Sunday, November 04, 2012

Affordable housing - a new category of HDB flats

The Singapore Democratic Party has proposed the creation of a NOM (non-open market category) of HDB flats. They will be sold at cost of construction and can only be re-sold back to HDB at its posted price. See details here.

This is similar to the proposal that I have made in my blog and Facebook two years ago. My recent survey also indicated that the general public is in favor of this new category of flats.

Here is my suggestion on pricing of flats under the new category (posted in 2010)


CreateWealth8888 said...

It sounds more like 'rental' HDB flat since the property owners are unable to monetize their assets significantly when they need the money.

Lye Khuen Way said...

The SDP does have talent !
And compassion for fellow Singaporeans.

Yes, I recalled Mr Tan proposing a similar category of public housing.

If only, it was possible with massive "refund" of a sort, public housings should revert back to the days when all were rental only.

The mess we find ourselves in, were caused by policies that enabled PRs to buy resale flats and a resale policy that promised "asset enhancements". It got worse, when new HDB flats prices were pegged to market rates with miserable discounts and pushed as affordable.

Terence Soon said...

Mr. Tan, the govt has repeatedly refused to release info regarding the cost to build hdb flats. Do you personally have any idea or a rough estimate as to the costs?

My girlfriend and I are now thinking of getting a BTO, and it's worrying that the govt is not doing much to curb the prices, even of BTOs. Numerous cooling measures have failed, and young buyers like us are looking for alternative options.

Thank you.

yujuan said...

Govt knows the dilemma faced by the young in setting up homes, and have difficulty buying their first homes.
But they dun dare to act because they have pushed themselves into a very tight corner, they could only resort to stop gaps here and there to try to contain property prices.
Crashing the market could cost them to lose the 2016 Election, and collapse of the FIs who provide mortgage loans to a large percentage of foreign and PR purchasers.
All foreigners get to do is pack their bags and run, dumping homes for banks to foreclose.
It's a nightmarish scenario for both the Govt and the Banks, the latter the core of Singapore's Financial Centre. We have seen foreigners forsaking properties in Dubai, and the demise of Banks in Ireland due to property collapse, dun say won't happen to Singapore.
SDP's proposal of a special HDB enclave for citizens to own flats is done in good faith, but people, both citizens and PRs, who bought flats recently at peak prices would be howling in protests. Our leaders have really trussed themselves up like stringed up crabs in the wet market, can't move.

C H Yak said...

I recall writing in my blog in Feb 2010 to support MR Tan's concept too on such a "dual market" system.


I checked SDP's recommended NOM Scheme Guide Price...although SDP said their prices did not factor in "land costs" long experience in the construction industry tells me they actually had factored in land costs...LOL.

You can read about my costing in April 2011 (below link) for a typical 5 Rm flat considering both land & construction costs.

Kin Lian Tan said...

I have carried out two surveys recently in Facebook (where the respondents are named) and in Survey Money (where the respondents are anonymous.

Both survey indicate that the majority of the HDB flat owners do not mind having the new category of HDB flats, and they do not mind seeing the value of their flats drop.

It does not matter to them, as they might have bought the flats cheaper or they are not thinking about selling the flats, so the value does not matter to them. Maybe, they were thinking about the benefit to their children - in paying less for their HDB flats.

My finding was quite a surprise to me - that so few of existing flat owners "howl in protest".

The Government can carry out their own survey, if they need to verify the actual sentiment on the ground. I think that the findings will be the same - let us introduce the new flats at 30% to 50% lower in price!

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