Don't put the blame on PRs: Khaw

[PN]

Don't put the blame on PRs: Khaw

Property Guru – 22 hours ago

Rising resale HDB flat prices should not be blamed on permanent residents (PRs), but on local private property owners - the buyers who pull up the stakes for the cash premium on flats, said Khaw Boon Wan, Minister for National Development.

Mr Khaw's statement was made in response to a query raised by Zaqy Mohamad, Member of Parliament for Choa Chu Kang GRC, as to whether the Housing Board would limit the sale of resale three-room and smaller flats to just lower-income Singaporeans.

Mr Zaqy argued that PRs are generally perceived as contributing to the rising prices of resale flats and the increasing amounts of cash premiums paid to sellers, known as the cash-over-valuation (COV).

According to Daniel Tan, a real estate agent from C&H Properties, sellers of four- to five-room resale units in Woodlands, Bedok and Ang Mo Kio could command COVs of between S$50,000 and S$80,000 in August last year.
When HDB raised the income ceiling for new flats and housing subsidies, Tan noted that these sellers lowered their expectations to under S$50,000.
By the third quarter of last year, median COVs ranged from S$27,900 to S$34,000.

"The data (is) quite distinct," noted Mr Khaw. "Typically, the PRs pay the lower COVs... among the groups, the higher COVs are often by private property owners or former private property owners... especially the enbloc owners or residents, probably with a lot of cash and still need a roof... they are the ones who bid up the COV."

Hence, he deemed that it is unfair to blame the higher resale prices on a particular group.

Affirming that home prices have shot up within the last two to three years, Mr Khaw asked for the public's patience, as he has been working for the market to "stabilise in due course". Related Stories:HDB launches 3923 new BTO flats91% of HDB flats not resold seven years onForeigner runs cheap hotel from new HDB flat

[august]

why he blame local pte pty owners? already cannot touch hdb what...

[latour]

They trying to say ppl very rich therefore make COV and valuation of HDB resale very high. Another way of indirectly saying they are not happy with - the pay cut...

[blackjack21trader]

.........................

[ysyap]

why he blame local pte pty owners? already cannot touch hdb what...He was probably talking about the past when pte property owners can still buy resale HDB flats but must stay in HDB. Now its a totally different ballgame altogether. :(

[Regulators]

There are more than 1 million prs in singapore who can only buy resale hdb or private, if don't blame them, blame who? I think it is the stupid ethnic quota system in buying hdb flats that cause cov to shoot up. Some areas that pr want to buy have limited units due to quota so they have no choice but to pay high cov for the units they want.

[ysyap]

There are more than 1 million prs in singapore who can only buy resale hdb or private, if don't blame them, blame who? I think it is the stupid ethnic quota system in buying hdb flats that cause cov to shoot up. Some areas that pr want to buy have limited units due to quota so they have no choice but to pay high cov for the units they want.Don't blame PR, don't blame govt, don't blame anyone... just blame yourself...

When people don't have money to upgrade or buy bigger units, they will try not to have more kids. And then govt say Singaporeans are not unwilling to have more children. See... just blame yourself...

Govt will also say that the ethnic quota system is there for a good reason so they are perceived to be blameless on that. Well I must add that despite their efforts to ensure racial diversity in the neighborhood, there are still specific locations in the country with a majority of a certain race. Why not address this targeted locations? Like what you mentioned, this might just solve the quota system jacking up the COV. Hmmm...

[teddybear]

Why not show the raw data on PRs purchases in each housing estate and also the COV (average & medium) vs total number for each type of room units? that will be more useful & convincing than a simple statement since citizens are now all cynical and don't trust just empty words & statements anymore? :beats-me-man:



Don't put the blame on PRs: Khaw

Property Guru – 22 hours ago

Rising resale HDB flat prices should not be blamed on permanent residents (PRs), but on local private property owners - the buyers who pull up the stakes for the cash premium on flats, said Khaw Boon Wan, Minister for National Development.

Mr Khaw's statement was made in response to a query raised by Zaqy Mohamad, Member of Parliament for Choa Chu Kang GRC, as to whether the Housing Board would limit the sale of resale three-room and smaller flats to just lower-income Singaporeans.

Mr Zaqy argued that PRs are generally perceived as contributing to the rising prices of resale flats and the increasing amounts of cash premiums paid to sellers, known as the cash-over-valuation (COV).

According to Daniel Tan, a real estate agent from C&H Properties, sellers of four- to five-room resale units in Woodlands, Bedok and Ang Mo Kio could command COVs of between S$50,000 and S$80,000 in August last year.
When HDB raised the income ceiling for new flats and housing subsidies, Tan noted that these sellers lowered their expectations to under S$50,000.
By the third quarter of last year, median COVs ranged from S$27,900 to S$34,000.

