fpc on Tue, 1st Sep 2009 10:25 am 

//[In part 2 of this series, I shall prove once and for all why it is a myth that HDB flats are unaffordable by using an authoritative housing affordability index - the Median Multiple which is widely used by the World Bank and United Nations]

Are you trying to prove they are affordable or not affordable?

Not clear from what you wrote.

admin on Tue, 1st Sep 2009 10:38 am 

Hi fpc,

Thanks for pointing out the printing error. The correction has been made.

anonymous on Tue, 1st Sep 2009 10:41 am 

Technicallly, Singaporeans still own their HDB flats because if they were to sell it, give up citizenship and migrate overseas, the value of the flat belongs to them.

hck on Tue, 1st Sep 2009 10:52 am 

Good piece. Sometimes we just get so caught up in the hype of our own success that we lost sight of the actual value of things. Need some more of this kind of reality check articles.

Odie on Tue, 1st Sep 2009 11:00 am 

To anonymous on Tue, 1st Sep 2009 10:41 am

“Technicallly, Singaporeans still own their HDB flats because if they were to sell it, give up citizenship and migrate overseas, the value of the flat belongs to them.”

This is a stupid statement you know? It has no relevance to the subject. You can also say the food stall you rent from NEA or a coffeshop owner is also yours since you can sell that rental agreement away.

admin on Tue, 1st Sep 2009 11:02 am 

Hi anonymous,

How many Singaporeans can afford to migrate?

Don’t forget when one sells the flats, the HDB subsidies have to be returned and there is a hefty resale levy to be paid.

The question is: with so many restrictions imposed on the sale of HDB flats, are Singaporeans better off renting them in the long run?

fpc on Tue, 1st Sep 2009 11:31 am 

//anonymous

Now you know why so many people are homeless in Singapore?

Forced to sell and have no where else to go and cannot emigrate.

The bulk of their monies stuck in the CPF which they cannot take a cent out.

Sad.

Peter Kwan on Tue, 1st Sep 2009 11:53 am 

HI,

I had clicked on the link to this article of yours with much expectation that you will indeed throw some new light on a subject I am quite keen to understand better.

Unfortunately I was only to be disappointed.

Firstly, your choice of fairly strong words like “debunk” ; “pervasive misconceptions” & “at exorbitant prices” made me wonder if the article was written with a bias. I hope that the likes of those words were chosen only to sensationalise.

Let me assure you that I am just another concerned apolitical observer in his 50s and not part of the “state-controlled media”.

I feel that your thoughts on the status of Housing Board properties are shallow and the attempts to explain “ownership” feeble and nothing more than “splitting the hair”.

If one does not “own” something, can one transfer that pessession? If one does not “own” that possession, can one pledge it to the bank for financing? Does owning something for a 99 years duration (longer than most life-spans) negate that ownership entirely? etc etc.

Contrary to your suggestion otherwise, in land scarce Singapore, even Freehold land can be acquired and HAS BEEN ACQUIRED!

That said, I am also very concern about the high prices of properties in Singapore. This matter about affordability is really debatable. By what yardstick should we measure affordability? I wonder if this asset inflation that some claim to be driven by supply and demand is really so. Many suburban private properties today are still below their peaks 12/13 years ago. That is to say that many property owners are, after servicing their loans for 12/13 years, still worse off!

So, should the authorities just sit back and watch while many jump into the fray, (many ignorant) only to slog for the banks and have little time for their families …. just to make ends meet? I think the sociologists should make a detailed study of such pre-occupation with making more money in order to service the huge debts for percieved benfits that results in broken families and fewer children.

anonymous on Tue, 1st Sep 2009 11:59 am 

Thanks admin for your reply. I too agree that HDB prices are exorbitant but I would also like to understand if Singaporeans truly own their flats.

From what I see, despite the resale levy and subsidies returned, there’s still a sizeable amount to be given back. Though the majority of Singaporeans would rather not migrate but still the fact is, the money is given to the owner if he/she sells the flat and gives up citizenship. That’s why I used the word “technically”. Thus, we cannot say that Singaporeans do not own their flats, even if it’s only 99 years.

A debate is welcome, minus words like “stupid” etc of course.

Mainman on Tue, 1st Sep 2009 12:28 pm 

I was forced to sell my HDB flat as:
1) Wife left me.
2) Dad died of cancer, mom in hospital.
3) My mom had a 3 room flat and I have a 4 room flat.

I paid for the flats on my own, and all the money came back to me, however, I had a good job, supporting my family and my parents, until my Dad at the end of last year.

My mom was ill and I had to take care of her, and basically renting out the 4 room flat as I took up a part time job instead of a full time. Wife left me and I am forced to sell my flat at the worst time ever, after buying it at a pretty high price.

After that I live with my mom in a 3 room flat, beside many foreign workers who are noisy, smelly and dirty. I find cigarette butts in front of my house every morning and the fresh smell of pee near the stairs area.

With my mom now in a hospital, there is a real difficulty to pay for her bills. Medical care is expensive and rental I collect is no more. I sold my car and got nothing back (had to still pay back a little), forced to sell flat and got nothing back, (lost $50k over valuation).

Its a good idea renting out flats with the increasing number of the workers but the restrictions of “family unit” just makes it hard.

I don’t understand how many Singaporeans do it.

If you are a SINGLE professional, under 35, and you want to be on your own, independent of your family, how can you afford a Condo? Are you just expected to rent a room?

And the new flats in AMK, Bishan and Toa Payoh are all 4 room and up, and REALLY expensive, do they expect people who have not owned flat before, able to afford them?

admin on Tue, 1st Sep 2009 12:37 pm 

Hi Peter,

Thanks for your feedback.

This article is written in response to the perennial PAP propaganda that Singaporeans should be eternally grateful to them for enabling them to “own” homes of which its fallacy has been clearly exposed here – that strictly speaking, Singaporeans don’t quite own their HDB flats depending on how you look at it. There are two ends of the spectrum here. If you look at the extreme from the PAP’s perspective, then you will come to the conclusion that Singaporeans own the flats, if you look from the other end from our angle, it will be diametrically opposite.

Lastly, isn’t it the duty of the elected government of the day ensure that every citizen has a roof over their heads? There’s really nothing to shout about here.

anonymous on Tue, 1st Sep 2009 12:40 pm 

“The reality is, Singaporeans do not own their HDB flats. They are merely renting it from HDB for a maximum period of 99 years and paying a pretty high monthly rental at that.”

High monthly rental?

