Will HDB prices will fall in time to come?

[MyPropertyAgent]

A MUST READ for people staying in HDB, this is just my opinion & ill leave it to you to make your own radical judgement.

In todays current sellers market, a lot of HDB owners/sellers are asking for ridiculous selling price etc 80k COV. A lot of them are so caught up in this frenzy that they fail to see a larger picture.

Number 1.) I expect HDB prices to drop in the near future (2.5 years from now) before next elections start because there is no way PAP can win with the current HDB transaction prices. The Garmen will have to depend on the majority of the population 82.5% to win their votes. HDB is a necessity like the bread & butter for the majority of the population & it has to be affordable.

Number 2.) Also, the prices of HDB have already appreciated by 90.5% from 101.8 property price index (PPI) to 194 in the last 6 years. Source: HDB. There is little room for capital appreciation for hdb prices over the next 3 years.

The ideal plan : Sell your HDB and upgrade to private, OR better still KEEP your HDB & invest in a private re-sale then rent out the HDB for good cashflow. It is sad to know that a lot of people put their money in banks that give pathetic interest rate, so much so that the value of their money SHRINKS over time due to inflation.

Disclaimer: This is just my opinion & should anyone follow this advice & lose money, dont blame me AHHA. To be honest is only make how much $$$ which depends on the property you buy. BTW I have left out factors such as population growth, current low interest rates & QE3 impact which will be in my next post sometime soon.

Will appreciate your comments

Cheers!
Travis Ye[/COLOR]

[indomie]

90% singaporeans still live in hdb. If prices drop they are not going to be happy with the gov. Most hdb still affordable, if u exclude those in mature townships. The price difference between a nearby hdb and pc is still huge. Hdb is what keeping pc from falling. In fact hdb is the price support for pc.

[lajia]

Precisely what I have mentioned before, if we conclude that currently there is 80%+ of the population staying in HDB, will this ppl be happy with the govt if price fall instead? If HDB price fall, private will also fall...

90% singaporeans still live in hdb. If prices drop they are not going to be happy with the gov. Most hdb still affordable, if u exclude those in mature townships. The price difference between a nearby hdb and pc is still huge. Hdb is what keeping pc from falling. In fact hdb is the price support for pc.

[Secretariat]

A MUST READ for people staying in HDB, this is just my opinion & ill leave it to you to make your own radical judgement.

In todays current sellers market, a lot of HDB owners/sellers are asking for ridiculous selling price etc 80k COV. A lot of them are so caught up in this frenzy that they fail to see a larger picture.

Number 1.) I expect HDB prices to drop in the near future (2.5 years from now) before next elections start because there is no way PAP can win with the current HDB transaction prices. The Garmen will have to depend on the majority of the population 82.5% to win their votes. HDB is a necessity like the bread & butter for the majority of the population & it has to be affordable.

Number 2.) Also, the prices of HDB have already appreciated by 90.5% from 101.8 property price index (PPI) to 194 in the last 6 years. Source: HDB. There is little room for capital appreciation for hdb prices over the next 3 years.

The ideal plan : Sell your HDB and upgrade to private, OR better still KEEP your HDB & invest in a private re-sale then rent out the HDB for good cashflow. It is sad to know that a lot of people put their money in banks that give pathetic interest rate, so much so that the value of their money SHRINKS over time due to inflation.

Disclaimer: This is just my opinion & should anyone follow this advice & lose money, dont blame me AHHA. To be honest is only make how much $$$ which depends on the property you buy. BTW I have left out factors such as population growth, current low interest rates & QE3 impact which will be in my next post sometime soon.

Will appreciate your comments

Cheers!
Travis Ye[/COLOR]

Funny that the better Ideal Plan is to keep the HDB flat for rental income and also to buy private...in anticipation of a price fall.

To illustrate, susposingly for a 3-rooms flat rental at $2000 pm, the rental collected over 4 years goes to drain should the price of flat fall by $100,000?

The Ideal Plan should be an exit, securing the $100,000 now.

[Secretariat]

If my hypothesis is sound, then the pricing of private condo or flat (subject to reasonable lease span if not FH) will actually be cushioned from any correction in the HDB sector.

[carbuncle]

Precisely what I have mentioned before, if we conclude that currently there is 80%+ of the population staying in HDB, will this ppl be happy with the govt if price fall instead? If HDB price fall, private will also fall...

precisely. what a load of bull from the TS. warped thinking. if he really is a PropertyAgent I seriously doubt he or she can go very far.

