Our Houses Aren't As Affordable As HDB Says

I forgot, you should add in the 14.5% employers’ contribution monthly before you multiply by 12, then add the bonus, don’t forget your bonus also have 14.5% employers’ CPF contribution

handsome: yes you are right. i guess i was saying that i would look at my household disposable income before deciding on how much of that i would commit to a housing loan. i also forgot to mention that it’s cash commitment after the CPF for housing.
Another more important factor for me is how long the commitment will be.

[Husky]

Originally Posted by nohouse

HDB will use reasons like market-based pricing to justify this. i think the real reason is they don’t want singaporeans to feel poorer. maybe the election is coming. but in my opinion this is unhealthy.

As a person who is having a huge problem getting a flat, you can be sure I am not going to vote for the ruling party come election time.

Their logic is so flawed. They don't build enough flats causing demand to build up and resale prices shoot up as a result. Then they tell you oh, they gotta price the new flats based on market prices of resale flats. Complete BS if you ask me!

Originally Posted by nohouse

it is a bubble. when stronger forces of supply and demand come into play, and when the government realize it can’t continue with artificially protecting the people’s interest (and its own interest), the bubble will burst.

It is definitely a bubble. But will the bubble burst? If so when? I am getting more and more fustrated as the days go by. Maybe one day you will see me protesting outside Parliment.

Originally Posted by Husky

As a person who is having a huge problem getting a flat, you can be sure I am not going to vote for the ruling party come election time.

Their logic is so flawed. They don't build enough flats causing demand to build up and resale prices shoot up as a result. Then they tell you oh, they gotta price the new flats based on market prices of resale flats. Complete BS if you ask me!

It is definitely a bubble. But will the bubble burst? If so when? I am getting more and more fustrated as the days go by. Maybe one day you will see me protesting outside Parliment.

Have you considered getting a smaller flat and/or staying further away from city? If not, why not?

I'm asking, cos this is the first question the government or your MP will ask when you complain to them (or protest outside Parliament).

[Husky]

Originally Posted by Unregistered

Have you considered getting a smaller flat and/or staying further away from city? If not, why not?

I'm asking, cos this is the first question the government or your MP will ask when you complain to them (or protest outside Parliament).

That's beside the point. Asking people to buy smaller flats or flats further away from the City doesn't solve the problem of escalating property prices. It's sweeping the dirt under the carpet. What's one to do when even small property become unaffordable? Ask people to pitch tents at East Coast park? This is what I will tell them if they ask me this question.

But to answer your question, I can't apply for 3 room or smaller flats cos the of the household income ceiling of $4,000.

As for proximity to the city, my financee's parents stay at Outram. I am hoping to get a flat near to them.

Originally Posted by Husky

That's beside the point. Asking people to buy smaller flats or flats further away from the City doesn't solve the problem of escalating property prices. It's sweeping the dirt under the carpet. What's one to do when even small property become unaffordable? Ask people to pitch tents at East Coast park? This is what I will tell them if they ask me this question.

But to answer your question, I can't apply for 3 room or smaller flats cos the of the household income ceiling of $4,000.

As for proximity to the city, my financee's parents stay at Outram. I am hoping to get a flat near to them.

Then they'll just say you're being choosy, the same way they do to people who can't find jobs ("why don't you be toilet cleaner or road sweeper?").

I'm just playing devil's advocate.

[Husky]

Originally Posted by Unregistered

Then they'll just say you're being choosy, the same way they do to people who can't find jobs ("why don't you be toilet cleaner or road sweeper?").

Then I will tell them, I am going to take 30 years to finance that damn thing, and I don't have a right to be a little choosy? You think buy vegetables in market ah, not nice throw away.

I would love to see some of our ministers move into some of those so called areas you can get if you are not choosy.

Originally Posted by Unregistered

I'm just playing devil's advocate.

I figured so. No worries, it's good practice for me. Just in case I get invited to debate them on national television.

Are flats too pricey or buyers too choosy

Experts advise buyers to keep an open mind in terms of location, size

Mr Jason Zheng is getting married next month, but he and his fiancee have yet to find a place of their own.

The 27-year-old IT consultant does not want to wait three years for a new flat but has been priced out of the resale market due to the current property rally.

Sellers have been asking for cash of up to $60,000 above valuation, which he cannot afford.

He also struck out twice at the Housing Board’s half-yearly sale where most of the units on offer are completed.

His dilemma is not unique. In the past month, at least 15 people have written to The Straits Times Forum, venting their frustrations over escalating prices, premiums over official valuations and a perceived undersupply of HDB flats.

But have buyers really encountered a wall when it comes to housing options?

Or is it also a matter of some people being too choosy and unrealistic in their expectations?

National Development Minister Mah Bow Tan urged buyers to take a bigger view in Parliament last Monday. For a household that earns $4,000 a month, he said the options might be:

~ A new five-room flat in Punggol or Woodlands;
~ A resale five-room flat in Woodlands;
~ A four-room flat in a popular estate like Tampines; or
~ A three-room flat in a mature estate like Toa Payoh.

Those in the industry agree that buyers can be narrowly focused.

PropNex chief executive Mohamed Ismail observes that couples are often reluctant to live in the outskirts and want flats in certain good locations where they can move in immediately.

But these places – like Bukit Merah, Tiong Bahru and Clementi – command a high price.