If a new HDB flat cost 300K , the monthly rental of the flat from your point of view is around $253 ($300k/(99 years * 12 months).

admin on Tue, 1st Sep 2009 12:43 pm 

Hi anonymous,

Please find us a bank anywhere in the world which is willing to lend you 300K for 99 years at zero interest rate.

Jim on Tue, 1st Sep 2009 1:31 pm 

Hi Admin,

Typo error on the following:
“Under the then infatigable Minister for National Development Mr Lim Kim San, HDB began the task of solving Singapore’s housing crisis and resettling the squatters.”

“Infatigable” should be correctly typed as “indefatigable”, meaning tireless, not yielding to fatigue.

MZ on Tue, 1st Sep 2009 1:37 pm 

Really no one owns any properties in Singapore be there having a lease in pepectuity or otherwise. Gahmen can acquire, your neighbours can sell your’s without ever needing your signature. As for affordability of HDB – it is affordable, but leveraged to the hilt, with nothing left for retirement. Reverse mortgage also means no inheritance for children. Whatever wealth there is, is as if on loan. Work like a slave, die like one.

Mainman on Tue, 1st Sep 2009 2:34 pm 

Urban squatters or now suburban slums are a common things now. Though most Singaporeans are not subjected to it, the living conditions of these slums really bad.

I guess when a foreign worker comes and realizes that he lives now in a slum much worse than that in his third world country, its too late for him to go back as he had already paid his agent, and is in for the ride.

So blaming foreign workers and FT that they take away our jobs, is not fair for them too, as IT IS TOO EASY TO WORK IN SINGAPORE, and not much barriers set up to prevent them from asking a low wage. There are also many recruitment companies in the neighboring countries that are “conning” people to work here, showing them a nice front that Singapore constantly display to the outside world.

As for 99 year lease and saying that “you own it for the duration” is a load of crap. If you lease a car for 2 years and drive it, it is unlikely you will take care of it well, “even when you own it” for that 2 years.

Looking at the big picture, there are always older blocks getting torn down and the residents being “forced” to move to other estates. (I use the word “force” because though their 99 year lease is not up, they cannot choose to stay) I do not believe the flats will last 99 years.

The government through SLA and URA has acquired a lot of land from the public. Citing “zone-ing” and other regulations, forcing people out of their shophouses and old farms in “rural” areas and then converting it into HDB flats.

I strongly feel that since we pay taxes, a few things can be and can be taken for granted. Education, healthcare, security and a roof over our heads.

The thing I do not understand is that why these corporations that are state-owned or semi-state owned must make a PROFIT on everything from public transportation to HDB flats. SLA leases small plots of lands at different rates depending on usage and location, and even when the land is not used at all, say, “patch of grass near Tampines Ave 10″ they still want top dollars for it if you intend to lease it for 5 years to start a vegetable garden.

I think the land in Singapore is definitely enough for local born Singaporeans to live on, and the fact that it feels more crowded day by day is definitely not a product of SINGAPOREANS.

cy on Tue, 1st Sep 2009 3:16 pm 

this is an extract of speech by Mah bow tan in 2006

Today, 46 years after HDB was established, there are almost 900,000 flats across Singapore, which house 85 per cent of Singaporeans.

We have probably the highest home-ownership rate in the world.

The flats are made affordable, with generous government subsidies on both the selling price of the flat as well as the loans to pay for it. Typically, a family needs to pay less than 20 per cent of its household income to service the loans.

Singapore was a young nation, with people coming from many lands to settle here. We had to get them to sink roots here, and to develop a sense of belonging to the community and to the nation.

The cornerstone of Singapore’s public housing programme is our home-ownership policy.

Started in 1964, the Home Ownership for the People Scheme aimed to give Singaporeans a tangible stake in the country and its future.

Minister Mentor Lee Kuan Yew gave the rationale for this policy in his memoirs: ‘I had seen the contrast between low-cost rental flats, badly misused and poorly maintained, and those of house-proud owners, and was convinced that if every family owned its home, the country would be more stable. I believe this sense of ownership was vital for our new society, which had no deep roots in a common historical experience.’

The home-ownership flat provides the incentive for Singaporeans to work hard to own a flat, and to defend it. National Service (NS), the conscription of able-bodied male citizens to serve in Singapore’s military defence, would not be possible if Singaporeans did not feel that they had such a tangible stake to defend.

Besides contributing to the stability of the country, home ownership has provided Singaporeans with an asset and a store of value. In a recent survey, each HDB household was estimated to have an average housing equity worth about $154,000.

This asset is closely linked to the economic development of Singapore. It motivates Singaporeans to work hard so that their flat can grow in value, and they can upgrade to a better home. Most importantly, the possibility of upward social mobility provides hope to people. Anyone who works hard can, with some help, improve his life and that of his family

The success of the public housing programme can be attributed to two important policies.

One: the land acquisition policy; and two: the Central Provident Fund (CPF), the compulsory savings scheme.

In the early years, in order to assemble sufficient land at a reasonable cost, the Government had to acquire private land for the development of new public housing. Landowners were understandably aggrieved, but came to accept it when they saw that their land was being put to good use, in the national interest.

The CPF, a compulsory savings scheme whereby up to 33 per cent of a worker’s salary is set aside by the employer and employee, has enabled Singaporeans to fund the purchase of their homes. Over 70 per cent of Singaporean HDB flat owners today are able to service their housing loans from their CPF account without the need for cash top-up. The Government also borrows funds from the CPF Board to offer housing loans to flat-buyers at concessionary rates.

points to note: 1)in 2006,singapore resident(ie citizens + PR) total at 3.6 million, 85% = 3.06million.
with 900000 flats, average resident to flat ratio is 3.4 to 1 flat. real figure will be slightly higher because some foreigners also rent flats. what does this figure says about the supply of flats,considering that in 2007/08 number of PR have been surging?

2)in 2006 typical household use less than 20% of income for loan servicing, but in the latest comment by HDB i quote “On average, first-time households used 21 per cent and 25 per cent of their monthly income to service their loans on new and resale HDB flats respectively in non-mature estates” is this an indication that prices are becoming more unaffordable?

3) sense of ownership was stated by MBT and LKY, LKY even linked it to NS. obviously, HDB flats is seen as an asset linked to the well-being of singapore. but if more and more citizens can’t afford high priced flats with stagnant wages, then is the plan of tying the well being of singapore to HDB flats in jeopardy?

