How much are you earning per annum?

[Wiseman1]

Originally Posted by Unregistered

We are a small family. My wife and I earns a decent salary, average by Singapore's standards. Our annual income combined is only about $140,000. We managed to flip our BTO flat, making a profit of $400,000. We use the profit as downpayment for our new condo in Jurong. The BTO scheme is excellent in helping middle income families like ours to live in our dream condo.

I would say u are short sighted and your analogy is precisely the greater fool theory. Did it not occur to you that your kids would be the ones paying dearly for your so called flip profits in the end, if you do have kids???? This is what is happening in Silly-pore, every successive generation is ploughing more and more money into bricks and motars like there is no tomorrow, hoping to reap a quick handsome profit. In the process, property prices are driven sky high. Someone gonna pay for all these in the end, and they would be your kids and grandkids....

Originally Posted by Wiseman1

I would say u are short sighted and your analogy is precisely the greater fool theory. Did it not occur to you that your kids would be the ones paying dearly for your so called flip profits in the end, if you do have kids???? This is what is happening in Silly-pore, every successive generation is ploughing more and more money into bricks and motars like there is no tomorrow, hoping to reap a quick handsome profit. In the process, property prices are driven sky high. Someone gonna pay for all these in the end, and they would be your kids and grandkids....

You should stop using your moniker as you are up to it. Obviously you are too thick. You have no clue how the world works.

Originally Posted by Unregistered

You should stop using your moniker as you are up to it. Obviously you are too thick. You have no clue how the world works.

Actually, I agree fully with Wiseman's points. He makes it in, obviously, a pretty blunt manner, in a tone that may be uncalled for, but the content is sensible.

Look, its a bit of a house of cards now:
- When people are making $400k from flipping their HDB flat, you are creating an artificial housing market.
- They buy a $1mn condo, and they are only financing $600k from salary ($400k from equity gains) --> that's why all the price to income ratios in Singapore are out of whack
- This phenomena artificially inflates HDB resale prices as well.
- Then BTO HDB prices were pegged to resale prices and not to salary *slaps head*
- That's why if you ask your parents and grandparents, most paid off their HDB flats within 10-yrs last time--> Now, people hold on to their mortgage for 20-30 years
- This whole system worked very well when we were moving from 3rd world to first, when salaries were increasing very quickly, when interest rates were coming down --> even though housing prices were increasing quickly, the younger folks could afford it because of quickly increasing salaries
- Now, we are at all time low interest rates and pretty stagnant salaries, this system is a political timebomb

You and stupidman (not wiseman for sure) are clearly fools. The BTOs prices are sold too low, with huge subsidies given. That is why people can flip and make $400k profits. Not impossible. So that's the problem. The solution is to sell BTOs are double their current price so there is less incentive for people to flip and upgrade to a condo. Then they can happily pay their HDB mortgage over 25 years.

Originally Posted by Zhang

Actually, I agree fully with Wiseman's points. He makes it in, obviously, a pretty blunt manner, in a tone that may be uncalled for, but the content is sensible.

Look, its a bit of a house of cards now:
- When people are making $400k from flipping their HDB flat, you are creating an artificial housing market.
- They buy a $1mn condo, and they are only financing $600k from salary ($400k from equity gains) --> that's why all the price to income ratios in Singapore are out of whack
- This phenomena artificially inflates HDB resale prices as well.
- Then BTO HDB prices were pegged to resale prices and not to salary *slaps head*
- That's why if you ask your parents and grandparents, most paid off their HDB flats within 10-yrs last time--> Now, people hold on to their mortgage for 20-30 years
- This whole system worked very well when we were moving from 3rd world to first, when salaries were increasing very quickly, when interest rates were coming down --> even though housing prices were increasing quickly, the younger folks could afford it because of quickly increasing salaries
- Now, we are at all time low interest rates and pretty stagnant salaries, this system is a political timebomb

Originally Posted by Unregistered

You and stupidman (not wiseman for sure) are clearly fools. The BTOs prices are sold too low, with huge subsidies given. That is why people can flip and make $400k profits. Not impossible. So that's the problem. The solution is to sell BTOs are double their current price so there is less incentive for people to flip and upgrade to a condo. Then they can happily pay their HDB mortgage over 25 years.

Agree 100%. BTO is supposed to be public housing to subsise the poor. Now it becomes some sort of money making machine for PMEs who temporary park their money there for 5 years then make a killing by flipping. This whole system is broken.

Minister Khaw has finally realised that, so there is now talk to make HDB into "real" subsidise flats which are much cheaper, but have shorter lease and cannot be sold in the open market. Other HDB schemes like DBSS/EC that are not really subsidised will be sold at higher price, but can be openly traded in the market.