A four-room flat in Toa Payoh can cost up to $535,000 while one in Woodlands is priced less than $250,000.

Agent D. Lim said newlyweds often insist on getting flats near their parents’ homes even though the latter may live in mature, pricey estates.

MPs interviewed said they have seen cases where couples turn down new HDB flats because the location was not ‘prime’ or the unit was on a low floor.

East Coast GRC MP Jessica Tan explained: ‘They have preferences, and since a flat is not a small investment, these people tend to be more choosy.’

MPs said newlyweds often go to them for help in getting a home, urging them to intercede with the HDB.

Certainly, housing is a hot issue, especially when prices are climbing.

Last Monday, in Parliament, Mr Mah assured the public that HDB flats remain affordable, noting that eight in 10 Singaporean households qualify for various grants. Still, prices of HDB resale flats are at a historic high, reversing from a first quarter dip of 0.8 per cent to a 1.4 per cent rise in the second quarter.

There is also the rising COV, or cash over valuation. This is the premium which sellers demand over the official valuation.

COV amounts reportedly doubled in July this year to about $10,000 to $15,000 for five-room and executive flats, from a median level of $5,000 in the second quarter.

MPs and industry experts said those most affected are first-time buyers – usually couples unsuccessful in getting build-to-order (BTO) flats and who cannot afford resale flats.

Currently, the HDB uses the BTO system, introduced in 2001. Eligible buyers can apply for flats in their preferred locations from specific projects launched.

It takes about three to four years for the units to be built. Construction will start after a majority of flats are booked.

Previously a queue system, where flats had already been tendered for construction when offered to applicants, was used. Though the system assured buyers of a flat when their turn was due, it did not provide a real gauge of demand as applicants could drop out at will.

This resulted in an oversupply of about 20,000 flats when the Asian financial crisis hit in the late 1990s. The stock was cleared only in 2007.

Now, flats not booked under BTO, surpluses from the Selective En bloc Redevelopment Scheme, surrendered flats or cancelled bookings are made available in balloting exercises as well as half-yearly sales.

To meet increasing demand, HDB said it will offer 8,000 or more BTO flats this year. This compares to 2,400, 6,000 and 8,000 in 2006, 2007 and last year respectively.

A spokesman added: ‘The majority of first-time applicants have a chance to select a BTO flat within two tries.’

Given the realities today, industry experts advise buyers to keep an open mind on where to live and the size of the flat.

KF Property Network’s general manager Tony Koe recommends that young couples without extra cash should look for units on the fringe of places like Woodlands and Choa Chu Kang, where prices are more in tandem with valuation.

MP Lim Biow Chuan (Marine Parade GRC) also warns couples against overstretching their finances.

‘A lot of people are now living on credit; when you buy a large flat and put yourself on a long-term financial commitment, what is going to happen if you are retrenched or fall sick?

Source : Straits Times, 20 Sep 2009

http://business.asiaone.com/Business...21-169054.html

Originally Posted by Husky

That's beside the point. Asking people to buy smaller flats or flats further away from the City doesn't solve the problem of escalating property prices. It's sweeping the dirt under the carpet. What's one to do when even small property become unaffordable? Ask people to pitch tents at East Coast park? This is what I will tell them if they ask me this question.

But to answer your question, I can't apply for 3 room or smaller flats cos the of the household income ceiling of $4,000.

As for proximity to the city, my financee's parents stay at Outram. I am hoping to get a flat near to them.

I personally feel that public housing in "prime" areas are ridiculously priced now but I think it is a problem that is limited to those area (I stay in one of those area so I not complaining =P). But then how to solve your problem?

The solution you want is
1) The flat must be in prime area (Outram as your future in laws are there)
2) It must be affordable for you
3) It must be larger then 3 room (due to your income)

The only way for govt to meet your expectation is to artificially lower the value of property in prime area by perhaps:
1) Flooding the market with supply and mind you it must be only in those prime area, maybe by tearing all the existing Outram flats and building 80-100 stories housing to replace them thereby tripling available housing.
2) Make the location undesirable by either building a rubbish dump right smack in the middle or moving the red light district there
3) Remove all existing amenities and make them similar in term of estate maturity to new estates.

This is not meant to be inflammatory, I'm trying to draw your attention to the dilemma. You can be choosy but being unrealistic and complaining about facts will not change it.
Now if those CCR condo can only come down to 1200PSF then I can afford it, time to complain to my MP about that.

[Husky]

Originally Posted by Strange

This is not meant to be inflammatory, I'm trying to draw your attention to the dilemma. You can be choosy but being unrealistic and complaining about facts will not change it.
Now if those CCR condo can only come down to 1200PSF then I can afford it, time to complain to my MP about that.

Nah. I don't find your post inflammatory or offensive in any way just very pragmatic.

To be honest, I know there are very little options left and what are they. Just feeling very fustrated with the government for trying to gloss over the issue.

Even if I were to get a new flat at some ulu area, it's not cheap and supply is also rather limited. They claim new flats are priced taking into account the market conditions of resale flats. But why the hell did resale flat prices suddenly surge up suddenly over the last two years in the first place?

Cos they didn't build enough flats! The BTO thing didn't work out as they hoped. Then they try to distort the numbers and paint a rosy picture of themselves.