4)as govt borrow funds from CPF board to offer housing loans,its rate is pegged at 0.1% point above CPF Ordinary Account Interest Rate.thus, in actual fact we as a pool are lending ourselves money to buy flats but the govt gets 0.1% of commission from the loan. so when the govt says they sell subsidised flats to us, even if it is true but they forget to mention abt the 0.1% commision which is hefty.

chinagirl on Tue, 1st Sep 2009 3:27 pm 

I think it’s great that there is such a website as Temasek Review to give us food for thought but it would be even better if there could be a bit more balance in the article here.

The restrictions placed on the resale of HDB flats were placed to stop the speculators (of which there are many in Singapore) from buying cheap and selling high. Ensuring that only the people who are truely looking to buy a new home for the first time to live in get the opportunity to do this. They should get priority, not the wealthy Singaporeans who are contantly on the look out for the next investment opportunity.

99 year lease hold seems short but if you get a loan and buy a new HDB at the age of 27 yrs old, you will own it before you retire and be able to live your final years in that same flat if you choose to do so. As for passing it on to your children, chances are they probably don’t want to live in your 30 year old HDB flat. They would be able to own their own new HDB flat should they wish to.

I’d be interested to know what are the discounts given for new flats to replace the old demolished flats.
As HDB does not make huge profits like most other private property developers, I imagine they cannot give the same kind of en bloc rates. At least they bother to redevelop old flats.
Many other countries would not bother with constantly sprucing up their public housing areas.

Looking forward to part two. As I’ve lived in many developed as well as 3rd world countries, I rather envy Singapore for the fact that so many are able to have a decent home of their own. The HDB is not perfect but it’s far better than most public housing if you really want to compare.

Ang Kong Kia on Tue, 1st Sep 2009 3:31 pm 

When we “buy” the HDB flat, we signed a Tenancy/Lease Agreement – not Sales and Purchase Agreement.

louis on Tue, 1st Sep 2009 3:34 pm 

Now when it comes to the citizen, it always use benchmark for this and that. But when comes to the benefit and salary of the government, did they benchmark here and there ?

admin on Tue, 1st Sep 2009 3:40 pm 

Hi Chinagal,

1. What if by the time you retire, you have no savings or CPF left for retirenment needs because most of it is tied up with the housing loan? And you can’t sell the flat because you have nowhere to stay. Are you going to continue working till the day you drop dead?

2. How do you know that HDB did not make any “profit” from the sale of HDB flats? Till today, HDB still refuse to release the exact figures for the cost of building each flat. Why are they so reluctant to reveal the truth to the public?

3. HDB are “decent homes”: Please go and visit the old flats in Toa Payoh, Bukit Merah, Ang Mo Kio and even the newer ones in Bishan, Sembawang and Jurong and see for yourselves the living conditions inside.

a_small_fry on Tue, 1st Sep 2009 3:56 pm 

another myth is, we are getting to see our CPF $$ at age 67.

chinagirl on Tue, 1st Sep 2009 4:42 pm 

To Admin
Right back at you….

If by the time you retire, after 30 years of working, living all this time in your HDB flat and you have absolutely no savings then it is not the fault of the government but the individual who does not know how to manage their own money.

I did not say that HDB does not make ANY profit, I said HDB does not make HUGE profits. I’m sure they must have some profit of some kind but they cannot be compared to private real estate developers/companies.

Please go and compare Toa Payoh, Jurong etc, with public housing in Hong Kong, China first tier cities or Taiwan. Toa Payoh old flats would look like Beverly Hills 90210 to them.

PMET on Tue, 1st Sep 2009 5:02 pm 

Hi Admin,

I read this article with much interest.

I was having this discussion with my friends the other day on the topic of housing.

It is easy to define a freehold home as an asset. This is because once you have paid for it, that property is effectively yours to keep. You can stay there as long as you want and pass it to as many generations as you so wish. (barring the exception that the land is to be acquired by the government for urban development as exceptions)
Much like how you defined it in your article.
But for 99-year leasehold homes, that is another story altogether.

Most of us are “buying” home that have 99-lease cos the price is definitely much much more affordable as compared to a freehold unit.
Our government has always been harping to us that after we pay off the loan on the homes that we live in, we are effectively rich in assets as the home is suppose to be the largest investment we ever make in our lifetime.

Then suddenly it comes to mind. Lease hold means that at the end of the 99 years, the home we live in no longer belongs to us. The deed that we paid so much money for when we first moved in is, well, effectively useless as the value paid for is only for 99 years tenure of the home that we live in.
So, am I right to say that once the lease is due, the home we live in is effectively worthless?

If that is the case, then do we still call the home we “bought” (with the 99 year lease) an asset?
Do you have any resource on the law that dictates the conditions of a lease and its value after the lease expires to back this up.

I am asking this because one of my friends took up a home that has about 50 years left in its tenure deed. And he is in his early twenties. Assuming that he doesn’t move from this unit he bought, when the lease expires, he will be in his early 70s. Given the exorbitant price he paid for the unit, his CPF would have been wiped out from paying for the unit.
And with the government always telling us that the HDB flat is an asset, would it still be when the unit is 99 years of age?

This would be a very good point to discuss in your next article cos Singapore is relatively young. And no flats in Singapore has yet to reached its 99 year lease. But it will, in about 50 to 60 years for the first batch of flats built in Singapore. (Assuming that those flat are still around to see the end of its 99 year lease).
What will happen to those who are living there?
What does the law dictate on the contract that was signed with HDB 99 years ago?
What is the value of that flat then? Will it still be market value? Or zero as the contract was for a price for the unit for 99 years only?

Please advise.

admin on Tue, 1st Sep 2009 5:30 pm 

Hi PMET,

Thanks for your questions. We will be more than happy to answer them based on our limited knowledge.

Leasehold properties are unique only in land-scarce countries like Singapore, but not in other countries like Malaysia, Australia or Canada. In communist China, properties used to be of 60-year tenture only until the change in the property rights law two years ago and now most properties in China are freehold!

In Singapore, leasehold condominiums usually cost about 20% less than their freehold counterparts in the same vicinity unless they are situated next to MRT stations in prime districts like The Sail and Citylights.

The value of leashold properties (in the private sector) seldom go up by much and will start depreciating after 10 to 20 years. If you read the classified ads, sometimes you may find terrace or semi-D hosues selling at cut-down prices of less than $500,000! These are definitely leasehold properties with only 20 to 30 years left on their tenure.

The reason why the value of resale HDB flats will not go up indefinitely is because they are leasehold properties and therefore their value will start dropping after 20 years at the longest.

In Part 3 of this series, Eugene Yeo will explain why most Singaporeans are unable to capitalize on the asset value of their HDB flats because of this reason by using an authoritative study done by 2 NUS profs – Abeysinghe and Choy last year.

