Our Houses Aren't As Affordable As HDB Says

[Husky]

The two relatively long post before this can be summarised in three words, Don't Be Picky. Incidentally that is the nick of the poster for both articles.

I have but three questions which I hope don't be picky can address. Don't be a drive by poster...

1) When buying something that takes up to thirty years to finance, is it wrong to be a little picky?

2) What exactly is the objective of removing first timer piority for applicants who has rejected a flat twice? It seems more like a measure to "force" people to take up a less than desirable flat than to ensure people with urgent need will be able to secure a flat.

3) Exactly what are we to the decision makers? Animals that they try to stuff into pigeon holes? Just make sure every pigeon has it own hole. Whether they like the hole they are assigned to or not is not important. What is important is, we can achieve a high success rate of filling them up into holes.

My last point is not exactly a question but more of a wish. I think it will be interesting to see some of these top brass stay in public housing for a while. Perhaps they can understand the situation on the ground a little better if they could really come down to our level. Being high up there in a control tower, it's not hard to imagine how we look to them. Cattle that they try to force into their respective pens...

[lerevenant]

I am not a mouth piece of the Government but would like to share my own experiences

I bought my Jurong West 5-rm in 2005 at a price of $170k. My spouse and I were also hoping to stay near our parents (Tampines and Ang Mo Kio) but we just couldn't afford flats in these matured estate. We talked it through and eventually decided that we will go ahead with the Jurong West flat because it means less financial demand on both of us, and we can clear the loan much quicker. Since then, we have been paying the installment with our CPF with no cash outlay. In fact at this moment we have enough cash savings on hand to clear the loan but since the interest rate HDB loan is lower than that of inflation, it is silly to redeem a "positive loan". We are using the cash for investment. The flat is valued at $410k today.

My spouse and I often reflect on how different will life be if we insisted on buying a resale in the matured estate. Yes, we will be close to our parents, but the quality of life will much lower. If we had bought a flat in those estate, we will been able to afford a car today to bring our parents around. If we had bought a flat in those estate, we will not have the cash savings we have today to generate more income. If we had bought a flat in those estate, we would continue to be slaves to our 30 year loan for the rest of our lives.

My advise to my peers looking to buy a flat is to just go for the cheapest you can find. While staying close the parents is a good thing, the cost of it is not worth it if it means paying so much more for a flat. As the saying goes "A flat is a flat is a flat". What is most important is the "Home" that you build using the flat as a resource.

Husky, i understand that since there will be a 30 years commitment, you would want to choose something ideal (even though it may be expensive). But why not consider something cheaper which you can clear in 15 years even if it means staying further away from parents. The money you save can be plowed to give your parents more allowance and give yourself a lighter financial load.

[Husky]

Originally Posted by lerevenant

I am not a mouth piece of the Government but would like to share my own experiences

I bought my Jurong West 5-rm in 2005 at a price of $170k. My spouse and I were also hoping to stay near our parents (Tampines and Ang Mo Kio) but we just couldn't afford flats in these matured estate. We talked it through and eventually decided that we will go ahead with the Jurong West flat because it means less financial demand on both of us, and we can clear the loan much quicker. Since then, we have been paying the installment with our CPF with no cash outlay. In fact at this moment we have enough cash savings on hand to clear the loan but since the interest rate HDB loan is lower than that of inflation, it is silly to redeem a "positive loan". We are using the cash for investment. The flat is valued at $410k today.

My spouse and I often reflect on how different will life be if we insisted on buying a resale in the matured estate. Yes, we will be close to our parents, but the quality of life will much lower. If we had bought a flat in those estate, we will been able to afford a car today to bring our parents around. If we had bought a flat in those estate, we will not have the cash savings we have today to generate more income. If we had bought a flat in those estate, we would continue to be slaves to our 30 year loan for the rest of our lives.

My advise to my peers looking to buy a flat is to just go for the cheapest you can find. While staying close the parents is a good thing, the cost of it is not worth it if it means paying so much more for a flat. As the saying goes "A flat is a flat is a flat". What is most important is the "Home" that you build using the flat as a resource.

Husky, i understand that since there will be a 30 years commitment, you would want to choose something ideal (even though it may be expensive). But why not consider something cheaper which you can clear in 15 years even if it means staying further away from parents. The money you save can be plowed to give your parents more allowance and give yourself a lighter financial load.

Hi, thanks for sharing your story. I have actually considered all the above you mentioned. Currently, I am trying to ballot for a flat in the Oct exercise. Worked out my sums and decided that I should be able to (barely) afford a 4 room flat in say Bedok or Ang Mo Kio.

My main gripe is that the Government till date simply just refuses to address our real concern. Over the last 4 years, your flat "appreciated" 140%. Whether it's still affordable or not really depends on the yard stick we use to measure. If the Government persists on using their methods of calculation to argue that it's still affordable, there's really nothing much I can do.

But no matter which angle you look at, a 140% appreciation in the price of a flat over 4 years is worrying. I don't recall them ever admitting to that, nor offer any official explaination as to how that happened.

Originally Posted by Husky

Hi, thanks for sharing your story. I have actually considered all the above you mentioned. Currently, I am trying to ballot for a flat in the Oct exercise. Worked out my sums and decided that I should be able to (barely) afford a 4 room flat in say Bedok or Ang Mo Kio.

My main gripe is that the Government till date simply just refuses to address our real concern. Over the last 4 years, your flat "appreciated" 140%. Whether it's still affordable or not really depends on the yard stick we use to measure. If the Government persists on using their methods of calculation to argue that it's still affordable, there's really nothing much I can do.

But no matter which angle you look at, a 140% appreciation in the price of a flat over 4 years is worrying. I don't recall them ever admitting to that, nor offer any official explaination as to how that happened.