"The data (is) quite distinct," noted Mr Khaw. "Typically, the PRs pay the lower COVs... among the groups, the higher COVs are often by private property owners or former private property owners... especially the enbloc owners or residents, probably with a lot of cash and still need a roof... they are the ones who bid up the COV."

Hence, he deemed that it is unfair to blame the higher resale prices on a particular group.

Affirming that home prices have shot up within the last two to three years, Mr Khaw asked for the public's patience, as he has been working for the market to "stabilise in due course". Related Stories:HDB launches 3923 new BTO flats91% of HDB flats not resold seven years onForeigner runs cheap hotel from new HDB flat

[hyenergix]

KBW could have mis-interpreted the HDB data. He prob din look at foreigner couples converting to one new citizen + one PR. This is a common practice among foreigners buying HDBs and it masked the foreigners number.

Anyway I'm not blaming the PRs. I'm blaming HDB for not building enough HDBs. HDB senior management must be accountable for the mistake over so many years - first overbuilt 10 years+ ago, then underbuilt 5 years+ ago, and now overbuilding again.

[teddybear]

Below report very strange. I though private property owners cannot buy HDB flats (even resale)? Then how he can gather data on private property owners buying HDB? :confused:

Did he split between citizens and PRs private property owners? Is he talking about "residence" instead of "ownership" (because those so called private property "owners" are actually "residents" living in parents' private properties?


Title : MND releases median COV paid in Q4 2011 By :
Date : 18 January 2012 1223 hrs (SST) URL : http://www.channelnewsasia.com/stories/singaporelocalnews/view/1177507/1/.html
SINGAPORE: National Development Minister Khaw Boon Wan has released data on the extent of Cash Over Valuation (COV) paid by different buyer groups.

Writing in his blog, under the heading "Who Bids High?", Mr Khaw revealed that Private Property Owners paid the highest median COV of S$45,000 in the last quarter of 2011.

The next highest was S$34,000 in median COV paid by second-timers.

First-timers paid S$33,000, Permanent Residents S$32,000, while Singles paid the lowest median COV of S$31,000.

Mr Khaw said his ministry monitors HDB resale prices and publish them for information of potential buyers and sellers.

Such transparency, he said, helps make the market run better.

The COV issue was raised in Parliament on January 16.

Mr Khaw said he decided to share the breakdown by the different buyer groups so as to give a complete picture.

- CNA/fa

[evergreen]

The different groups of people are not mutually exclusive. E.g. first timers can be PRs. First timers can also be Singaporeans.

Depending on how you group the people, you'll get different results.

There should be a breakdown by mutually exclusive groups, e.g. downgraders-PR-first timers, downgraders-PR-non first timers, downgraders-Singaporeans-first timer, downgraders-Singaporeans-non first timer,etc

Otherwise it's just lies, damn-d lies, and statistics.

[ysyap]

Don't we all know that statisticians are the experts in portraying figures and numbers to cater to their cause? They can easily manipulate the numbers so that it make them look right! From the term 'average' asking price to valuation of houses, everything can be tweaked to favor any one party! :cool:

[richwang]

I have to confess I did bid up the price when I was a PR. I bought my resale HDB 10 years ago next to MRT station. The seller had other offers. My wife and myself just liked the unit so much (after we had viewed 20+ other units), I guess I end up paying S$10K more than the "market".

There is a general mistake saying for every seller, there is a buyer. So it is always "fair" market. That is wrong.

The truth is there is always a BID and ASK spread. When supply is low, the buyer (PR or not) will have to bid up the price to close the deal.

Thanks,
Richard

[ikan bilis]

(BizTimes) January 18, 2012, 11.58 am (Singapore time)
http://www.businesstimes.com.sg/mnt/static/image/ax/c.gif
Private property owners and second-timers pay more COVs: MND

By CARINE LEE

Minister for National Development, Khaw Boon Wan, on Wednesday revealed that private property owners and second timers paid more for resale flat median cost-over-valuation (COV) in the fourth quarter of 2011.