For those Singaporeans who bought their flats in the 1970s and 1980s, they can still cash out because though the prices have dipped slightly, they have appreciated greatly over the last 20 years and therefore they can make a profit in the end.

However, Singaporeans who bought their flats in the 1990s and now will probably have to sit on their losses for a very long time and worst still, their value will eventually plummet after another 10 to 20 years or so.

PMET on Tue, 1st Sep 2009 5:35 pm 

Hi Admin,

I understand the points you have raised so far.

My concerns are when the lease expires at 99 years.
Assuming that some flats are able to see the end of the 99 years, what is their value then?

I am sure there are laws governing the contracts signed between the “buyer” and HDB.
What does this law dictate about the value of the unit when the lease expires?

Given the example of my friend, what will become of his networth at the end of the 99 year lease?

This is tricky, cos the withdrawal of the CPF is tied together with the value of the unit we bought. That is why I would like to know if the flat is still worth anything at the end of 99 years.

Do you have any ideas?

forgetilah on Tue, 1st Sep 2009 5:41 pm 

perhaps admin can do a comparison between a family of 4, 30 years ago, and now. i believe your arguments would be stronger if you could provide numbers for readers here to do a comparison.

compare income, prices of flats, inflation, maybe 1kg of chicken, 1kg of caixin, etc. and the figures would probably speak for themselves, whether HDB flats are affordable now, compared to 30 years ago.

admin on Tue, 1st Sep 2009 6:00 pm 

Hi PMET,

Sorry we are unable to answer your questions as they are hypothetical in nature – no HDB flats have completed their 99 year tenure as of yet.

However, we can get an idea of its value by then from some anecdotal evidence.

In the early 2000s, Toa Payoh went through a major upgrading programme when many one room flats were torn down. The owners of the flats at Lorong 1, 2 and 7 are not given financial compensation via cash. Instead they were resettled at the new four and five room flats built to replace their old units at huge discounts. (Sorry, we are not aware of the actual price).

In a way, they are adequately compensated because the prices of these flats are one of the highest in Singapore. A new 5-room flat in Toa Payoh opposite the MRT station can fetch as high as 600K now. However, HDB did not acquire their units at twice the market value as is the standard practice in the private sector. It has the right to forcefully demolish any HDB flats for purpose of upgrading and nobody can fight them in court unlike in private properties where the minority owners can refuse to the en bloc and sue the buyer. (remember horizon towers?)

The value of leasehold landed properties usually drop by more than 50% by the time they reach the 60th year of their tenure. When the term is up, the value of the land on which it is built on is zero rendering the property worthless. Therefore, never buy a leasehold property unless you bought it at the bottom of the market or if it is located in a prime district like Orchard or Shenton Way. Freehold properties will always be a safe bet as they fetch higher prices upon resale and they will always retain an intrinsic value even after 20 to 30 years when they can be sold via en bloc at more than twice their market value.

hydeto on Tue, 1st Sep 2009 6:27 pm 

Singapore is like a communist state. The flat built by HDB are like unit given out for it’s workers to stay but you do not owned it. And you have to pay for it. Everything is state owned.

And a lot of Singaporean been complaining about the Gov but when election come, they still vote for PAP. Just to be safe, worry that if the opp party take over, the country will be badly governed. Thru-out my voting, I had never voted for PAP, althot doesn’t mean I support the Opp party or trust them. But I do believe changes is good. Even if the Opp party take over and mess up Sg. It’s ok. They will be remove away in the next election and maybe PAP or other party will take over again but at least they had their wake up call that the people decide who run the country.

hydeto on Tue, 1st Sep 2009 6:28 pm 

The 2nd para from my previous post is a bit out of topic. Sorry but just something I like would really like to voiced out.

chinagirl on Tue, 1st Sep 2009 6:40 pm 

Dear Admin,
It is for the very fact that I have survived on low wages in other countries (and in Singapore) and had peronsal issues with housing that I felt compelled to give my comments here on this topic. Í am so far off from the ivory tower, your comment makes me want to laugh out loud.

Because I have seen with my own eyes (have you?) public housing in other countries, like Hong Kong, China and U.S., I feel I had to comment here.
Yes, there are Singaporeans who are poor and have little to live on but for every one of those examples, there are 2, 3 or more examples of Singaporeans who are well off and doing very well financially for themselves.

Even in the most developed well off countries you are going to find poor people. At least these poor people have a roof over their heads and a safe place to call their own. In Hong Kong and China, many families are crammed into one apartment often having to share toilet and kitchen facilites.
In most other developed countries when you talk about public housing, it also conjures up places which are unsafe, and where criminal and drug activities thrive.

The HDB and PAP are far from perfect and yes of course much more can be done but please have a look and compare with other cities and their public housing options. No need to get personal in your comments, we are all just trying to give our own personal views and give some balance to the opinions.

admin on Tue, 1st Sep 2009 8:00 pm 

Hi Chinagal,

The gist of this article is not to compare public housing between Singapore and elsewhere. It is not even to criticize the government. The intention of the author is to look at our housing policy from a totally different angle – that Singaporeans do not exactly own their HDB flats in a way. Why are you bringing in so many unrelated issues like public housing in Hong Kong, poor people in other countries etc. to obsfuscate the matter?

The title of this article is – “It is a myth that Singaporeans own their HDB flats” and NOT “Singapore’s public housing is of inferior quality than elsewhere” or “The Singapore government has done a lousy job in public housing” or “The poor people of Singapore”. Please stay close to the topic of discussion and don’t digress.

tc on Tue, 1st Sep 2009 8:35 pm 

Interesting article, and I agree with the gist of the premise that we do not own our HDB flats in any sense of the word. Another perspective to look at it is this – if we own it in the traditional “asset” sense of the word, then we should be able to take out a mortgage/loan against it if it’s fully-paid. Unfortunately for HDB flats, we cannot – first right of mortgage belongs to the HDB. I know cos I’ve had this discussion before with a bank – my flat was bought in the 60s by my parents in the first batch of flats built and fully paid for, and we were exploring if we could take a loan against it to finance an overseas education. No can do, says the bank, the right of mortgage belongs to HDB and HDB alone.

In other words, no, you don’t own it.

Anonymous on Tue, 1st Sep 2009 9:00 pm 

Some flats are already enbloc’d before anywhere near 99 years.

The residents will move to new and bigger flats in the neighbourhood and these will last another 99 years. The valuation of the old flats are used to offset the new flats which are actually very much discounted. There is also a compensation to the residents due to the enbloc.