They can't do much now. Admitting fault will not help either (may very well be worse off). Problem now is that if drastic measures are taken to push down prices, many people will feel poor => not a good situation when election is so near. So they can only try their best to appease frustrated newcomers and just risk losing a few votes.

Inflation will be a major problem very soon if USD keeps losing ground. We can strengthen SGD or maintain it. Either way we are doomed: strengthen SGD => exports go down, maintain SGD => high asset inflation.

[Husky]

Originally Posted by Unregistered

They can't do much now. Admitting fault will not help either (may very well be worse off). Problem now is that if drastic measures are taken to push down prices, many people will feel poor => not a good situation when election is so near. So they can only try their best to appease frustrated newcomers and just risk losing a few votes.

You may be right. Then the poor dog becomes a sacrificial lamb with all his newly wed friends... They continue like this... they can be very sure 66% will become 33% soon.

Originally Posted by Husky

Hi, thanks for sharing your story. I have actually considered all the above you mentioned. Currently, I am trying to ballot for a flat in the Oct exercise. Worked out my sums and decided that I should be able to (barely) afford a 4 room flat in say Bedok or Ang Mo Kio.

My main gripe is that the Government till date simply just refuses to address our real concern. Over the last 4 years, your flat "appreciated" 140%. Whether it's still affordable or not really depends on the yard stick we use to measure. If the Government persists on using their methods of calculation to argue that it's still affordable, there's really nothing much I can do.

But no matter which angle you look at, a 140% appreciation in the price of a flat over 4 years is worrying. I don't recall them ever admitting to that, nor offer any official explaination as to how that happened.

I've been tracking this thread recently since I'm in a similar dilemma. You sort of summarized my root concern; a situation whereby there can exist a 140% appreciation of a flat over 4 years is nothing short of worrying. I'm no economics guru but it just feels like something's really wrong... I seriously do not see my income catching up with these kind of appreciation levels

I can imagine if this continues... asset values soar but nobody is able to upgrade even if they wanted to (cause its too expensive) and first-time buyers will definitely be priced out(!)

[Husky]

Originally Posted by Concerned

I've been tracking this thread recently since I'm in a similar dilemma. You sort of summarized my root concern; a situation whereby there can exist a 140% appreciation of a flat over 4 years is nothing short of worrying. I'm no economics guru but it just feels like something's really wrong... I seriously do not see my income catching up with these kind of appreciation levels

I can imagine if this continues... asset values soar but nobody is able to upgrade even if they wanted to (cause its too expensive) and first-time buyers will definitely be priced out(!)

Yup. You don't have to be an economist to know something IS very wrong. Housing is one of the most important and basic need, but they have allowed the prices to soar... so much for trying to keep inflation and costs of living down.

Originally Posted by Husky

Yup. You don't have to be an economist to know something IS very wrong. Housing is one of the most important and basic need, but they have allowed the prices to soar... so much for trying to keep inflation and costs of living down.

Thanks to our very open economy and the overpaid people - bankers in US and politicians in SG. We don't see such severe problems in MY and ID. Something IS very wrong.

[lerevenant]

Interesting read over the weekend:

THE HDB has addressed some recent media reports and readers' letters concerning first-time home buyers complaining that they could not get a flat despite repeated attempts.

CASE 1: Married, but no place of their own

The Sunday Times reported on Sept 20 that Mr Jayce Ng and Madam Jacelyn Yong had applied at least eight times, five for build-to-order (BTO) projects and half-yearly sales.

They claimed they were successful in only one application - for a five-room flat in Clementi two years ago and regretted not buying then.

HDB's response:

The couple submitted 15 applications, out of which only four were for BTO projects, where couples have to wait typically three to four years.

Their other applications were for limited flats in mature estates. Records show they were offered a chance to select a flat seven times but did not do so.

The couple's response:

Mr Ng said he does not remember being offered as many as seven times.

In some cases, he said he chose not to select a flat because the ones left over were on the second floor.

CASE 2: 18 failed attempts to get an HDB flat

Home buyer Soh Say Kiat wrote to The Sunday Times Forum Page on Sept27 saying that he and his wife married in 2001, but had yet to hold their customary wedding.

They said 'we have been unsuccessful in our numerous attempts - around 18 times since 2001 - to get an HDB flat' which they put down to 'rotten luck'.

HDB's response:

Records from 2002 showed the couple made 12 applications.

Out of these, only two were for BTO projects, the rest were for popular flats in mature estates.

The HDB says the couple was offered a chance to select flats three times but they did not take it up.

It pointed out that Mr Soh was offered a BTO flat in Sengkang in 2003. If he had accepted, he would have got his flat in 2006.

The couple's response:

Mr Soh said he could not remember all three offers, but recalled that he gave up one offer because the flats were on the second floor.

He admitted they were picky about location when they started applying for homes, but say they will try for BTO flats on offer now.

CASE 3

A home buyer sent an e-mail to the Prime Minister's Office on Sept 21 saying: 'I have been married since 2007, and to date, unable to secure a HDB flat after numerous balloting exercise at least 10 times over the years.

'This has greatly affected first-timer applicants especially like myself where I could not live a normal life.'

HDB's response:

The couple applied eight times, not 10, and only one application was for a BTO flat, where there is a much higher chance of success.

They had four chances to select a flat but did not do so, including an option to take up a BTO flat in 2005, which would have been completed last year.

[lerevenant]

Husky,

It will be useful if you can share with us your budget, requirements (no. of rooms, high-floor, etc) and the shortlist of location that you have. With this info, maybe we can give you a more comprehensive advice on what and what-not to look out for.