Private property owners paid $45,000.
Second-timers paid $34,000.
First-timers paid $33,000.
Permanent residents paid $32,000.
Singles paid $31,000.



~~~~~~~~~~~~~~~~~~~
i think "private property owners" mean those that downgraded to hdb...
ofcoz lah.... the seller of my condo threw 60K for their EA at JW. i also got another tenant threw 80K for their EA at CCK after sold TheJade...

:scared-2:

[marktkt22]

There no limit to stupidity.
This big loopholes have been exploit in many areas...
Such a glaring loopholes... But who to blame ?
The one that let in the wolves or the one that craft the policy



KBW could have mis-interpreted the HDB data. He prob din look at foreigner couples converting to one new citizen + one PR. This is a common practice among foreigners buying HDBs and it masked the foreigners number.

Anyway I'm not blaming the PRs. I'm blaming HDB for not building enough HDBs. HDB senior management must be accountable for the mistake over so many years - first overbuilt 10 years+ ago, then underbuilt 5 years+ ago, and now overbuilding again.

[Allthepies]

the data is meaningless without showing the number of resale HDB purchased by private property owners. the median may be high from private property owners but what if they make up only 1% of the resale transaction? :D

i guess KBW trying to cook up some reasons to support turning on the flood gate again :D

[blackjack21trader]

I have to confess I did bid up the price when I was a PR. I bought my resale HDB 10 years ago next to MRT station. The seller had other offers. My wife and myself just liked the unit so much (after we had viewed 20+ other units), I guess I end up paying S$10K more than the "market".

There is a general mistake saying for every seller, there is a buyer. So it is always "fair" market. That is wrong.

The truth is there is always a BID and ASK spread. When supply is low, the buyer (PR or not) will have to bid up the price to close the deal.

Thanks,
Richard


what u say is very true. in the usa stock markets, a market maker is used under such condition like u mentioned to maintain a fair market practice . that is, the market maker has to take any buy or sell order at any price and close any bidding spread. guess u are as good as the fed economist to notice that.

[richwang]

I guess the HDB Valuation method is also part of the problems.
For HDB seller, he only cares about the total selling price.
But for HDB buyer, he cares more about the COV than the total price.
So sellers and buyers are talking DIFFERENT languages.

Selling Price = Valuation + COV

So in a up market, valuation keeps adjusting upwards according the recent transactions. People will still pay a premium COV to close the deal. That pushes the selling price even higher. (Of course, in a down market, even COV is negative, there is no bidder).

We should DROP valuation and control cash payment to say 10% of total price. In this way, the cash payment for buyer will NOT fluctuate like crazy.
Buyers and sellers will use the SAME language to negotiate.

Thanks,
Richard

[teddybear]

Scarely most of the so-called Private property owners who buy resale HDB flats are PRs? (since they didn't breakdown between PRs and citizens?) :scared-2:


the data is meaningless without showing the number of resale HDB purchased by private property owners. the median may be high from private property owners but what if they make up only 1% of the resale transaction? :D

i guess KBW trying to cook up some reasons to support turning on the flood gate again :D

[richwang]

If they don't allow PRs to buy re-sale HDB, re-sale HDB price will crash.
New HDB price will also need to crash.

Someone will loss his job quicker than MBT (no need to wait for GE2016).

Thanks,
Richard

[fclim]

They are not blaming the PRs per se. They are blaming the sudden HUGE influx of PRs that drives up the demand and hence the COVs. Who brought them in?

[Rezo]

Don't blame PRs!
Don't blame Gov!
Don't blame yourself!
Blame your employer!Why my increment so low compare to property price!

[teddybear]

That is really strange. Citizens are complaining super high resale HDB flats due to PRs, and they want to maintain HDB resale flats prices high high by allowing so many PRs to buy and many rent out for investment?

Don't think there are many citizens who complain private property prices super high (since at most 10% can afford) but they come out with CM5 to penalize foreigners & PRs? Suggest they should give CM5 to HDB flats to cool it so that more citizens (>80% of them) will benefit instead! :p


If they don't allow PRs to buy re-sale HDB, re-sale HDB price will crash.
New HDB price will also need to crash.

Someone will loss his job quicker than MBT (no need to wait for GE2016).

Thanks,
Richard

[ysyap]

That is really strange. Citizens are complaining super high resale HDB flats due to PRs, and they want to maintain HDB resale flats prices high high by allowing so many PRs to buy and many rent out for investment?

Don't think there are many citizens who complain private property prices super high (since at most 10% can afford) but they come out with CM5 to penalize foreigners & PRs? Suggest they should give CM5 to HDB flats to cool it so that more citizens (>80% of them) will benefit instead! :pThis point has been discussed before. Tackling housing issues through 80% of the population will definitely be more effective than pushing down just 10% or 15% of the population. However, bringing down HDB prices will result in the following.

1. A severe loss of revenues. not just through asking price but also stamp duty fee. Heard that govt collected some $9 billion dollars from stamp duty alone over the last decade or so... wow. Speak about wealth accumulation.
2. Demands for HDB flats will rise, making the govt's effort to build more BTO look frail and pathetic. Poor image for govt.
3. ECs and PCs land parcel sales will be lower coz prices have fallen sharply so it is another loss of revenue.

[richwang]

HDB Board is already lossing S$1B (due to cheif valuer uses Raffles Place as the benchmark for HDB land prices).

A big drop of HDB prices will mean less money going to Reserves (The Dividends of Reserves come back to goverment as income for the current term. That's why Teamasek linked companies all paying good dividends.)

Thanks,
Richard