There’s a saying, kena enbloc is like strike 4D. Those who kena will understand the feeling. I don’t know, but maybe most flats will kena 4D before 99 years old?

FPC on Tue, 1st Sep 2009 9:07 pm 

//Chinagirl

//Even in the most developed well off countries you are going to find poor people. At least these poor people have a roof over their heads and a safe place to call their own. In Hong Kong and China, many families are crammed into one apartment often having to share toilet and kitchen facilites.
In most other developed countries when you talk about public housing, it also conjures up places which are unsafe, and where criminal and drug activities thrive.

There are already many Singaporean families doing that.

i.e. crammed into one apartment often having to share toilet and kitchen facilites.

FPC on Tue, 1st Sep 2009 9:37 pm 

//chinagirl

//HDB does not make huge profit

Yeah right. Ask any agent about the profit it made from the flats in Toa Payoh, they will tell you the contrary.

I almost bet with you that “chinagirl” is not a china girl. Her English is too good.

//Please go and compare Toa Payoh, Jurong etc, with public housing in Hong Kong, China first tier cities or Taiwan. Toa Payoh old flats would look like Beverly Hills 90210 to them.

She obviously have not been to Beverly Hills 90210.

My China friends from all over the world, claimed that their chinese flats are better. They called our flats (even with the renovated doors from HDB and in Toa Payoh) cheap. They didn’t even bother to renovate their Chinese flats because they are keeping it for sale later as the Chinese do not like used flats.

Comparing flats in Toa Payoh with the public housing in China?

you should really visit some of the older flats in Toa Payoh in Lor 5,6,7. It is like trapped in time. The conditions are so bad and they are selling them at super high prices. Of course, since the MP never go to those places, chinagirl never know.

//If by the time you retire, after 30 years of working, living all this time in your HDB flat and you have absolutely no savings then it is not the fault of the government but the individual who does not know how to manage their own money.

Well, if the govt didn’t regulate the financial industry well, and didn’t handle mis-selling well and you lost money as a result, then it is their fault.

If the govt change their rules in a span of 1 year, so that you ended up not being to withdraw monies from your CPF account at 55, because of the raised minimum sum limit, then it is their fault. They could have given you the money and let you find your way in Malaysia. You will probably end up with a higher living standard than in Singapore.

If the govt change their rules, telling you that you are supposed to receive monies for life after 65 and then add another clause saying that you can’t because they say you can’t as and when they like, then it is their fault. NOt to add that you have to insure yourself against that. I also forgot to mention that it is difficult to plan for retirement if they keep changing their rules. Taiwan didn’t have a CPF system but their people got more (a lot more) monies than Us who save A LOT harder than them. I am not even comparing with hong kong.

All the more shocking when this is supposed to be a rich govt and those monies are really yours. However, it is not surprising since they lost so much monies overseas. Matching long term investments with short term liabilities (paying people that are near 55) is really dumb.

There will always be some people who cannot save. Same in China as in Taiwan as in HK as in Singapore. But to use that as a reason to create more problems to those who follow the rules is sickening. NOt only does it not solve the problem it created more problem to the rest.

If it is that difficult to let people have their CPF monies, then don’t take it in the first place.

//The restrictions placed on the resale of HDB flats were placed to stop the speculators (of which there are many in Singapore) from buying cheap and selling high. Ensuring that only the people who are truely looking to buy a new home for the first time to live in get the opportunity to do this. They should get priority, not the wealthy Singaporeans who are contantly on the look out for the next investment opportunity.

As if the measures that were put in place stop people from buying low and selling high.

If that were the case, then why change the rules to allow people to put in 10% instead of 20% and also allow them to buy private properties while at the same time having a hdb flat. I know of some Chinese immigrants doing that already.

If that were the case, then why didn’t MBT learn the first time that deferred payment create speculation problem. Well, HDB receives a lot of fees from resale, sale and whatever other fees they charge.

What makes you so sure HDB doesn’t make a huge profit? Do you know their accounts so well.

//As for passing it on to your children, chances are they probably don’t want to live in your 30 year old HDB flat. They would be able to own their own new HDB flat should they wish to.

This is one of the cockest thing I heard. If you were given a flat in Central area because your parents pass away, you won’t turn it away, I am telling you. It is free 500K for nothing.

If that is not an issue, that the HDB won’t not be receiving a sequence of payments for those lucky children, then they won’t have change to the criteria permiting access to the 2.6% loan so that people who receive a “gift” from their parents when they pass away, won’t be able to take advantage of the 2.6% loan.

FPC on Tue, 1st Sep 2009 9:51 pm 

//cy

//4)as govt borrow funds from CPF board to offer housing loans,its rate is pegged at 0.1% point above CPF Ordinary Account Interest Rate.thus, in actual fact we as a pool are lending ourselves money to buy flats but the govt gets 0.1% of commission from the loan. so when the govt says they sell subsidised flats to us, even if it is true but they forget to mention abt the 0.1% commision which is hefty.

They are smarter now. They restrict the conditions of the 2.6% loan to a smaller group of people. So that a bigger pool will have to borrow from the banks. The unlucky ones who had to borrow from the local banks ended up paying 4% interest and the govt owns most of those banks. Then you ended up paying not 0.1% more but 1.5% more.

Without these measures and all the ERP thingy, do you think s’poreans could have financed their salaries given their misadventures overseas.

The people who get a slightly less good deal than the govt is the overseas people.

they invest because we are willing to work and govt lure them with low tax.

to make up for the short fall in income, they have to tax you using other means through GST, housing loans and ERP etc.

If you measure how Singaporean life has improved over the last decade with how other 4 tiger people’s lives improve, you will laugh or cry depending on your sense of humour.

If you count the number of “innovations” that taxes you from the government, you will be surprised. They definitely beat all the govt of the 4 tigers.

With that kind of creativity, they should have worked in the private sector and come up with new products and services that the country can export elsewhere and be able to earn more money. Sadly, they are selling their “poison” for local consumers only.

they are trying now to get overseas people to buy their “innovations” by getting them here in Singapore.

Or I should say that other countries know that it is posion and don’t adopt them.

A P on Tue, 1st Sep 2009 9:57 pm 

Chinagal,

The big difference between us and other countries is that the PAPies are the highest paid politicians in the universe. So it is only natural for us to expect more from them.

Stanley on Tue, 1st Sep 2009 11:01 pm 

Intelligent writer, this is.

