Hdb Prices Can't Go Up Anymore

[Misc100 2]

I think HDB prices are now at its peak.

With private properties likely to fall 30-40% from now till 2010, it is interesting to note that HDB prices can hold so well.

But my thinking is that the government will always keep prices low, eg increase the supply, as public housing is always for the masses.

What you guys think?

[yoongf 11]

..... the government will always keep prices low, ......

This mindset is incorrect. The govt does not control property prices. If u believe it does, there cannot be any meaningful discussion on this topic.

Construction material costs are going up. Govt is introducing many new building codes which all translate to higher costs, be it for the "sustainable construction" or "fire safety" or "green" or "handicapped" or "foreign labour" argument.

One thing is for sure.. construction costs will not get cheaper.

What new HDB prices will be in the future... is all policy driven. Maybe sell higher margin to cover subsidies rental flats for the needy. There are much more HDB flat owners than new entrants, and it's in the interest of existing HDB flat owners to see prices remain or go higher. Therefore.. my view is.. same or higher.

[hihihi 0]

But my thinking is that the government will always keep prices low, eg increase the supply, as public housing is always for the masses.

Absolutely wrong. Firstly, resale prices are controlled via valuation when seller wants to sell his/her flat. With this in mind, New HDB cannot be alot cheaper than Resale HDB. Therefore with the resale pricing as a benchmark, new HDB will be somehow tagged along to that price.

Hoping Gov to keep prices low? They can, and they cannot. Example: if a Sengkang flat sells for 300k, then resale at Sengkang can hardly go sub-300k.

Supply is there, in the ulu forest of Sengkang & Pongol, just that few pple wants to live in that area. That's why there is a recent policy implemented: couples who took a queue number and later abandon (perhaps got a queue number that is too big?), will suffer a probation of 1yr cannot take new queue number.

[Misc100 2]

The new hdb prices is based on the resale prices. Yes. That is true.

But what had contributed to the high resale prices is a short of supply and a sudden great influx of foreigners.

With the economy going bad, manufacturing retrenchments, the resale prices cannot be sustained.

And the govt is trying very hard to build more new flats. The supply will always be there now.

And the govt want to get more young people to get married, so they won't want to sell high new hdb flats, so that they cannot afford and cannot get married.

Just my points, not starting an argument.

[yoongf 11]

Allow me to rebutt, but I wish to qualify that I am not speaking as a layman.

In the HDB market, there was never a supply shortage. It is not a case of the failure of the supply demand curve, rather, at a certain price, there was insufficient sellers in the market. HDB construction in Ponggol was decided long ago, when the govt made a commitment to the transport operators to increase population there to support the MRT/LRT operations. HDB has learnt their lesson in Ponggol not to overbuild, as such there will unlikely be a situation where oversupply results in price decline.

Prices go up due to optimism, but when there are few or no transections, prices do not come down but remain stable. Prices drop only when there is substantial forced sales.

HDB is a unique asset, cos it is immune from bankrupcy proceedings. If a breadwinner is in financial difficulties, the last thing on their mind is to sell the flat, so.. bad economic times will not see a drastic fall in HDB prices. As for private investment properties.. the decision to sell is very fast, resulting in dramatic price decline.

New HDB flats are valued at market price. The various grants to assist first time home owners are a totally seperate issue, and cannot be used to derive the eventual price of a HDB flat. A Lambo list price is $1Mil, but just because I bought the display set at 40% off, it does not mean that all Lambos are valued at $600K.

[MaCe 3]

The new hdb prices is based on the resale prices. Yes. That is true.

But what had contributed to the high resale prices is a short of supply and a sudden great influx of foreigners.

With the economy going bad, manufacturing retrenchments, the resale prices cannot be sustained.

And the govt is trying very hard to build more new flats. The supply will always be there now.

And the govt want to get more young people to get married, so they won't want to sell high new hdb flats, so that they cannot afford and cannot get married.

Just my points, not starting an argument.

the gov doesnt give a D**M about you or any citizens. They do care more for FTs though.

this sudden influx of FTs is not SUDDEN when they open the doors.

5 yrs down the road you will see a LOT more FTs coming in.

[yokine9a 1]

5 yrs down the road you will see a LOT more FTs coming in.

I have already seen the effect now.

I was away from S'pore for 3 yrs & when I came back end last yr, I was so surprised that I was surrounded by so many China Chinese.

3 yrs ago, very rare would I get to see an angmoh walking on the street in TPY. But now? I have seen a handful of them almost every week.

I cannot imagine how S'pore will look like 5 yrs down the road

[tingshen 0]

Singapore itself is almost 100% "made by" FT, including our Henry Lee. So what's the issue with FT coming in? Do not discriminate. I do agree that quite a handful of them are giving social problems, it doesn't mean without them you will have a social problem free society.

Talk about HDB price, government already stated very clearly that they are not going to care about your welfare after you retired. They are not going to let you bug them for money. that's why they are promoting so hard on retirement planning. Everything has both sides. The Pro is, they dun need to worry about people abusing all these schemes, only the real needy can approach them for the real help. Afterall, you got a job, you got a place to rest, still not happy? why not join the opposition and fight?! I salute my friend who challenged the PM in AMK GRC. I hope to see similar activities in the future, provided they dun just play play show off kind of thing. Dun forget, PAP was an opposition! *too bad I am not a Singaporean....

There is another option, leave the country and pursue your own dreams

anyway, to control the HDB price, very simple, stop supplying the high demand units, high demand low supply, you think the price won't go up automatically? Try calling everybody stop property trading for long period, you will know it doesn't work.....

Edited August 25, 2008 by tingshen

[tatlee 0]

Allow me to rebutt, but I wish to qualify that I am not speaking as a layman.

