Solution to solve rising HDB prices

[Wind30]

I have a suggestion about HDB prices. What do you guys think?

 

Just let PRs buy new HDB flats from HDB without or much less subsidies.

 

The main problem with the current HDB fiasco is that HDB thinks that the BTO is a good system that can react to demand easily and adjust supply accordingly. However they let out the millions of PRs who also need to buy HDB. This demand is not accounted for by HDB and it just spill over to resale and pushing up the retail prices of HDB. The resale supply is kind of fixed and the only way to increase resale supply is by pushing up the prices so you entice owners to sell their HDB. This is very bad as HDB prices will just go up and up.

 

The day the HDB allows PRs to buy new flats, I think the HDB prices will stabilize. This solves the problem and yet allow HDB flat prices to be market priced and not artificially controlled. We still have a willing buyer willing seller market but the main difference is that the supply is much more responsive to demand changes, not just citizen but also PRs. Artificially controlling the HDB prices will have a lot of problems in creating different classes of citizens, etc.

Edited January 30, 2010 by Wind30

[Watwheels]

IMO there's no real solution to kerb rising prices of property here in sg. Unless Sgp has become an unattractive place to work and stay. The same trend you will see in places like Bangkok & Shanghai. The trend of rising property prices comes at no surprise. To the gov it's good as it reflects the economy but not for the ppl who's looking to stay.

 

I believe the attractiveness of Sgp to work & stay for foreigners will reach a stagnant point cos Sgp market is only so small. And so is our limited land.

[Lv3338]

but allow them to buy for 1st hand...

this will allow them to speculate and sell for resale market...

eventually those ah tong will make money from the local...and go back..with the $$$....shiok shiok

if they buy higher..... naturally they will sell higher...too...

 

the property market now is more of demand and supply....

[Trex101]

Basically HDB is like COE, it's all about supply and demand. If HDB can constantly supply HDB for example 5rm at 200k, i don't see why ppl would want to buy resale 400k for it.

The problem now is supply cannot meet demand, even worst is they HDB peg their new HDB price to resale value. This itself create a vicious cycle.

 

- resale value raise due to high demand.

- new HDB price raise because it is peg to resale value.

 

It's a fundamental policy failure, the problem can never be solved without removing "New HDB price peg to resale" & increase supply issue.

[Wind30]

Basically HDB is like COE, it's all about supply and demand. If HDB can constantly supply HDB for example 5rm at 200k, i don't see why ppl would want to buy resale 400k for it.

The problem now is supply cannot meet demand, even worst is they HDB peg their new HDB price to resale value. This itself create a vicious cycle.

 

- resale value raise due to high demand.

- new HDB price raise because it is peg to resale value.

 

It's a fundamental policy failure, the problem can never be solved without removing "New HDB price peg to resale" & increase supply issue.

 

that is the problem. HDB got the demand numbers ALL WRONG. They say they are catering to citizens need by BTO and almost all citizens can get a flat after a few tries. By restricting new hdbs to citizens only you are preventing the free market from working and all the PR demand are channeled into the resale market. Lets put it this way, resale market only have that many units. If uncle A will not sell at 300k, the only way to entice him to sell (increase supply) is to raise the price to 350k.

 

That is the problem. HDB have turned a blind eye totally to the demands of the PRs.

 

There ARE A LOT of problems by artificially setting the prices of HDB. I have repeated them over many many times. and I will repeat them again.

 

errr.... are you SURE you want to spend 200k on your HDB when it is going to worth 200k 20 years from now? I thought this is so obvious and yet I see suggestion after suggestion asking HDB to fix the price of HDB. To put it in the words of MM, are singaporeans so "Daft"? Imagine uncle A buy big HDB at 400k today and uncle B buy a SMALL condo at 500k. 20 years later, the condo price is worth 800k and your HDB is still 400k. All the HDB owners will be ROYALLY SCREWED by this policy. It is so obvious isn't it?

 

That is why any solution should let HDB price the flats at market rate. But the market in this case is NOT EFFICIENT enough because we have only ONE SUPPLIER and that supplier is IGNORING the demand of PRs.

 

 

[Wind30]

but allow them to buy for 1st hand...

this will allow them to speculate and sell for resale market...

eventually those ah tong will make money from the local...and go back..with the $$$....shiok shiok

if they buy higher..... naturally they will sell higher...too...

 

the property market now is more of demand and supply....

 

?? now they will be subjected to the same rules and regulation like staying for x number of years. AND they will not receive the market subsidy for citizens only.

 

It is hard to speculate HDB. If the PRs can sell for a profit after x number of years staying there, then this SHOULD not be an problem as citizens who bought at the same time as them would have made an even bigger profit due to the subsidy.

 

What makes you think they can sell higher? Who will buy from them? Citizens? Citizens can buy with a market subsidy and you think we will be stupid enough to buy a resale flat from a PR with markups? Other PRs? Maybe but now they can buy new from HDB so at least PRs are no longer FORCED to buy in the resale.

 

The problem now in Singapore is if you are a PR, you HAVE to pay COV. Citizens think why do we care, but the problem turns around and bite us when HDB price the new flats higher because PRs paid higher for resale.

