Median COVs for resale HDB flats hit a record high $30,000
July 24th, 2010 | 
Author: In a sign that Singapore’s public housing market is spiralling out of control, the median Cash-Over-Valuation (COV) for the second quarter jumped by $5,000 to a record high $30,000 for all transactions with some flats in prime districts like Bishan and Toa Payoh fetching COVs in excess of $60,000.
Prices of HDB resale flats also rise by 4.1 percent to hit a record high with prices now far exceeding the previous peak achieved 14 years ago in 1996.
According to market analysts, the resale market is popped up largely by downgraders, married couples who can’t wait for a new flat and PRs who are willing to pay a premium price for flats.
About 20 percent of buyers in the resale market are Singapore PRs. Unlike other countries, PRs are allowed to buy public housing in Singapore by the pro-foreigner PAP regime and sell them later at a hefty profit when they return to their homelands.
The astronomical prices today are the result of the lack of foresight of the PAP to build more new flats to house the immigrants.
The PAP had made known its ambitious plan to increase Singapore’s population to 6.5 million via immigration as early as 2005. However, only slightly more than 11,000 new flats were built between the years 2006 – 2008 when there were over 90,000 PRs and 20,000 new citizens alone in 2008:
[Source: HDB Financial Report 2008/2009]
Below is a graph illustrating how the rise in the prices of resale flats coincides with the rise in the number of foreigners in Singapore between the years 2000 and 2008, courtesy of Kojakbt, the moderator of 3in1kopitiam:
Based on the above graph, the prices of HDB flats are likely to continue to increase with the expected influx of 100,000 foreign workers into Singapore this year, thanks to the PAP.
Despite the evidence on the ground showing otherwise, PAP National Development Minister Mah Bow Tan continues to insist that HDB flats are “affordable” to Singaporeans and chides home buyers for being “fussy” and having “unrealistic” expectations.
Debunking official myths of HDB flats series:
1 Myth 1: Singaporeans are “owners” of their HDB flats
2. Myth 2: HDB flats are “affordable” to most Singaporeans
3. Myth 3: Rising prices of HDB flats “generate” wealth for Singaporeans
Related articles:
>> $300,000 for four-room BTO flats in Punggol
>> Mah Bow Tan: HDB flats are still affordable to first time flat buyers
>> Why Mah Bow Tan’s policy of high HDB flats is wrong
>> Letter to Mah Bow Tan on HDB policies
>> Singaporean want govt to allay anxiety over HDB leasehold
>> Mah Bow Tan embarrassed by Reform Party’s Hazel Poa
>> Mah Bow Tan: “Unrealistic” expectations to blame for unhappiness about flats
>> Taiwanese PR paid record $ 650,000 for 4-room resale flat
>> Grace Fu: PRs are helpful to HDB flat owners selling their flats
>> HDB launches “traveling exhibition” to trumpet its achievements in the heartlands
>> PAP to upgrade 12,000 HDB households ahead of next election
>> Mah Bow Tan: We do not want flat prices to go down
>> Prices of resale flats to rise further as PR quota reached
>> Taiwanese PR offers $50k COV for resale flat
>> Mah Bow Tan: PRs have minimal impact on resale flat prices
>> No empirical evidence to suggest that public housing is affordable in Singapore
>> When will Singapore’s property bubble burst?
>> Why HDB is unable to reveal break down costs of new flats now
>> HDB to consider introducing rules to curb property speculation
>> HDB blames Singaporeans for not selecting flats when given the chance
>> Singaporeans worried about retirement after depleting CPF to pay for over-priced HDB flats
>> Mah Bow Tan acknowledged that rising HDB flat prices has sparked “fresh concerns”
>> PM Lee: Govt does not have control over prices of resale flats”
>> COVs of resale flats shooting through the roof
>> HDB resale price index hit record high in 2009
>> Singaporean wants PRs to live in rented flats instead of buying resale flats
>> Singaporeans wants PRs to be banned from selling HDB flats at a profit
>> Shanmugam: Singaporeans likely culprits for driving up HDB flat prices
>> Mah Bow Tan: HDB flats remain affordable
>> Means testing for PRs to buy resale flats
>> Immigration and public housing: should the govt or people plan ahead?
>> Grace Fu: hard to predict demand for housing
>> Indonesian PR bought 4-room flat at $653,000
>> Mah Bow Tan asks home buyers to be realistic
>> PAP MP blames young couples who cannot get a flat for not planning ahead
>> Home affordability: HDB versus the public
>> Demand vs supply: so many applicants, so few flats
>> Number of applicants exceed number of flats
>> HDB to increase supply of flats
>> Mah: don’t compare with prices in the past
>> ERA: 40 per cent of HDB flat buyers are PRs
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Copyright © 2009 – 2010 The Temasek Review
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35 Responses to “Median COVs for resale HDB flats hit a record high $30,000”
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Its already out of control. Mr Mah just refuses to admit. The multi million dollar civil servants simply don’t know what to do!!What a bunch of useless cunts!!
Marboro Tan and his team of clown is laughing all the way to the banks. Good luck to Sinkies. You asked for it! There is no way back and be prepared to pay S$1.00 million for a 5 Rms pigeon hole in time to come.