In the HDB market, there was never a supply shortage. It is not a case of the failure of the supply demand curve, rather, at a certain price, there was insufficient sellers in the market. HDB construction in Ponggol was decided long ago, when the govt made a commitment to the transport operators to increase population there to support the MRT/LRT operations. HDB has learnt their lesson in Ponggol not to overbuild, as such there will unlikely be a situation where oversupply results in price decline.

Prices go up due to optimism, but when there are few or no transections, prices do not come down but remain stable. Prices drop only when there is substantial forced sales.

HDB is a unique asset, cos it is immune from bankrupcy proceedings. If a breadwinner is in financial difficulties, the last thing on their mind is to sell the flat, so.. bad economic times will not see a drastic fall in HDB prices. As for private investment properties.. the decision to sell is very fast, resulting in dramatic price decline.

New HDB flats are valued at market price. The various grants to assist first time home owners are a totally seperate issue, and cannot be used to derive the eventual price of a HDB flat. A Lambo list price is $1Mil, but just because I bought the display set at 40% off, it does not mean that all Lambos are valued at $600K.

new flats will not get cheaper, if construction costs dont come down.

i think it is possible to have new flats oversupply situation in Punggol 21 area. Esp BTO projects that are half sold. Enough sold to start projects. But not totally filled.

resale is half-restricted mkt. some resale are financed by bank loans, not HDB loans. so it is still possible for resale HDB prices to come off when people cannot pay. Esp when more jobs loss. Banks not as kind when banks have 1st charge over CPF.

[hk203 0]

The property price will go down if:

1. We are going into war

2. Suffer severe financial crisis

3. New disease pandemic

4. Natural disaster/terrorist attack

Other than this...I don't see the price will go down significantly.

[TPY 0]

How do we measure peak? I There is no cap to it but only suppy and demand today.

[zirhk3355 1]

new flats will not get cheaper, if construction costs dont come down.

HDB already mentioned they are pegging the HDB prices to market prices; so it has nothing to do with construction costs anymore.

About prices going up or down, I think the fact speaks for itself: Compare the prices of the same flat from 20 years to now, you can see a 4-rm flat rising from $60K to $300K, or 400% increase. But for private properties, you probably see something like a 3-bdrm unit rising from $400K to $800K, just a 100% increase.

And we still have not consider price stability: A $700K private property today can fall back to $400K-500K in bad times, but would you think its possible for today's $300K 4-rm flat to fall back to $60K-70K??

Like yoongf said correctly, its always the last thing on any owners' mind to sell their flats in bad times, not forgetting all the levies and penalties for downgrading. Till now I have yet to see anyone selling their flat at a huge loss, but only see people buying flats at huge prices.

IMO, HDB prices will either remain stable or go up, it will seldom come down very significantly.

How do we measure peak? I There is no cap to it but only suppy and demand today.

Correct; its only after a few months and we realised that the prices are never going back up, then we will know ahh, THAT was the peak...

[Misc100 2]

I think whether construction costs go up or not, the government still make a profit from selling hdb flats; just that the profits will be lower.

A friend of mine who is 30+ yrs old, his pay only $1500. His CPF ordinary account less than $20000. And there are many like him in Singapore. He want to buy a cheap 3-room flat also not easy.

His parents are no longer around so he cannot get the stay-near-parents subsidy too.

That's why I think if the hdb prices keep going up (which is already super-high), it goes against the government stand of an inclusive society.

The government can keep increasing the supply to curb the price rise.

Edited August 28, 2008 by Misc100

[yokine9a 1]

That's why I think if the hdb prices keep going up (which is already super-high), it goes against the government stand of an inclusive society.

That is just a nice-looking picture painted by the gov lah. They will probably step in to start controlling the hdb prices only when too many people (who cannot afford a hdb flat) are sleeping on the roadside

[zirhk3355 1]

I think whether construction costs go up or not, the government still make a profit from selling hdb flats; just that the profits will be lower.

A friend of mine who is 30+ yrs old, his pay only $1500. His CPF ordinary account less than $20000. And there are many like him in Singapore. He want to buy a cheap 3-room flat also not easy.

His parents are no longer around so he cannot get the stay-near-parents subsidy too.

That's why I think if the hdb prices keep going up (which is already super-high), it goes against the government stand of an inclusive society.

The government can keep increasing the supply to curb the price rise.

The qualifying income criteria for HDB rental flats (rent direct from HDB or EM Services) is $1500/mth. Though there's another criteria for family or married couple only, its possible to appeal if there is real hardship.

If you are saying that your friend does not wish to rent, then maybe its his mindset that needs to change. We cannot compare to those days where our parents earning $1200 can afford to buy a flat; those days a bowl of noodles only $0.50. With inflation, we either need to work hard to increase our income, or live within our means. There are always needs and wants; we got to decide what's important. And not meeting your friend's "wants" does not mean the govt is outcasting him or there's no inclusive society.

Next, increasing supply of new flats also does not mean prices will come down; in this current situation of high properties' prices, we STILL have alot of new flats not occupied and we STILL have people buying resale flats at $700K. So the equation of more new flats = lower prices is actually incorrect.

Ok, let's just assume that increasing ALOT of new flats, MAYBE can really curb price rise, but it still rings hollow towards the ultimate objective of national development. Price too high, people cannot afford. Price too low, existing owners suffer. Either way, there will be hardship; existing owners with bank loans may even go bankrupt and have their flats foreclosed! So where do you draw the line? How many new flats to be built? How low do you want the price to go?

IMO, in terms of "helping", the govt should use taxpayer's money for those cases in real hardship. Anything else, the market should decide for itself and not nanny us like 3-yr-old kids. So for your friend, advise him to go see his MP if he is keen to take rental flat; I think the MP should be able to help.

Edited August 28, 2008 by zirhk3355