Orlando Moon on Tue, 1st Sep 2009 11:23 pm 

singapore is a small country the size of 1 city and 1 city it is.
Let all have a roof over their heads.
Compared to china or india, this should be an easier goal to reach right?

regards
HDB leaseholder.

indexer on Tue, 1st Sep 2009 11:40 pm 

In preparing for his “Part 2″, the writer may wish to note that the Median Multiple is considered to be a crude estimate of housing affordability. In particular, Median Multiple does not take into account the effect of the interest rate environment, which is one of the most important factors in determining housing affordability. This is one of the reasons why the Shelter cost-to-income ratio (STIR) is considered to be more appropriate.

HeavenGotNoEyes on Tue, 1st Sep 2009 11:54 pm 

Anonymous,
“Kena enbloc is like strike 4D. Those who kena will understand the feeling. I don’t know, but maybe most flats will kena 4D before 99 years old?”

Not all people like enbloc by HDB. It’s different from the private property. They were forced to vacate their “LEASED” property and alloted a new HBD flat at discounted rate. Like Admin mentioned, in Toa Payoh lor 1 & 2, portion of the tenant there are retired or unemployed old people. Their consolation is that they have a roof over their head. But now, thank to HDB redevelopment, they had to cough up thousands of dollars to pay for the new discounted flat. Where the hell are these old aged people get such money to pay for it? They even told HDB to gave them any old flat as long as they dont have to fork out any money.
HDB make little profit? Are you in construction line? A Quantity surveyor? Have you calculate the cost of building a unit of HDB? The term “huge subsidy” use by HBD depend what they term as Cost Price.
For eg, if a HDB 4 rm unit cost price (cost of building a unit) is $120K, a 20% subsidy by HDB is not $24K. HDB peg the price at market rate, say $320K, thus selling that unit to Sporean at $264K mean that HDB gave a “huge subsidy” of $64K (20% of $320K). So it claimed they lost $64K ($320k-$264k)instead of a profit of $144K ($320-$120K).
What we learned in school that Profit/Loss= selling price – cost price does not applied to HBD. Their Cost price is the market price.

Terence Goh on Wed, 2nd Sep 2009 1:03 am 

Chinagal,

Can you find public housing that costs $500k in other countries? With $500k, I can buy 3 furnished condominium units in Shenzhen or 10 units in Haikou. So please compare apples with apples. Public housing in Singapore is in name only.

Frankly even some houses in small towns are better furnished than HDB flats.

admin on Wed, 2nd Sep 2009 1:06 am 

Hi Indexer,

STIR does not take in account the mortage rate too. Only the affordability index which measures the ratio of the actual monthly cost of the mortgage to take-home income, does so.

Kim Jong Il on Wed, 2nd Sep 2009 1:53 am 

@chinagirl:
“Yes, there are Singaporeans who are poor and have little to live on but for every one of those examples, there are 2, 3 or more examples of Singaporeans who are well off and doing very well financially for themselves.”

Show us a qualified statistics to prove that.

maxibon on Wed, 2nd Sep 2009 2:21 am 

this website makes me looks faith in humanity.

FPC on Wed, 2nd Sep 2009 2:59 am 

//indexer

The interest rate environment ?

The numbers published are low.

But to access it, you will need to satisfy many weird criteria like age, marital status etc (for a hdb loan) and pay (less than 8k in total).

So, when everyone thinks that low interests benefit many people, in Singapore case, the low interest rate is to show people only. Not many benefited.

The housing loan is a disguised tax on people.

indexer on Wed, 2nd Sep 2009 6:46 am 

Hi admin,

I had thought that STIR could take into account the mortgage rate, if we decide to take “shelter cost” as mortgage payment, which may be appropriate in the local context. The ratio could then be (mortgage cost)/(income).

Affordability index is linked, and seems to be another way to express the key data. However, I’m not sure if 25% should be taken as the appropriate benchmark.

Another key consideration is that in the Singapore context, the payment of the mortgage means that the household now “owns” the flat, which is an asset, after the mortgage is fully paid-up. The flat has value (e.g., it could be monetised in a reverse mortgage). This would mean that the effective cost of shelter is actually lower than the raw mortgage payment figures.

admin on Wed, 2nd Sep 2009 8:03 am 

Hi indexer,

Sorry we have no time to answer all posts. Read Part 3 of this series. As a NUS study has shown conclusively, rising HDB prices does not lead to long-term wealth creation exactly due to its leasehold tenure.

You are more than welcome to scrutinize our articles. Well, you are even welcome to vet them before publication if you wish.

admin on Wed, 2nd Sep 2009 8:16 am 

Hi Lackey,

Please read part 2 and 3 of this series to get the whole picture.

We admit there are some Singaporeans who make a profit from selling their HDB flats, but you belong to the lucky batch who bought and sold it at the right time. Your family’s 4 room flat probably cost less than 100K. The buyer bought it from your family at an inflated price and you bought the 5-room flat at a very affordable price.

Assuming you sold off your 5-room flat now (let’s say for 340K)and you want to upgrade to a maisonette or condominium, do you have to increase your mortage loan and financial liabilities? Can you find a larger flat which cost lesss than your 5-room flat? Impossible.

Unless one downgrades, it is almost impossible to create wealth from the sale of HDB flats unlike flipping private properties.

One reason is the many restrictions placed on the sale of HDB flats such as the 5-year residential limit.

For example, let’s say you bought a 5-room flat at Punggol for 340K now. In 5 years’ time, will it rise to 490K? Unlikely. If its value rises by less than 60K, then the profit you make is very minimal because you have to pay back the HDB subsidy and the resale levy.

The property market will not be in a continuous bull run forever. What if it crashes, the price drop to less than 340K and suddenly you need money and cannot cash out on it? It is not so easy to downgrade to a smaller size HDB flat due to government policies (which are really complicated, please check out with HDB yourself).

Second, the tenure of the HDB flat is leasehold. If you hold on to your 5-room flat for another 20 years, the value will surely drop to below $300K, but you will still be able to make a profit if you sell if because you bought it at a low price. However, for your buyer, he/she will be stuck because he/she bought the 4-room flat from you at an inflated price which is unlikely to rise further.

Sianz on Wed, 2nd Sep 2009 9:52 am 

Hi Lackey,

It is a myth that higher asset will results in greater wealth…
For first time buyers, with ever rising asset value, most likely than not these group of people must fork out more money to buy the flats, and hence turn up having to pay more interest.
For existing owners, this might be a good thing… but think again. If the price go up, and the owner choose not to sell off the house, the increase in asset value is nothing more than an illusion. If the owner plans to cash in on asset appreciation, he is subjecting himself to buying a new house that is of the same price level of the house that he has just sold… hence it is zero sum in the end.
Of course, one can argue asset appreciation is beneficial for those who are buying more than a house, speculators or migrators.

