Tan Kin Lian's Blog: Price of new HDB flat

Tuesday, January 05, 2010

Price of new HDB flat

I wanted to carry out some research into the cost of a new HDB flat, to see if it is still affordable. I had a difficult time to get the relevant information.

I visited the HDB website to find out what is the price of a new flat. I found this page but could not get the information that is needed. I was only able to find the prices of resale flats here. I don't know why HDB don't want to publish the price for new flats in a similar table, as this is helpful to home seekers.

After some effort, I was able to find some information about new flat prices from the HDB annual report but I was quite surprised at the wide range of prices (difference of up to 50%) for the same type of flat in the same estate within a period of one year.

Maybe, HDB wants to peg its place for new flats based on the market price for resale flat and for new home owners to be given a housing grant. I did some search for this grant and came to this page. It seems to be quite complicated to find out about the amount of housing grant that the buyer can get.

I do not know why buying a new HDB flat should be made some complicated, with no published price list for new flats and a complicated structure for the housing grant. I am afraid that, with this type of complexity, many people will not be able to make a sensible decision about getting the flat that they can afford, which is convenient for them to live in. It would be better if things are made simpler, so that the ordinary people can make the right decisions.

Tan Kin Lian

20 comments:

Din Huzir said...: I agree with your Comments. HDB Brand New Flats Should NOT be Priced very high. For the benefit of the Singapore Citizen and NEW Home Owners the Prices Should be tagged Affordable and Cheaper with higher subsidy. Even in America, Australia, etc. prices of Home Properties are kept affordable within the reach of its Citizen. Otherwise, what are Governments who doesnt Care for !; January 05, 2010 1:40 PM
C H Yak said...: Hi Mr Tan

I am also in the midst of doing a research,hoping to understand more about the recent hike in prices for new HDB & resale HDB flats, with some personal data.

In connection with your separate posting "Affordable HDB Flats" following the Minister of MND 's speech, I had made a certain suggestion (see quote below). I like to get some feedback if a segregation of market for new and resale HDB flats would work to contain HDB prices. Any comments from you and visitors to your Blog? I do not think it as "complicated" as someone has commented.

Quote
"The first HDB property which is said to be heavily subsidied by the state must be sold back to the Govt at cost. The Govt can then re-sell at near cost based on adjusted price with some appreciation in value to another first timer or second timer.

A first-timer who wants to upgrade to another bigger HDB flat or if he moves on to a private property, should sell back his first HDB flat to HDB at cost.

A second time HDB owner should either buy from the open market market at higher price or he should be allowed to buy from the HDB at an adjusted price (not subsidised) higher than cost (subsidised) but lower than market price. If a second timer chose to buy from HDB, he should sell back to HDB again. If he buys from the open market he sells back to the open market and not HDB.

There would then be 2 markets for HDB flats. The HDB should not behave like a private developer. It should managed one market for first timers and also those who prefer to buy the second time from HDB and keep the prices in this market low.

Those who choose to venture into the open market should transact at open market prices later on. For choice units bought back, the HDB should be allowed to release them into the open market but these would not be purchased back by HDB at open market prices.

Those who already enjoy 2 times purchases from HDB should only be allowed to transact in the "open" market i.e. they cannot purchased from HDB again.

This way the fluctuation and escalation in prices should be contained.

At present the HDB are pushing out new flats at high prices be it BTO or whatever and they are catching up close with private property prices. These new owners also expect a ridiculous appreciation in property price 5 years later. This appreciation is causing the escalation and "bubble" in HDB flat prices."

December 30, 2009 4:24 PM

Unquote.; January 05, 2010 1:55 PM
Anonymous said...: Unlike other countries, the Spore Govt is in a good position to manage overall property prices as HDB flats constitutes a significant proportion of the total number of housing units here. The govt should press home this advantage and prevent property prices from rising further.; January 05, 2010 2:01 PM
Anonymous said...: Check the total contract sum awarded to HDB main contractor.

From there divide it by the total number of units, you will get the cost of construction per unit.

The difference between the construction cost and the selling price, you will know the amount of profit HDB is making.

HDB will not be so stupid to put up this info at its website.

If LKY is not stupid do you think HDB under the care of MBT is stupid?; January 05, 2010 2:44 PM
Anonymous said...: I'm not surprised at the price gap since a property is a property, and will always be driven by location, design etc. People (or so call ordinary people) would want the flat to be as cheap as possible, and in the name of public housing, it has to be even cheaper. But when come to selling the flat, all become advocate of market price and most will find every opportunity to sell above valuation. Is there anything wrong? No, as this is market force and I don't see this as problem. It all depend whether you are a buyter or a seller, and I agreed that if the country can afford, it should help those to find a 'home' especially, first timer or the less fortunate one. In fact, most HDB owners are sitting on huge pile of profit, so why the complain when most would expect to want to make money when is their turn to sell. Let be more objective and fair, and be realistic if you are hunting for your first flat. Has my comment got anything to do with Mr Tan research, well, it depend how you see it and not too sure about you, I am trying to see the objective behind the objective of his research?; January 05, 2010 3:23 PM
Anonymous said...: For prices of new HDB flats, you need to go into the individual BTO projects, as and when HDB puts them up for public offer. When the BTO deadline is up, HDB tends to disable the link for people to go in to do research or price tracking etc.