Bankers, real estate agents and contractors will laugh to bank too!
I always see agents pestering aunties and uncles to sell their hdbs at mrt station and ntuc in my area.
Sigh…
Is there anyway to save our country? Can someone put some heads into suggestions on this forum?
Is there a way to get international help? Is there a way to throw our garhment ministars and MP, MM, SPM, DPM all to jail in the international stage and make them to serve life sentences ?
Is there a way to take out our CPF monies NOW??? not wait until whatever you name it 55, or 65 or blar blar blar, etc , etc,
Is there a way we can get international countries to help singaporeans now? I guess Singapore really needs international countries to interfere in our state affairs and throw all these idiots garhment ministars , crowns , and all their golden retriever, dogs’ name by the way… to jail and also make their family members to suffer too because they are their accomplices also!!!!
Is there a way to invite all the 22 detainees without trial and bring them to our parliament to serve all singaporeans?
Dr lim hock siew, francis, teng liang hong, zahari, chia thye poh, and many many others….all form a opposition parties as one. And we shall get international governors to help them and overthrow all these current idiots pappies out of singapore and expose them on the internatianal scales, and made known to the whole global world that this current regime is totally a despicable , underhanded and evil garhment .
To:
VerySian:
July 24, 2010 at 4:10 pm
What happened to your email? You gave up that email address?
I sent you an email containing strategies for next GE.
KR
Madness… people are just so panic and push prices even higher but sooner or later bubble will bust and prices will come down and this are the same people who will regret….
I cannot even afford a 2 rm HDB flat now, Singaporean cannot even own a house here and we call this country our Home. this is too much. when will the Property go down. i think to own a flat here, u must die first and let someone burn a paper flat for you. 30K who can afford. HDB are for the rich now.
The main devil should leave this world before the main empire will crumble like a stack of cards. May you r.i.p.
There is no way you stupid Singaporeans can be saved VerySian.Just shut up and obey the PAP. If you rebel, they throw you into dentention camps and cane yr asses like a dog.
Did some idiot really say that? Marlboro, please explain why my son is not able to get a flat after 6 tries?
It is time to relook at the housing policies.
Land is a scarce resource in Singapore belonging to all Singaporeans. Therefore, the govt must manage these scarce resources effectively and equitably. This means that both private and public residential housing must be allocated fairly.
The fundamental principle must be individuals should only own ONE residential property, whether private or public, at any point in time for the purpose of having a roof over their head and not for investment.
The current policy allows individuals to own 1 HDB flat and unlimited number of private residential properties after a stipulated period of occupancy of the HDB flat. Such a situation will enable well to do individuals to make astronomical profits and the less well to do to take on huge mortgage loans in the current spiraling property prices.
It was reported that more than 30,000 units of HDB flats were approved for subletting out the entire unit. This would make these 30,000 flats investment properties in general. Of course, some of these may be hardship cases, but I believe 80% of these owners are also owners of private properties. If we stop this practice and adopts the stated principle above, then we have an additional 24,000 units (30,000 x 80%) available on the market thereby relieving the pressure on prices.
In the long run, such a policy will truly reflect the supply and demand situation of the country housing needs with little investment needs clouding the picture.
In addition, in this land scarce country, foreigners are encouraged to invest in private residential. This further create additional demand for private residential properties and put upward pressure in our property prices. We must hold the principle that foreigners should not profit excessively from scarce resources belonging to Singaporeans. We should impose some form of capital gain tax on the profit made from properties transactions owned by non-Singaporeans.
A lot of Singapore’s GDP growth is construction. And if they stop construction, you’ll see GDP growth go negative quickly. That’s not going to happen because in Singapore, people are rewarded at almost every level of government for making their economic growth numbers. The easiest way to do this: put up another building. So Singapore is really hooked on this sort of heroin of real estate development.
The perception seems to be that Singapore will grow itself out of this situation. But the problem with that argument is most real estate being built is not for the masses. This is not affordable housing for the middle class. That is why the HDB market is so tight now and there are many, many completed condos UNOCCUPIED! Most of these luxury flats are speculative; many are empty and will never be inhabited.
U Singaporeans cannot afford then don’t buy loh.
Leave the resale flats for us.
In the future, I can go back to KL and live. Still can rent out the HDB flat for income. Don’t even have to work anymore.
What is the benefit of high hdb prices as assets if it cannot be sold and the profits used by the owner?
Save your breath, just vote them out in the coming elections.
Singaporeans should cash out and sell their HDB flats for that tidy profit. Go and buy big bungalows in the US, Europe form the sales proceeds and your cpf. Create new businesses and new nodes in those countries and relink back to Singapore for trade and business. Singaporeans should flood the world all over…and create your foot prints. Sell your HDBs to the PRs and new citizens. It is a natural process of a livelihood. U hold on to your flat….you don’t cash out when it is high…wait for it to fall…you sell also don’t get more cash than now. Be smart…and take out your money with it is big on the global scale….not when the other countries have recovered…it reduces in value by then. Do it for your own good. Let the PRs pay you their good money from their country. When and if the bubble burst, they suffer the losses, not you. You want to wait for the bubble to be near burst then sell? Will be too late…now is right time.
