Asset Enhancement Works Only With A Second Home

[gimz63251073 0]

Extract from ST:

Asset enhancement works only with a second home

I REFER to Mr Tan Jiaqi's letter on Monday ('Perils of asset enhancement for younger Singaporeans').

Assuming that a home is a necessity to a family, the family's asset is not really appreciating as other home prices are rising in tandem. Only when the family acquires a second home can it be truly said that the asset is appreciating in value.?

For those yet to own property, asset enhancement is a form of inflation; for those who own a single apartment or house, asset enhancement matters little; for those who own more than one apartment or house, it is truly asset enhancement.

Jeremy Chen

Better an affordable home, than asset enhancement

THE Government argues that by enhancing the value of HDB homes (read: increasing the prices of homes), it gives a valuable asset to Singaporeans and a stake in the country ('WP's housing proposal irresponsible, says Mah'; April 15).

I find this problematic on several counts. First, for the majority, the home is an indispensable basic necessity, not a disposable asset. When prices of homes increase, the average home owner is not able to gain from it - while he is able to sell at a higher price, it also means he has to buy the new home at a higher price. Only the rich who can afford more than one home stand to gain.

Second, it deepens the divide between the haves and have-nots, for those financially less well off either find homes slipping beyond their reach, or face the heavy burden of financing a huge loan.

Third, the objective of asset enhancement through rising home prices naturally conflicts with the objective of providing affordable housing. It is tough to balance the two and implement effective policies.

Fourth, the argument that asset enhancement ties Singaporeans to the country holds little water. Anecdotal evidence suggests that people who emigrate cite 'unaffordable housing' as a reason among others. Ironically, the rising property prices here means emigrants can use the gains from the property to buy a 'more affordable' home in a foreign country. In fact, a majority of Singaporeans are displeased with rising home prices.

Instead of thinking of increasing prices to enhance the 'asset value' of the home, we should start to recognise that an affordable home is an asset in itself. Keeping home prices low and affordable means Singaporeans, especially young people planning to start families and buy their first home, can rest assured that they will always be able to own a place to call their home.

I think this would provide a more rooted sense of belonging than that of an expensive house. We need to recognise that we are deriving much utility from that house even if its resale price remains stagnant. We need to appreciate that while stagnant prices may mean little capital gain when selling the current house, it also means not having to pay through the nose for the new one.

Let us go back to the primary objective of public housing - to provide affordable housing to the majority of the people. Let us recognise that affordable housing is an asset in itself, both to the individual and the nation.

Lai Nam Khim

Letters that make common sense. But common sense is uncommon.

Edited April 21, 2011 by gimz63251073

[shaowei14 0]

Indeed very true, asset enchancement looks good only for paper profits..beside the 'feel good' factor to the house owner, there is nothing else and even worse off for having to pay higher property taxes.

Aseset enchancement only works for the rich that is able to own 2 or more properties.

To 1st time house owners who have to bear the huge housing loan caused by some failed policy, I say put your vote to good use.

[bepgof 20]

Asset enhancement is only a term but with many different interpretations. Regardless of one or two or three houses, key interest is if owner of asset able to "taste the fruit".

Presently the price of public housing is "still ok" and "affordable", however, with the price increase rate of 11.1% each year and compare to the median increase of wage of 1.2% pa, is quite alarming.

WP has valid pt of pegging new flat price to median wage.

NSP has valid pt of apply 8 yrs MOP to PR buyers....

Believed PAP ministries have somehow "missout" or "failed to coordinate" on application of vital statistical data collected. Otherwise history of home supply and inflow immigrant rate wouldn't be in such a mismatch from 2005 - 2008.

Edited April 22, 2011 by bepgof

[eiffel76 1]

and talk abt higher property tax!

[everton 0]

and talk abt higher property tax!

yes. while the increase in the value of the property is only on paper the payment of increased property tax is in real dollars. So how does high property prices benefit a person with only one property..... It doesn't. Unless of course you don't plan on living in Singapore forever and decide instead to cash out and live somewhere else.

[forgotten 1]

Residents @ clementi Ave blk 323 Ave 5 affected by the HDB en-bloc program. Many are unhappy about being made to move. The new flats are smaller than the ones they currently live in. A resident we spoke to told us they have already approached Arthur Foong, the incumbent MP, who has turned them away by saying this matter is out of his scope. We the Reform Party say the residents concerns are our top priority, their interests must come FIRST

https://fbcdn-sphotos-a.akamaihd.net/hphotos-ak-snc6/222504_170570602998532_100001367809020_397840_3090563_n.jpg

[forgotten 1]

Emergency residents meeting at West Coast GRC over forced en bloc sale

April 24th, 2011 | Author: Your Correspondent

The Temasek Review (TR) has learnt that an emergency meeting for affected residents of Clementi Avenue 5 (West Coast GRC) has been called today at 1600 hours over the planned forced SERS upgrading of Block 321, 322 and 323.

According to an affected resident, Block 321 – Block 323 has been shceduled for en bloc sale (back to HDB?) under the SERS upgrading scheme and affected residents were not consulted on.