Using the latest BTO project in Choa Chu Kang as example.
Details can be found here:-
http://www101.hdb.gov.sg/hdbvsf/eampu01p.nsf/0/10JANBTOCCK_page/$file/10JANBTOCCK_about1.htm?open&ft=bto

For new 4-rm units, pricing ranges from $226K to $278K. Let us take the middle of $252K as representative.

Then you can go to the HDB resale transaction database to search for similar flats nearby that have been sold recently. For this example, I want to know how much 4-rm flats in the vicinity (say Choa Chu Kang St 52) have been sold in Nov & Dec 2009. I use the below link to find out:-
http://services2.hdb.gov.sg/webapp/BB33RTIS/BB33PReslTrans.jsp

I got five 4-rm flats in CCK St 52 sold in the last 2 months. Average selling price was $347K.

So a very very rough estimate of HDB's "market-based subsidy" would be ($347K - $252K)/$347K = 27.4%

As for the actual costs of building a new HDB flat, you can keep a look out for HDB tenders and awards in the GEBIZ website. The awarded contract will spell out the price for the HDB BTO project. Dividing by the total number of units will give a rough estimate of the actual building cost per unit, including for common areas such as playgrounds, gardens, carparks, covered walkways, community areas etc etc.

A more hardworking person can search for the tender for the CCK BTO (which may not be awarded yet) in GeBIZ, and continue the above example. :-)

Ex-Con; January 05, 2010 3:49 PM
Anonymous said...: Hi,
A followup to my initial post above.

It's quite obvious that HDB likes to keep it's pricing structure and policies for new flats as untransparent as possible.

This allows for the new flats' prices to be always linked to the resale prices, say at 75%. Hence prices of resale HDB flats is always made easily available -- they even have graphs and charts going back 10 yrs or more. But new flat prices need to be recorded and tracked on your own.

I won't be surprised if average actual building costs for a new HDB flat (excluding common amenities) to be not more than $80K.

You can infer from the HDB's fire insurance --- sum insured of $75K for 5-rm flat and sum insured of $92K for executive flat.

http://www.hdb.gov.sg/fi10/fi10206p.nsf/WPDis/Fire%20InsurancePolicies?OpenDocument

Ex-Con; January 05, 2010 4:03 PM
Anonymous said...: Hi Mr Tan,

In terms of determining overall affordability, it may be better to compare the annual % change in the median salary of S'porean with the annual % change in HDB resale market (since price of new HDB flats are pegged at certain % of resale prices).

Also, SingStat probably has info on the percentage of housing costs compared to total typical spending over the years. A rising percentage would hint at housing increasingly taking up more of S'porean's salary. I.e. Salary is not keeping up with housing prices.

Ex-Con; January 05, 2010 4:20 PM
Anonymous said...: Hi Mr Tan,
There was a recent report in the papers that the rent of a room in Duxton was S$1k.
Are we living in a crazy world?; January 05, 2010 5:55 PM
kfc said...: The increase of HDB flat prices are not consistent throughout Singapore. Some places such as Woodlands and Yishun still have many very affordable resale HDB flats. Bear in mind that older HDB flats in Woodlands are much larger than other estates. For example, an executive flat in Woodlands can have an area of 172 sqm and sold for about 470K. If young people are not too choosy, they can still find big and reasonable priced flats in Woodlands and Yishun.; January 05, 2010 6:16 PM
Anonymous said...: HDB is one of the worst organizations in Singapore public service/history. I award them the worst public service provider, because no competition like StarHub, SingTel.

Would like to hear from the guy who was banned from buying HDB flats a few years back because he so feed-up with HDB that he spammed them a few thousands of emails in a day. Is this a just nation? I think HDB is the main culprit for his action. No other SG gov org has ever been able to repeat this achievement. Also to banned him from public housing is also not really RIGHT thing to do. Should have study what is his crime, and fine or jail him according to Singapore law. Why does HDB take things into their own hand, and meted out sentence, as though they are the judge in Singapore's justice system. Give me impression we are primitive society with warlords. No feelings for our people. Where is compassion in SG society? Even a rapist can get out of jail and apply for a flat.

I would grant him royal pardon if someone vote me in as SG's next President. It is not his punishment. His family who is innocent also get punished.

I request someone to post on this blog the newspaper article on this case. And debate whether he should be pardoned and be forgiven due to a moment of anger & folly. May God bless this poor soul.

By Rain-maker; January 05, 2010 7:47 PM
Anonymous said...: Mr Tan you are absolutely right!

If I was running a commercial company I would love to have all information on the properties I sell to be difficult to find and not easily understood ESPECIALLY if I have a monopoly on the properties.

Bravo for having the guts to give your insight into this issue - ie That INFORMATION about new flats and all other kind of related price information easily accessible, transparent and easy to be understood and analyzed.