Singaporeans should sell their HDB flats and buy the houses in EU and US, for much less, and that will appreciate in real value when their economies recover. Let the bubble burst, the PRs who bought the houses lose their capital, while you gain in your capital. On a nett scale, Singaporeans’ on the global stage, becomes richer. if you don’t sell, you hold on to asset that when burst in a bubble situation, equates to no cash. You will be worse off. So, let the PRs who buy over be worse off, while you buy those overseas and be better off when their economy recovers. You will be welcome back as a PR when the country needs all the funds back one day to save the country.
Many daft sinkies think that if their HDB pigeon holes is worth a million it is a good thing.
Only true if they are migrating or a Ftrash going home.
It is bad because–
1.You pay more property tax.
2.Every consumable item that you pay for rises–you are in fact poorer because of lower purchasing power.e.g. a cup of coffee.
3.Your pigeon hole is still sitting on fast decreasing lease on the land.
4. Physically the whole building is still deteriorating.
Why our country has become like that? So many people homeless liao, jobless, how come singapore become like that?
I really dont know what to say? Hope that opposition parties or other parties like Goh Meng Seng, LTK, Sylvia Lim, etc etc, will win a seat in Tampines.
Sigh…
Dearest Singaporeans, harvest is dawning.
Really hope the property market will burst soon.. But i somehow doubt.
Cos today i read the headlines at ST that the resales markets soars high again.
What a sad stage for singaporeans and the future singaporeans who may or maynot be able to own a home liao….
Hope coming GE will have more opposition parties go inside the parliament.
When you own a property, you only hope it appreciates because you will eventually gain with the appreciation. Why do the people here keep complaining?
The reason I can think of is because you are an anti pap bunch and you people have got nothing better to talk about but to make a big issue out of it.
What you are most afraid of is that the property bubble will burst? It will not since we have new PR who are going to support the appreciation. More units of houses build will eventually be absorbed by the new people. It is not as if it is being purchased for the reason of speculation.
Move on Singaporean, we have to accept the eventuality that houses in Singapore is going to be very expensive.
Sigh…
Really hope to see multi-parties in singapore, or if not another 2 parties govt formed in singapore. Otherwise, singapore really got no hope under one party state…
Sigh….
never stop barking.
They can do what they want in other countries but can’t let others do the same here.
Milking the country dry and offering the cup to foreigners.
Inflation is good for Government, Bankers and Speculators. But not for the 70-80% ordinary people, their savings devalued and the unlucky jobless lots will be difficulty to make ends meet.
SilenceIsGolden is like those “greater fools”(not coined by me) in US and Canada, Ireland, Spain , Uk etc that says housing price will increase foreover, and singapore is different etc. My estimate is that the correction will start in earnest only after 2013 when the huge amount of BTO, condos have been built, unless something drastic happened.
Dubai revisited.
By then, more beggers crowding mom,(young ones) ntuc, robbery,(old ones) killings, loansharks (poor ones)going up, oh its ok.
In Dubai, they are not entitled to citizenship, send them back, but here all are, so the above is result.
This is what life is all about.
What happens to my neighbour is not my business.
As saying goes, the greatest thing a man can do for another is to “lay down his life” for his neighbour or friend.
Jesus Christ did that,,,, anyone else…..
Tibet revisited,
http://www.nytimes.com/2010/07/25/world/asia/25tibet.html?_r=1&hp
The PAP government has intentionally created the high property price to generate more revenue for the government through land sales, HDB sales and the associated taxes. PAP government is not 1% sincere about solving the high property price problem but instead more interested to gain from exorbitant property price. Is it logical that PAP is not aware of the number of immigrants that they are bringing it ? The PAP government is dared to do all these as they are aware that number of buyers is not significant enought to cause a threat for them to hold to the power. Instead, they might get more votes from the sellers who have benefitted from the high property price. The buyers will have to continue to suffer and it is highly unlikely that things will change since the PAP government needs money to cover up their lost in Temesek Holding and GIC. The only possibility for the property price to come to a reasonable level is to pray for world recession !
more than 1 year ago, we learnt from temasekreview that we had a housing problem.
it was a simple problem of supply and demand.
demand was manipulated extraordinary when gateways of immigration were flung open suddenly.
supply was misjudged and the relevant authorities came out to say no problem existed.
time went buy, the problem worsened, the answer still was that there was enough supply.
subsequently there was admission that the authorities were caught offguard, but yet continue to insist they could handle the problem. they plot skewed statistics to show they were right until they got exposed.
more than 1 year into this saga, the final admission came in today’s newspaper.
the problem was, supply and demand.
the problem is still present.
the problem hopefully can be fixed after 1 more year.
after that, it was eery silence.
It is obvious that our property market is the subject of intense international speculation, encouraged by our open-arms policy. We’ll crash like a rock when the time comes.
This prove that PAP government is right! They help Singapore citizen to earn huge profit when they sell their HDB flats to PRs.
Mah in same GRC with LKY?