Originally Posted by Unregistered

You and stupidman (not wiseman for sure) are clearly fools. The BTOs prices are sold too low, with huge subsidies given. That is why people can flip and make $400k profits. Not impossible. So that's the problem. The solution is to sell BTOs are double their current price so there is less incentive for people to flip and upgrade to a condo. Then they can happily pay their HDB mortgage over 25 years.

My primary point is that both primary sale and resale prices are too high.

The rate of increase is not sustainable because salaries are not going up so quickly and interest rates can only go up.

This means that someone will be left holding the baby.

Having young couples service 25 to 30 year mortgages just to afford the monthly payments, in the lowest interest rate environment in history, is lunacy and a recipe for disaster.

The solution? Build more flats, as quickly as possible, and address the demand supply inbalance.

Increasing bto prices on the other hand, solves nothing. You are not even in the ball park of an intelligent conversation.

Actually, it's pretty amazing to me how we can both be seeing the same problem (outsized gains from BTO flippers artificially inflating the property market) and come to totally different conclusions as to the root causes, even though we are both Singaporeans who have seen the same developments in the market !

Not to beat a dead horse (but rather to put a dead horse argument to sleep), but clearly your proposed solution of increasing BTO prices have been tried empirically and has failed.

You would remember that for many years the govt actually pegged the BTO prices to resale prices, and that led to a dramatic increase in BTO prices when resale prices went sky high (due to supply demand imbalance).

The fact that BTO prices went up did not impede the resale prices at all, nor did it prevent people from flipping the BTOs for big profits once the resale prices went up.

So the root cause is CLEARLY not BTO prices (which should be driven by price to income considerations) but resale prices (which are driven by supply demand considerations).

To take your argument to the [illogical] extreme, if resale prices went up another 100% hypothetically, your solution would be to increase BTO prices 100% again (even though price to income is totally nonsensical at those levels) ?

All I can say is, I'm glad you aren't my policy maker.

Originally Posted by Unregistered

You and stupidman (not wiseman for sure) are clearly fools. The BTOs prices are sold too low, with huge subsidies given. That is why people can flip and make $400k profits. Not impossible. So that's the problem. The solution is to sell BTOs are double their current price so there is less incentive for people to flip and upgrade to a condo. Then they can happily pay their HDB mortgage over 25 years.

Zhang, you sound as stupid as stupidman. Building and building new property will create oversupply and eventually crashing the market. If the property market crash, we will have a financial crisis, the banks will go bankrupt and you will be the first to be fired for your stupidity. The demand for property today is very much speculative. People buying second property for investment. People buying cheap BTO to flip. Even parents helping their children to buy BTO to flip even though the family already own multiple properties. So, that is why we have to stop all these non genuine demand by increasing the price of BTO flats so only those who really need a place will apply. Or else, change policy such that whoever sell their BTO after MOP can only sell to HDB at the cost price. So, in this case, there is no flipping intention and demand will definitely fall. Only those who buy to stay will apply.

Well let's focus on what we agree on. I agree that restricting BTO buyers to selling back to HDB will resolve this issue, but its politically unworkable.

People want their cake and eat it too. Everyone complains about high HDB prices, but the one solution that will guarantee them cheap house prices, everyone rejects because everyone wants to sell their BTO for a $400k profit.

On increasing BTO prices, I have said my piece and you haven't convinced me, so we agree to disagree. I maintain that when you see a bubble, you should prick it, and try to prevent the air from coming out too fast. You let to burst itself and you may land up like Spain, Ireland, Iceland, US and countless others.

Those who do not history's mistakes are doomed to repeat them.

Sitting behind an anonymous screen and typing out insults is not the most mature of activity, so I will refrain from this.

Good day to you.

Originally Posted by Unregistered

Zhang, you sound as stupid as stupidman. Building and building new property will create oversupply and eventually crashing the market. If the property market crash, we will have a financial crisis, the banks will go bankrupt and you will be the first to be fired for your stupidity. The demand for property today is very much speculative. People buying second property for investment. People buying cheap BTO to flip. Even parents helping their children to buy BTO to flip even though the family already own multiple properties. So, that is why we have to stop all these non genuine demand by increasing the price of BTO flats so only those who really need a place will apply. Or else, change policy such that whoever sell their BTO after MOP can only sell to HDB at the cost price. So, in this case, there is no flipping intention and demand will definitely fall. Only those who buy to stay will apply.

I think people has a misconception here that as long as a bubble is not pricked, we can pretend that the problem does not exist and can afford to let the bubble blow up even bigger.

The problem is that the bigger the bubble grows , the larger the damaging effect when it burst later. Ideally, the gov should try to prevent any bubble but if that is not possible, then the next best will be to prevent the bubble from getting bigger by slowly releasing the hot air inside.