Three cheers to Mr Tan. I hope you stand as an MP in a single ward or better still in a GRC .You could single handledly give the ruling party such a headache !; January 05, 2010 8:53 PM
Anonymous said...: I was browsing the GeBIZ website (www.gebiz.gov.sg). Interesting place to see the various tenders and projects by different govt agencies.

Apparently HDB will not call tender for the actual construction of BTO projects until they get adequate response from the public first. But you can see the tender amounts and awards to various contractors for past HDB projects.

For e.g. a recent tender called for 4 HDB blocks of 10/20/32/40-storeys in Queenstown / Commonwealth area (total 774 units). This is for enbloc redevelopment. Although the tender was closed on 25 Nov 2009, but still not awarded yet. The lowest bid was for $98.3 million. Hence if HDB awards to the lowest bidder, then the average construction cost of a unit will be $98.3 million / 774 = $127K.

And how much are new HDB flats going for in Queenstown / Commonwealth area?!? :-)

Ex-Con; January 06, 2010 2:07 AM
Tan Kin Lian said...: Hi Friends,
Thank you for your excellent contribution. I may write a longer article based on the feedback that is received here.

I agree with the idea put forward by C H Yak, that is is possible to create two markets for HDB flats - a market based on cost price and a market based on market price.

I have written a similar idea in my blog earlier. I believe that it is workable.

I also agree with the suggestions that the HDB (ie. Government) is able to control the prices and have a more stable market that reflects the earnings level (rather than a market that is driven by speculators and profiteers that take advantage of the ignorance of buyers, due to non-transparency of information).

I have written a separate article on this matter, i.e. a new way to price HDB flats.; January 06, 2010 9:00 AM
fievel said...: Mah Bow Tan does not have the grace and integrity to admit his mistakes in his failure to provide ample public housing supply.

I had done a bit of research on supply and demand numbers a few months ago and you can read about it here
http://whomovedmysingaporecheese.blogspot.com/2009/09/who.html

As a quick summary, we were incepting an estimate of 70,000 new PRs and 20,000 new citizens in 2008. The number was about 50,000 new PRs and 15,000 new citizens in 2007. These figures do not take into account the natural demand from, for the lack of a better term, original Singaporeans. Yet, HDB only gave the nation a measly supply of 2,400 new flats in 2006, resulting in the current supply crunch.

Some less enlightened person might argue that the demand was measured by the "orders" since it's a Built-to-order, but the government should at least have foreseen the price pressure that would build up in the resale market from these large number of PRs isn't it?

Mah Bow Tan holds a Master's degree in Operations Research from UNSW in Australia. Supply management should be child's play to him. Such utter mismanagement cannot be excused, million dollar salary or not.

Why is it that he does not get checked by other ministers or higher powers that be? Why isn't PM Lee making any statements about this problem? Why is MM Lee still saying it is a good thing that prices continue to rise?

It's overall a very disappointing show of governing abilities, IMHO.; January 06, 2010 2:40 PM
Anonymous said...: I agree. With my current salary, it is not possible for me to affort a new flat unless I save up for 10 years to pay the downpayment or I have to take a loan in which I have to pay even more.; January 07, 2010 10:42 AM
Anonymous said...: If you cant convince them, confuse them

- Harry S Truman; January 08, 2010 1:36 PM
Anonymous said...: The pricing, eligibility, grant, etc etc is indeed very complicated. Probably by making things complicated, people will look more busy and somehow create more employment! There are so many things to sign and criteria to meet which most of them criteria never stay. We are purchasing a flat at the price of 300k, and yet i have the feeling that i am the service provider and they are the customer! It somehow makes me feel that we are indebted to them that they sell us the flat.

I still have an ongoing case with hdb about loan approval for a build to order flat. My CPF is more than sufficient to pay for the initial downpayment, but I have issue with my hdb loan application.

To be honest, I cannot understand why they are accessing loan eligibility for a loan that you are not getting now. Shouldn't these be accessed at the time when you are getting the loan? We are all living in a dynamic, not static world, how would you know your financial status 4 years from now? If we start paying for the flat once they start building, it somehow makes sense that we need to access our loan eligibility at the point of purchase, but this is not the case, the monthly payments only start when we get the keys. That is the rules that is set by them.

Lastly, hdb are meant to help the public meeting the housing needs, no? if so, then shouldn't they should be rejecting loans for over requirements, but not under?; January 11, 2010 5:23 PM
Anonymous said...: There are lotsa middle income owners who paid fully for their HDB flats and bought another private property, likely a freehold fully paid as well. Most are enjoying life in the private property and renting out the entire fully paid HDB flats for side income. This may be a reason for lack of supply of subsidised flats. My guess is there is a sizeable number of people operating this way now. Is it illegal to do this?; February 12, 2010 3:54 PM
Anonymous said...: hi,

Found this which maybe helpful in your research. It contains the price of new flats for year 2008/09. My guess would be that there are similar stats for other years. Good luck. Looking forward to your findings!

http://www.hdb.gov.sg/fi10/fi10221p.nsf/0/d4a0f107613b79944825766200236310/$FILE/Key%20Statistics.pdf; June 22, 2012 12:48 AM

Tuesday, January 05, 2010

Price of new HDB flat

20 comments:

Blog Archive