 

I agree that it is more of a supply and demand issue. And the main problem is HDB is ignoring the demand coming from PRs. When this is a monopoly and such things happen, what can you expect other than price increases?

Edited January 30, 2010 by Wind30

[Scoots]

I have a suggestion about HDB prices. What do you guys think?

 

Just let PRs buy new HDB flats from HDB without or much less subsidies.

 

The main problem with the current HDB fiasco is that HDB thinks that the BTO is a good system that can react to demand easily and adjust supply accordingly. However they let out the millions of PRs who also need to buy HDB. This demand is not accounted for by HDB and it just spill over to resale and pushing up the retail prices of HDB. The resale supply is kind of fixed and the only way to increase resale supply is by pushing up the prices so you entice owners to sell their HDB. This is very bad as HDB prices will just go up and up.

 

The day the HDB allows PRs to buy new flats, I think the HDB prices will stabilize. This solves the problem and yet allow HDB flat prices to be market priced and not artificially controlled. We still have a willing buyer willing seller market but the main difference is that the supply is much more responsive to demand changes, not just citizen but also PRs. Artificially controlling the HDB prices will have a lot of problems in creating different classes of citizens, etc.

 

My opinion is:

 

1. Only citizens should be allowed to buy direct from HDB.

2. HDB's prices should be much much lower (ie REALLY sibsidized and not market rate less discount)

3. HDB to build enough for citizens, such that citizens do have the option of getting from HDB in a reasonable amount of time. Thing to note is: We also have to discount the complains by citizens about location

too far, not good, too much sun, no sea view .... such people's unrealistic reasons for rejecting new HDB flat's is basically they cannot find the "best-est" cheap public housing

 

PRs shouldn't be allowed to buy from HDB. As it is, getting PR-ship is so easy. If they are allowed to buy from HDB direct, the prices may stabilise as you say, but it's definitely going to stabalise at the much higher values. (demand pool increase, supply pool not keeping pace)

 

 

 

[Joseph22]

My opinion is:

 

1. Only citizens should be allowed to buy direct from HDB.

2. HDB's prices should be much much lower (ie REALLY sibsidized and not market rate less discount)

3. HDB to build enough for citizens, such that citizens do have the option of getting from HDB in a reasonable amount of time. Thing to note is: We also have to discount the complains by citizens about location

too far, not good, too much sun, no sea view .... such people's unrealistic reasons for rejecting new HDB flat's is basically they cannot find the "best-est" cheap public housing

 

PRs shouldn't be allowed to buy from HDB. As it is, getting PR-ship is so easy. If they are allowed to buy from HDB direct, the prices may stabilise as you say, but it's definitely going to stabalise at the much higher values. (demand pool increase, supply pool not keeping pace)

 

Isn't this what is going on currently.

[Wind30]

My opinion is:

 

1. Only citizens should be allowed to buy direct from HDB.

2. HDB's prices should be much much lower (ie REALLY sibsidized and not market rate less discount)

3. HDB to build enough for citizens, such that citizens do have the option of getting from HDB in a reasonable amount of time. Thing to note is: We also have to discount the complains by citizens about location

too far, not good, too much sun, no sea view .... such people's unrealistic reasons for rejecting new HDB flat's is basically they cannot find the "best-est" cheap public housing

 

PRs shouldn't be allowed to buy from HDB. As it is, getting PR-ship is so easy. If they are allowed to buy from HDB direct, the prices may stabilise as you say, but it's definitely going to stabalise at the much higher values. (demand pool increase, supply pool not keeping pace)

 

err... if you don't let PR buy from HDB, they will just buy in resale. The demand is still there. What is worse is that HDB everyday keep saying their supply is enough, every citizen can buy a flat in a few tries. Why should the supply not keep pace???? HDB can build LOTS of flats as they have shown in the past. Why will the price go higher?? The trick to this problem is that HDB is pricing the new flats to resale prices. By shifting the demand from resale to new flats, I am 99% sure the prices of the HDB will not go up so fast. HDB will not have an excuse not to build more flats when the DEMAND is so obvious. And when the resale prices drop, they have no excuse to price it any higher.

 

There are very good arguements for pricing the new HDB flats to market (resale) prices as there just isn't another better way of pricing it if you THINK about it. A true solution be free market oriented

[Whatupz]

crap ideas LOL

[Vextan]

reading this thread, it makes me realise that singaporeans are never able to be pleased, and they look at things from their own narrow perspective and start criticising in any possible way. no wonder foreigners who are less endowed as us say we are spoilt.

[Wilson108]

reading this thread, it makes me realise that singaporeans are never able to be pleased, and they look at things from their own narrow perspective and start criticising in any possible way. no wonder foreigners who are less endowed as us say we are spoilt.

 

 

 

i think u r not affected by all tis n tat why u can talk like tis....

[Civicblade]

Pegging new flat prices to the resale market is the cause of the upwards price spiral.

 

New flat prices should be determined by cost of land, cost of construction and general income level of families buying new flats. New flat prices must be priced at a level that is much more attractive (or reasonable) than what it is today. This pricing mechanism must also take into consideration that new flats has its limitations such as 5 year leasing period, 4-5 years wait for BTO and lack of amenities etc.