The resident, who identified himself as Mr Tong said that they were merely informed of the planned en bloc and were not asked for their permission or opinion.

Mr Tong furthered that the affected residents were given a choice of “upgrading” to a flat of the same type (ie: 3-room to 3-room) or to a larger unit but the compensation monies given for their existing unit were low compared to the market rate.

“As such, those who choose to say, upgrade from a 3-room flat to a 3-room flat will get roughly $50,000 in cash compensation while those who wants a to upgrade from a 3-room flat to a 4-room or 5-room flat will need to fork out about $450,000 to make up for the differences”, he added.

Other residents this correspondent spoke to have expressed disbelieve at the ridiculous price of the new offered flats and the pathetic offer of about $50,000 for a one-to-one same unit “upgrade” compared to if they were to sell their flat in the open market.

The new3-room flats offered are also smaller in seze compared to the existing unit.

Mdm Tang, another angry resident of Clementi Avenue 5 for 30 years is pissed that the SERS upgrading was shoved down her throat without her permission nor any say in the matter.

Meanwhile, at a coffeeshop nearby, perturbed residents were heard uttering that come this election, they and their familes would vote for any pigs, dogs or cats the opposition party field over the People’s Action Party (PAP).

“These (PAP) government officials are not humans [不是人] and the present government has obviously lost its directions”, said Mdm Tang.

Mdm Tan said: “The government thinks we are old and useless, so easy to “eat” (translated from hokkien “jiat”)”, a sentiment shared by many at the coffeeshop.

It is understood that the affected residents will be holding an emergency meeting at the void deck of Block 322 at 1600 hours today to discuss this and hopefully get the relevant authorities to “listen”.

TR will update this article as and when new information are available.

[gimz63251073 0]

Workers Party suggestion in my opinion is extremely hard to execute:

- pricing at median income. Whose median income? - Median income of applicant, Median income of households in Singapore, Median income of all applicants?? There are endless groups of people and selection of any group opens up a brand new problem and area for debate.

- Also rightfully a house next to Redhill MRT must command a higher price than one at Boon Lay MRT. In this case, do you shift up the pricing or continue to price a Redhill flat at a Jurong's price?

- Assume that all flats follow the same pricing regardless of location, then we have a bigger problem of the whole Singapore going for high level flats at prime locations. Thus, making balloting a nightmare and perhaps citizens would be better off buying lottery.

These are just hypothetical issues which would not surface. No PAP member in his right mind would accept a WP recommendation. Its a matter of pride and "face".

Right now, MBT is the only person in Singapore defending his "affordability" of flats. Im just glad i managed to get mine already!

[bepgof 20]

Can find some leads here:

- http://leongszehian.com/

- http://theonlinecitizen.com/2011/04/hdb-leong-sze-hian-responds-to-mah-bow-tan/

Workers Party suggestion in my opinion is extremely hard to execute:

- pricing at median income. Whose median income? - Median income of applicant, Median income of households in Singapore, Median income of all applicants?? There are endless groups of people and selection of any group opens up a brand new problem and area for debate.

- Also rightfully a house next to Redhill MRT must command a higher price than one at Boon Lay MRT. In this case, do you shift up the pricing or continue to price a Redhill flat at a Jurong's price?

- Assume that all flats follow the same pricing regardless of location, then we have a bigger problem of the whole Singapore going for high level flats at prime locations. Thus, making balloting a nightmare and perhaps citizens would be better off buying lottery.

These are just hypothetical issues which would not surface. No PAP member in his right mind would accept a WP recommendation. Its a matter of pride and "face".

Right now, MBT is the only person in Singapore defending his "affordability" of flats. Im just glad i managed to get mine already!

Edited April 25, 2011 by bepgof

[bepgof 20]

Good show at right time, hard to come by. Pity those kena "forced" to play in the "show". My late father's land was requsited when I was 16 yr-old when I was still blurr blurr.

Emergency residents meeting at West Coast GRC over forced en bloc sale

April 24th, 2011 | Author: Your Correspondent

The Temasek Review (TR) has learnt that an emergency meeting for affected residents of Clementi Avenue 5 (West Coast GRC) has been called today at 1600 hours over the planned forced SERS upgrading of Block 321, 322 and 323.

According to an affected resident, Block 321 – Block 323 has been shceduled for en bloc sale (back to HDB?) under the SERS upgrading scheme and affected residents were not consulted on.

The resident, who identified himself as Mr Tong said that they were merely informed of the planned en bloc and were not asked for their permission or opinion.

Mr Tong furthered that the affected residents were given a choice of “upgrading” to a flat of the same type (ie: 3-room to 3-room) or to a larger unit but the compensation monies given for their existing unit were low compared to the market rate.

“As such, those who choose to say, upgrade from a 3-room flat to a 3-room flat will get roughly $50,000 in cash compensation while those who wants a to upgrade from a 3-room flat to a 4-room or 5-room flat will need to fork out about $450,000 to make up for the differences”, he added.

Other residents this correspondent spoke to have expressed disbelieve at the ridiculous price of the new offered flats and the pathetic offer of about $50,000 for a one-to-one same unit “upgrade” compared to if they were to sell their flat in the open market.