So what happens to the 250k that you have made? Did you buy a new house and be back to a zero sum? Or did you choose to migrate or live on the street?

I am really surprise with you tirade on the Temasek Review. Perhaps you are really what you nick suggested, a lackey?

naeropagnis on Wed, 2nd Sep 2009 9:58 am 

“If Singaporeans are really owners of their HDB flats, then they should be allowed to sell them to anybody at any time like in the private property market without being subject to these restrictions imposed by HDB.”

This statement is not true because in Singapore the landed property market and even the low-rise private apartment market are not really open to anybody. These markets are restricted to Singapore citizen and PR with approval. Unlike other cities, ordinary people will never afford landed property because it reflects the real cost of land like in Hong Kong.

Jet Li or many other foreigners needs to become citizen in order to buy his big bungalow in Singapore.

HDB ENBLOC ... 'sale ...sail' ... !!! on Wed, 2nd Sep 2009 10:56 am 

NINETY-NINE Or 99 YEARS lease … But by like about 30 yrs OR LESS for some … ENBLOCkEd … KeD!!! Yah Lah … I DO unDerStand why in land scarce sINgKaPOORe … we do have a PRO-Blem of providing Housing and Employment For OUR PEOPLE. BUT it’s been more of this for more and more FTs, FWs and FExp (Experts) too!!! AS MBT asked an ex-NMP about En-BLOC sales … “But if you don’t do enbloc sales … how too .. REDEVELOPE hah”?

I suppose, … JUST like NY Wall ST. … Main ST. … AND Any Other Street In miniScule singkapoore … ALL The MORE … WE MUST … GO!… FORWARD … FAST AND FURIOUS … and then fall down like NY and the rest of the Americam USA???!!! YET even ther there … ISN”T IT THAT … it’s the HIGHEST and MIGHTY Wall ST. “Willy-Dilly DEALERS” RIGHT-AT-THE-VERY-TOP IN Literal “IVORY TOWERS” … Who ARE THE REAL GAiNers In-Wealth AND CoNNECTionS???

And SO, then in your retirement HERE … HOW DOES the EVER HIGHER PRICES Of even HDB flats GOING TO MAKE US WEALTH and in “The RESOUNDING REMINDERS” OF old man lee??? LEEs Wu-Ho … BUT we the leeS bo-ho!!! LAH!!! (=LEEs-prosper … leeS no-good).

NEVER Listen To Wall-St. CONS!!! READ Up RELANT THINGS MOST FERVENTLY … ARM OURSELVES WITH KNOWLEDGE … To EMPOWER SELF FOR ANALYSIS OF gAHmEn ‘leaders’ AND SO know their pros & cons as in … iNs & oUts’ talk-talk … are talk-cock Or NOT!!!

BO-LIAU … or No-Substance???

PAPsmearer on Wed, 2nd Sep 2009 5:33 pm 

I think what needs to be explained better in this very necessary article is how the lease works.

Basically, when u borrow money from the bank to buy your 99 year leasehold HDB flat, u are in effect borrowing money to pre-pay your lease (u can call it rent too) for 99 years. Normally, when u rent from a landlord, u might be required to sign a 1 year lease agreement which stipulates among other things, the monthly rent. At the end of the 1 year, the landlord may not decide to renew your least. In the case of a HDB flat, by prepaying your lease for 99 years, u avoid the uncertainty of the normal lease. However, as u have mentioned, the 99 year is a fallacy anyway. HDB flats are not designed to last 99 years. And the lease agreement is written so that the HDB can break it in order to move u to another housing estate if they decide to tear your block down.

Secondly, people claim that they own the flat because they make a profit when they sell it. What they are actually selling is their interest in the pre-paid lease, not the actual flat themselves, because they don’t own it. They are selling the right to live in that unit, and basically, assigning their rights as tenants to another individual for a fixed price.

Kongseemee on Wed, 2nd Sep 2009 6:08 pm 

I really hope the garhmen comes to their senses that trully, HDB flats are reaching a stage that is totally unaffordable to the heartlanders.

The Singapore Daily » Blog Archive » Daily SG: 2 Sep 2009 on Wed, 2nd Sep 2009 8:51 pm 

[...] – The Temasek Review: Debunking the official myths about HDB flats(Part 1): Singaporeans are owners of their HDB flats | (Part 2) – Singapore Peak Oil: Peak Sand = Peak Construction = Peak HDB [...]

Anonymous on Wed, 2nd Sep 2009 11:20 pm 

HeavenGotNoEyes on Tue, 1st Sep 2009 11:54 pm,

Enbloc by HDB is similar to private property enbloc. It’s like the small peanut version. They call private property enbloc a fever. So somehow, it seems like most people like such kind of things.

Yah lah, some people don’t like private property enbloc, just like some people don’t like HDB enbloc. Your example of old people is true, some of them don’t like the trouble of moving. They prefer their good old place.

As for coughing out money, I think HDB has some alternatives for those who can’t afford. That time I didn’t go into those details, because I don’t have much trouble with it. I just know I like the feeling, like strike 4D.

But like private property enbloc, some people like HDB enbloc. There are even people who target hdb with potential for enbloc.

As in all things, it’s not so clear-cut. Some people like it, some people don’t like it. What to do?

Dearest Singaporeans WITH SUBSTANTANCE ... YOU Are Who WE NEED in TR.WP ... For THE "RUB" ... on Thu, 3rd Sep 2009 12:25 am 

So A BIG AND BOLD THANK YOU … PEOPLE OF SUBSTANCE … FOR SOMING FORWARD TO EDUCATE US THE COMMONERS WHO MAY NOT KNOW THE “PAP sUmS”!!! … SO … THANK YOU ONCE AGAIN …

1. PAPsmearer on Wed, 2nd Sep 2009 5:33 pm … FOR Upping THE ANTE for PAP To show them THAT WE AIN”T THAT ’stupid’ AS they think we are FOR their fOOlinG aRounD HaW!! Hee-HaW to MBT!!!

2. And TO Kongseemee on Wed, 2nd Sep 2009 6:08 pm TOO … For reminding US THAT we ARE ONLY heartlanders As GCT said … For we are SO BOGGED DOWN BY HDB and Related LOAN REPAYMENTS … WE”VE BECOME “Stayers” BY DeFAULT oF PAP”S HDB Housing SyStem!!!

