The Housing Board announced new Build-To-Order (BTO) prices for 7 locations, at Sengkang, Tampines, Jurong West, Bukit Panjang and Yishun. Their asking prices are $137,000 (3-room), $217,000 (4-room) and $274,000 (5-room). Few months ago in May, they demanded $166,000 (3-room), $264,000 (4-room) and $335,000 (5-room). So what happened?
| In May | New Prices | Price Reduction (%) | |
| 3-room | 166,000 | 137,000 | 29,000 (17.4) |
| 4-room | 264,000 | 217,000 | 47,000 (17.8) |
| 5-room | 335,000 | 274,000 | 61,000 (18.2) |
Cost of materials couldn't have plummeted in the intervening months, foreign labour couldn't be that much cheaper, contractors couldn't have suffered sudden pangs of guilt and cut back on their profits. The only variable that can be manipulated that quickly has to be the "market cost of land". Developers will assure you that the market values of land in Singapore have not dovetailed in the last couple of months; some civil servant must have simply coughed up new numbers on demand. While grateful for small mercies, we suspect that 3-room flats can be priced lower, say $80,000, without bankrupting the HDB. SLA may have fewer officers splurging on exotic cars, but that we can live with.
Cost of housing hits the lower income group more than the super rich, as statistics show. Cash premiums - paid on top of valuations - have risen to about $32,000 from $21,000 in the last quarter. This really hurts first time house buyers, whose purchase is usually a HDB flat. Ministers, present or past, and their kin excepted. While a good step in the right direction, the National Development Minister still has a long way to go to build them flats "cheaper, better, fasterer".
Posts
Small Error in your table. The headers should be swapped. i.e. new prices are lower and not higher than May..
ReplyDeleteGreat post though!
anon@9:40 AM,
ReplyDeleteI stand corrected, thank you!
PAP must have been living up to its name of making the people just pay and pay for so many years. To put it simply, if that is not concrete proof of our PAP govt's greed, then what is ?
ReplyDeleteSo for those who just got their new HDB flats not too long ago, they must be cursing HDB & MBT now for making them pay over tens of thousands over their lifetime for nothing.
But on the other hand, our President and the cabinet must be thankful to such Ministers for a different thing for sure, their obscene salaries, derived from sort of robbing Paul to pay Peter, I suppose.
Lets hope HDB gets cheaperer and cheaperer...
ReplyDeletehmm... new prices are higher not lower.
ReplyDeleteYou took different locations and generalise them. If you take a specific location like SengKang; Fernvale area, the appreciation for 4 room flats is from June 2010 of 215K-280K to Feb 2011 of 240K-311K to July 2011 of 246K-337K. Average out the range and its from 247.5K to 275.5K to current 291.5K. Notably from Feb 2011 average of 275.5K to current July 2011 average of 291.5K, the price went up 5.8%. And this is over 5 months. If its over 13 months, the appreciation is 17.7%. But to be fair, the prices did not come down and just went up abate slower.
June 2010 Fernvale Foliage, Feb 2011 Fernvale Flora and Garden then July 2011 Fernvale Rainbow are the BTOs. All standard flats.
ReplyDeleteBoth SLA and HDB won't really fudge the land prices, at most +-5% but definitely not +-10% or more. It doesn't make sense for them to do so.
ReplyDeleteLegally and technically speaking, HDB doesn't even sell the land to HDB buyers. The land asset still sits in HDB inventory and is still part of national reserves. At most, HDB & SLA lose out on opportunity cost i.e. they could have sold to private developers for fat profits, but instead have to hold the land and build public flats on it for the masses.
The actual cost to HDB for building public flats is merely the construction costs (and of course the admin costs such as salaries, bonuses and the annual D&D). Current total construction cost of a BTO 5-rm unit is $140K. HDB won't lose money just as long as they sell new flats which can cover the construction cost plus the admin cost to run HDB. But of course govt loses big time as they will lose a huge chunk of revenue if HDB is strictly operated on non-profit basis.
HDB can still play with new flat pricing by playing around with the "market subsidy". They have a relatively wide margin there.
Being the largest developer in Singapore, HDB has reduced the floor price for all properties by almost 20%! If more HDB releases more units at this latest price, wonder how much longer our inflated property market will continue to hold? Relief for ordinary singaporeans finally coming through
ReplyDeleteNo relief, pricing is just different for different location. The 20% reduction never take location into consideration thus flawed.
ReplyDeleteDont' be too quick. At $274k for 5rm it is starting to look a tad more reasonable. However if you look at the recent pasir ris 5rm resale transaction it just went for $900+ almost close to $1m..That's still a freaking 3x times increase while the lease tenure has presumably reduced.
ReplyDeleteThe market needs to cool down further, particularly the resale mkt still remain unaffordable for those who need it.
Maybe that's how SG has become the millionaires city as defined..
http://www.dasinvestment.com/fileadmin/images/pictures/0907/BCG_2011_0106_Global_Wealth_Report_client_version_May2011.pdf
There are always those who need a roof, and those trying to flip a property for monetary gain. Latter flock towards the higher priced, where each percentage point represent a bigger sum in dollar returns. Agents will also target these, for the larger commissions. HDB should focus on providing basic affordable housing, and let the greedy forage among the wolves. If Khaw can separate the wolves disguised in sheep's clothing, he deserves a good night's sleep.
ReplyDeleteAlert! Alert! Alert! MBT is turning in his grave... because KBW is raiding the reserves by lowering HDB prices! Oops, MBT is not dead yet? I may be way off base but I think most people would prefer otherwise.
ReplyDeleteanon@6:16 PM
ReplyDeleteOmigosh! You're right! Better telephone the Istana quickly - at least the Selected President can have something useful to do after 12 years of sleeping on the job!
Philip Yeo is right. When the government fears the people, they become stupid and sell their wives and daughters cheap.
ReplyDeleteWell, the homebuyer pimps will be grateful they get to screw their wives and daughters cheap because when these pimps are done with them, they will put these meat back in the market at a much higher price like...$900K?lol
Way to go idiots.
In land scarce and prosperous Sin, land and housing cannot be cheap. That's reality check number one. The gov should just work on a "robin hood housing system" by taxing the rich( let market forces dictate the value of land/housing) and with subsidizing the cost of housing for the lower income group with the revenue generated. And at the same time, ensuring capital gain from sale proceed of homeowners be locked in their CPF. These measures will deter speculation, encourages long term investment and stabilizes the market.
ReplyDeleteAt this stage, the possibility of a "Robin Hood" style housing system of taxing the rich more to give to the poor and unprivileged seems to be alien to Singapore. Imagine, you have ministers who said that nationalised transport is "populist" and not sustainable. So, according to him, does that mean making citizens pay more for bad transport services, especially the poorer ones, is sustainable? That is a load of ............... as for the issue of asset enhancement which has been shoved in our faces nonstop, I guess they are using the asset enhancement logic in the area of workplace employment, giving out free citizenships and permanent residencies in months and weeks to people from other countries in the belief that they will "enhance" Singapore's value, at the same time, making sure "old assets" like us--the local citizens--are displaced or left to fight for ourselves.
ReplyDeleteIdeas must be workable and realistic. So long as we continue to generate wealth, scarce resources will it value rise. If we put a lip on it, it will come out bursting at the seam somewhere else. Might as well go with the flow, take from the richer, otherwise they will squandered in frivolous spending, and lift those at the bottom through subsidies taken from the rich.
ReplyDeleteA win-win. It is almost like buying "cheap" especially when homes are heavily subsidized for the under class.