 

This way, new flats in satellite towns can be priced much cheaper than it is today and demand for flats in mature area will come down.

 

Although I am against the ridiculous inflation of public housing prices in Singapore (public housing is meant to stay affordable in real terms.. not in the government's terms), I hope that young Singaporeans realise these 2 things:

 

1) Singapore is a small place, staying in new estates in not going to kill you. It just takes more time to commute to work. Don't jump in on the bandwagon of resale market hype with the PRs and new Citizens.

2) You can change things. Every 4.5years there is a thing called General Election. This is the best time for you register your displeasure and pressure the government to do things for you.

Edited January 30, 2010 by Civicblade

[Jamesgetz]

before we all start crying foul that expensive flats is a bad thing, remember that there are a lot of existing HDB home owners out there. if new flats become plentiful and cheap, who will want to buy resale flats? too many new, cheap flats will cause all HDB flats to fall in value and cause existing flat owners (which far outnumber new flat seekers) to suffer.

 

the best scenario is for HDB flats to appreciate gradually which will allow existing flat owners to increase their asset value. this is critical as most S'poreans have substanstial savings tied up in HDB flat. at the same time, new flat owners can still afford to buy flats. that's why the HDB would rather slowly play catch-up with demand rather than oversupply.

 

my sympathy goes to the next generation who may soon face $1mil HDB flat. so what's the solution? make sure they do well in the society and earn enough to be able to afford a flat.

Edited January 30, 2010 by Jamesgetz

[Civicblade]

Right.

 

Singaporeans must realise that allowing hdb resale market to function as a completely free market based on demand and supply is a good thing.

 

This allow home owners choice to stay or sell and use their flats as an asset (or liquidity) and leverage in any kind of situation.

 

Singaporeans should instead take the government to task on why new flats must be pegged to the resale market. That new flat prices should be priced on its own mechanism and should be much lower than what it is today. Afterall, it is a "public" subsidized housing. I just don't see how new flats are subsidized in any way today.

 

reading this thread, it makes me realise that singaporeans are never able to be pleased, and they look at things from their own narrow perspective and start criticising in any possible way. no wonder foreigners who are less endowed as us say we are spoilt.

 

[Civicblade]

Why should Singaporeans be sucked into the resale market? There is no need to open the doors of new subsidized housing to PRs. New flats should always only be available to citizens only.

 

We should instead pressure the government to lower new flats price for citizens.

 

Let PRs and those who want flats in matured estate do their free market transactions in the resale arena. There is no need to control prices there.

 

Prices however, must be control and be really affordable for families buying new flats.

 

that is the problem. HDB got the demand numbers ALL WRONG. They say they are catering to citizens need by BTO and almost all citizens can get a flat after a few tries. By restricting new hdbs to citizens only you are preventing the free market from working and all the PR demand are channeled into the resale market. Lets put it this way, resale market only have that many units. If uncle A will not sell at 300k, the only way to entice him to sell (increase supply) is to raise the price to 350k.

 

That is the problem. HDB have turned a blind eye totally to the demands of the PRs.

 

There ARE A LOT of problems by artificially setting the prices of HDB. I have repeated them over many many times. and I will repeat them again.

 

errr.... are you SURE you want to spend 200k on your HDB when it is going to worth 200k 20 years from now? I thought this is so obvious and yet I see suggestion after suggestion asking HDB to fix the price of HDB. To put it in the words of MM, are singaporeans so "Daft"? Imagine uncle A buy big HDB at 400k today and uncle B buy a SMALL condo at 500k. 20 years later, the condo price is worth 800k and your HDB is still 400k. All the HDB owners will be ROYALLY SCREWED by this policy. It is so obvious isn't it?

 

That is why any solution should let HDB price the flats at market rate. But the market in this case is NOT EFFICIENT enough because we have only ONE SUPPLIER and that supplier is IGNORING the demand of PRs.

 

[Galantspeedz]

i try to ans both your posts from my point of view....

 

if new flats are not pegged to resale flats than the resale flats price will not move and if dun move, hard to keep up with growth..... there is also alot of money creation involved also it will not give new buyers the incentives to buy resale so those that bought flats will most probably have to live in it all their lives... from what i see not many is willing to do that....

 

this also give alot of sgporeans a chance to earn some cash that they will not be able to save up maybe all their lives... and also thats why pay now is also more than last time, maybe not moving at the same pace as inflation but at least it still move, in the short run our purchasing power may be lesser but i think it is good for the long run.... look at how much people are collecting for rental now as compared to 2-3yrs ago.... the question is, are you willing to scarifice your privacy or maybe even move back to stay with parents....

 

i think is good because this will provide some form of income for those that may not be finanically sound at the moment

[Jamesgetz]

http://www.channelnewsasia.com/stories/sin...1034246/1/.html

 

those in tampines who are not happy with the way HDB has been run, speak with your votes... this was the same minister who was originally tasked to bring S'pore to World Cup 2010, attended tons of Tiger beer functions (not sure doing what)... Last yr, we can't even win the SEA games gold for football