The new3-room flats offered are also smaller in seze compared to the existing unit.

Mdm Tang, another angry resident of Clementi Avenue 5 for 30 years is pissed that the SERS upgrading was shoved down her throat without her permission nor any say in the matter.

Meanwhile, at a coffeeshop nearby, perturbed residents were heard uttering that come this election, they and their familes would vote for any pigs, dogs or cats the opposition party field over the People’s Action Party (PAP).

“These (PAP) government officials are not humans [不是人] and the present government has obviously lost its directions”, said Mdm Tang.

Mdm Tan said: “The government thinks we are old and useless, so easy to “eat” (translated from hokkien “jiat”)”, a sentiment shared by many at the coffeeshop.

It is understood that the affected residents will be holding an emergency meeting at the void deck of Block 322 at 1600 hours today to discuss this and hopefully get the relevant authorities to “listen”.

TR will update this article as and when new information are available.

[ZondaR 0]

Workers Party suggestion in my opinion is extremely hard to execute:

- pricing at median income. Whose median income? - Median income of applicant, Median income of households in Singapore, Median income of all applicants?? There are endless groups of people and selection of any group opens up a brand new problem and area for debate.

- Also rightfully a house next to Redhill MRT must command a higher price than one at Boon Lay MRT. In this case, do you shift up the pricing or continue to price a Redhill flat at a Jurong's price?

- Assume that all flats follow the same pricing regardless of location, then we have a bigger problem of the whole Singapore going for high level flats at prime locations. Thus, making balloting a nightmare and perhaps citizens would be better off buying lottery.

These are just hypothetical issues which would not surface. No PAP member in his right mind would accept a WP recommendation. Its a matter of pride and "face".

Right now, MBT is the only person in Singapore defending his "affordability" of flats. Im just glad i managed to get mine already!

If prices of housing escalates at this rate, in 20 years time our sons and daughters will have to stay in Johor Bahru or Nusajaya! Just like Minister Khaw Boon Wan is asking Singaporeans to go Johor for health care. Ironic isn't it? We have Foreigners staying in prime district and even public housing, while Singaporeans cannot afford to buy public housing.

Even our roads, priority for COE should be given to Singaporeans. I mean you see all these foreigners owning a few cars and our Singaporeans got to squeeze into MRTs. They should have different category of COEs for foreigners.

[HappyHouse88 0]

If prices of housing escalates at this rate, in 20 years time our sons and daughters will have to stay in Johor Bahru or Nusajaya! Just like Minister Khaw Boon Wan is asking Singaporeans to go Johor for health care. Ironic isn't it? We have Foreigners staying in prime district and even public housing, while Singaporeans cannot afford to buy public housing.

Even our roads, priority for COE should be given to Singaporeans. I mean you see all these foreigners owning a few cars and our Singaporeans got to squeeze into MRTs. They should have different category of COEs for foreigners.

Why grumble ? You shld work to get what you want and not depend on the government.

[bepgof 20]

I guess you "eat rice but don't know the price of rice":

Now resale mkt:

- 3rm = $350,000, 4rm = 450,000, 5rm = $550,000

Assume take HDB loan, 90%, 30yr tenure@2.6% interest rate:

Monthly instalments:

3rm = $1,261

4rm = $1,621

5rm = $1,981

CPF now capped at $4,500, total contribution = 15.5+20 = 35.5%, both husband & wife each capped at $4,500.

Each's OA = $855.42. 2 persons will be $1710.84,

Not enough to cover the monthly instalment for a 5 rm ! need to fork out CASH! Not to mention those with lower wage!

11.1% price increase rate is much more > 5% of the CPI rate. Median wage increase = 1.2%!

Why grumble ? You shld work to get what you want and not depend on the government.

Edited April 26, 2011 by bepgof

[gimz63251073 0]

Why grumble ? You shld work to get what you want and not depend on the government.

we would have a real issue in future if housing keeps up the rate of increase.

for example, a 4rm flat is 400k now. Median household income is 5k. Ratio of flat to income is 80 times.

10yrs later.....

flat become 800k. Median household income is 6.5k (30% target increase by Govt). Ratio of flat to income is 123 times.

So if one has to take a 30yr loan to repay the mortgage, imagine what will happen 10yrs later.

[ZondaR 0]

Why grumble ? You shld work to get what you want and not depend on the government.

Depend on government? For what? We are not asking Government for subsidy - just don't sell out our land.Singapore is not for sale.

Personally, I owned 3 private properties (2 of them less than 900sqft) - no choice have to buy in advance for my son and daughter. Call me kiasu. Those who do not, in 20 years time, it won't be affordable anymore. Recently an indonesian friend of mine bought 11 units of a mass market condo. In 5-10 years time, he intends to sell back to us Singaporeans at a much higher price. Better still I know another Malaysian PR colleague who rented out his private property and bought a HDB resale ( I seriously don't know whose name he used in the purchase, maybe mother's). For those Singaporean who are paying their mortgage for the next 30 years, you jolly well know who contributed to it.