3. And ALSO To Anonymous on Wed, 2nd Sep 2009 11:20 pm For his honest comments about US heartlanders being some smart and smart like stupid … really depend s On If a person HAS child or childrn to continue living WITH THEM After marriage … or capable enough to help them pay for bla bla bla on the new enbloc HDB flats right!!! OR they themselves HAVE ENUFF money and live FRUGALLY TOO!!! CAN”T POSSIBLY live like PAP Minister’s AND MP TOO Right??? THAT”S OUR WORSE RUB BY PAP!!! …SPECIAL-BREED >>> SPECIAL_PEDEGREE … ACCREDIYYED … BY mmLEE … And … And THANKS TO HIS … “HIGEST PAY for highesT (T for TOWERING) TALENTS!!! end of their sTollY!!!

Anonymous on Thu, 3rd Sep 2009 12:55 am 

Dearest Singaporeans WITH SUBSTANTANCE … YOU Are Who WE NEED in TR.WP … For THE “RUB” … on Thu, 3rd Sep 2009 12:25 am,

Wah seh, your name super the long leh, and paiseh lah, I really use all my 4 eyes stare very hard already, but I still liah boh kiew. What saying you?

You don’t like my opinion on enbloc? The house is one for one. New one for old one. Big one for small one. My renovation is effectively covered by the subsidy. I still get to stay in my good old neighbourhood. So, is it like strike 4D or not? I think not many people get this type of lobang. I must be the luckier one.

I never think in terms of 99-years lease. But strictly speaking, I got an extension of a few decades for free, with a further bonus of a bigger unit, still in a well-liked neighbourhood. I think it’s fair I say I strike 4D.

It’s not all that bad. Some people like it.

FPC on Thu, 3rd Sep 2009 5:42 am 

//Peter kwan

//Many are countries with huge land mass.

This is an excuse used again and again by the PAP.

Our homes are built upwards not sideways.

If land is so scare then why build more homes. Go build factories. Factories is supposed to make money by export.

You only need to build more homes, if you have more people.

If you claim singapore ’s population is declining then there is no need to build more. Save the investment.

You bring in more people, so that you can drive the demand for housing and then you need to build more which allows you to make more monies since you are the prime home builder.

Why do you need more monies when you already have lots of it in your swfs? which apparently is not making money?

Wouldn’t it be simpler to just learn how to make money with those fund monies? Even at 1% return rate, I think we make 1 billion a year. 1 billion / 3 million Singaporeans is 300 dollars each.

Norway have a big fund and a greying population too, you don’t hear them telling you that they need massive immigration?

In fact, they control immigration tightly and their land is covered in ice/snow most of the time, I don’t know how useable is that.

You need to build more houses to make more money to cover the holes in your asset liability gaps.

there is nothing else you could do to make money. You sucked in everything.

But you didn’t care about the hardship people are facing in servicing their loans.

The hardship they face, when you change the retirement fund rules that disallow them to take out their monies to spend after many years of putting up with your crap.

The fact remains that other 4 tigers had to work just as hard but they ended with more money than us in retirement.

And we are savers all our lives.

You fail us.

Dear FPC ... People like Peter Kwan and Anonymous too ... they COLUDE ... In SELF-GRATITUDE BORN OF SELF GRATIFICATIONS .... on Thu, 3rd Sep 2009 11:36 am 

The VERY FACT that “totol” as HE said … HE HAD to PEER at my heading … literally shows his LACK OF depth … In MUTUAL MATTERS!!!

AS FPC … You ARE RIGHT That PAP IS ACTUALLY MAKING MONEY OUT OF HDB!!! OTHERWISE … WHY SUBSIDISE Foreigners This & That??? … AS WHERE THE MONIES COME FROM HAH??? … Self-Centred people like Anonymous are people we don’t need too many around LAH!!!

AS ALSO “Why PAP wanna build SO MANY in Ponggol, Etc UNTIL In HOLD AS CANNOT SELL like before REMEMBER Anonymous and Peter Kwan??? Self-Centred people CAN”T BE Great-Thinkers BECAUSE the simple reason IS THAT “They ONLy look TA their OWn 2-little-feet”!!!

blacksheepshepherd on Thu, 3rd Sep 2009 11:06 pm 

THIS LITTLE RED DOT IS THE NUMBER 10TH HIGHEST STANDARD OF LIVING CITY IN THE WORLD, YET IT’S PEOPLE AREN’T THE 10TH HIGHEST PAID LABOUR IN THE WORLD… IT’S JUST AMAZING, WHAT WE’VE BECOME.

ACTIONS SPEAKS LOUDER THAN WORDS… BUT LET’S SPEAK MORE COS IT’S EASIER… EASIER SAID THAN DONE.. THAT IS…

lackey on Sun, 6th Sep 2009 1:18 pm 

to all who are concerned about my predicament. the 250k was used to buy a condo in the Siglap area, for 500k, from a bankrupt, not unlike yourselves. currently valued at $1.05million.

i guess being a lackey do have its perks.

Thinktok on Tue, 8th Sep 2009 8:25 pm 

It would be easier for you to say that you ownn nothing because the floor belongs to your neighbour below and your roof belongs to the neighbour above.

Your posting is not helpful and biased. People are making money out of buying and selling HDB flats. Seed money to buy private property.

Fairplayplease on Tue, 8th Sep 2009 10:32 pm 

@lackey on Sun, 6th Sep 2009 1:18 pm …greetings…

You done well. Just remember that upgrade is NOT a sure thing of “wealth” accumulation but it is a DEFINITE thing of debt accumulation which still has a bigger mortgage to pay out each time you upgrade higher. A downsing for the same percentage means a bigger loss by reason of bigger exposure.

I know of one couple upgraded to landed property from a nearly full paid 5-rm HDB, then DOWNGRADED back to 5 room when market swings against him now with a bigger mortgage and now renting waiting for an opportunity to buy into a 3 room-HDB. Put simply, it is ONE upgrade followed by TWO downgrades given changed job circumstances of this working couple.

Personally, I don’t feel any wealthier regardless of my property’s valuation – it is just accomodation. I can’t bring that to my grave with me.

So a pricier valuation for property generally is just mirage wealth and has no meaning for me as I never had any intention whatsoever of upgrading or downgrading.

It just mean a harder start for young couples getting settled into life – it is NOT NECESSARY OF ADDITIONAL BURDEN.

How much money is HDB making or losing from the sale of new flats? : The Temasek Review on Mon, 28th Sep 2009 5:10 pm 

[...] >> Part 1: Singaporeans do not own their HDB flats [...]