's money ? I would expect my govt to sell land at what it could fetch at market, and then discount it for citizens. If govt were to sell below market to individuals, money which would have gone to govt reserves to fund the general population needs like welfare and infrastructure, wouldn't it be short changing the public ?
Something wrong keep increasing the populations, from 2 millions to 5.3 millions, to 6.9 millions, then to 10 millions?
QUOTE
If govt were to sell below market to individuals, money which would have gone to govt reserves to fund the general population needs like welfare and infrastructure, wouldn't it be short changing the public ? UNQUOTE
March 22, 2013 11:15 pm
Wah! Sound so nice.
As if the govt reserves will be used on welfare and infrastructure.
When we ask for help.
The PAPigs will say "where is the money going to come from?"
Get this straight.
The Singapore Reserves are not meant for the benefit of Singaporeans.
QUOTE:
CEO of HDB doing budget? Then what does the CFO do? What do the accountants do? Shake legs and wash toilets? UNQUOTE
March 22, 2013 1:43 pm
The CFO does the bidget based upon what the CEO wants to do.
And how will CEO of HDB decide if he does not know the cost?
If CEO of HDB does not know the cost of HDB flats, then how to decide what is the price?
If CEO of HDB does not know the cost of HDB flats.
Then how does he know whether he is selling HDB flats at a "subsidized" price?
Are you talking about a coffeeshop CEO or a 'char kway teow' boss?
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