[kane]

Despite the rise in value of the hdbs, the gulf between a hdb and the condos adjacent hdb are at even higher levels. How else can they bridge this widenig gulf other than asking for higher COV. If they don't get, well it's just down to luck that the time is not ripe for them to upgrade.

The other question is if they choose to buy a bigger resale flat next who is inclined to ask for COV, if they sold theirs on the cheap, how are they to afford the next move as well.

[kane]

precisely. what a load of bull from the TS. warped thinking. if he really is a PropertyAgent I seriously doubt he or she can go very far.

If this guy is a property agent, he probably needs to create some fear to stimulate sellers to lower expectations so that there will be more resale volume for him to handle perhaps.

[buttercarp]

A MUST READ for people staying in HDB, this is just my opinion & ill leave it to you to make your own radical judgement.

In todays current sellers market, a lot of HDB owners/sellers are asking for ridiculous selling price etc 80k COV. A lot of them are so caught up in this frenzy that they fail to see a larger picture.

Number 1.) I expect HDB prices to drop in the near future (2.5 years from now) before next elections start because there is no way PAP can win with the current HDB transaction prices. The Garmen will have to depend on the majority of the population 82.5% to win their votes. HDB is a necessity like the bread & butter for the majority of the population & it has to be affordable.

I think people are happy that the cost of their homes have appreciated.
As long as there are cheaper options in other estates, there is always an option to cash out on your unit should you need the cash.

Number 2

.) Also, the prices of HDB have already appreciated by 90.5% from 101.8 property price index (PPI) to 194 in the last 6 years. Source: HDB. There is little room for capital appreciation for hdb prices over the next 3 years.

Depends on supply and demand.

The ideal plan : Sell your HDB and upgrade to private, OR better still KEEP your HDB & invest in a private re-sale then rent out the HDB for good cashflow. It is sad to know that a lot of people put their money in banks that give pathetic interest rate, so much so that the value of their money SHRINKS over time due to inflation.

Agree with you to keep HDB and rent it out provided you have money to buy private.
If no money and want to upgrade to private, just sell the HDB. What is the point of struggling so hard to keep HDB and stay in condo but have to work so hard and no time to enjoy the facility.

[Secretariat]

Turnover is a very important pricing consolidation process. No turnover means no market; the market is dead (I think that KBW touched on this yesterday?).

To illustrate, say a block of 3-room flats, 100 units. In 2009 or so, units transacted at $200,000. Then no transaction until recently when one unit successfully sold at $380,000.

The healthier pricing consolidation process will then be for more & more of the remaining 99 units transacted at the level of $380,000. Over time, the baseline price paid of the 100 units here moves closer to $380,000.

So in the event of an overall market correction setting in, the owners of this block will tend to hold on, because most of them paid at the $380,000 level. Otherwise, the other 99 unit-owners will fall over each other, undercutting, to sell because each of them wants to realize the $180,000 equity.

So property agents play a key role in this price consolidation process. They are the equivalent of Market Maker in the equity markets.

[indomie]

Never fearful of hdb price going down. Should you decided to cash out, buy pc right away. Don't delay. Especially if it was your only roof over your head. Don't speculate and renting while waiting for the price to crash. This is such a basic singapore property 101.

[radha08]

fantastic plan exactly my thinking....but because of new cm and i am late 40s...now i bang......got to stay back in my hdb.......if i want to buy 1 mil property with 80%dp...monthly $4.5k mortgage...so assume i rent out my hdb at $2.5k still got come out $2k pm cash...if interest go up die pain pain....alternatively if i take 30year loan got to come out 40% dp...i.e $400k...that also stretching it for me...so what to do...i also dunno........sell hdb damm sayang now i just do full reno...family all settling in...so what to do.....at moment sit down hdb coffeeshop and drink teh-c siew tai......at night sit down same coffeeshop give that man a tiger...

[Laguna]

If this guy is a property agent, he probably needs to create some fear to stimulate sellers to lower expectations so that there will be more resale volume for him to handle perhaps.

Personally, I don't think this is correct as all agents dealing with buyers and sellers as well.

[Secretariat]

fantastic plan exactly my thinking....but because of new cm and i am late 40s...now i bang......got to stay back in my hdb.......if i want to buy 1 mil property with 80%dp...monthly $4.5k mortgage...so assume i rent out my hdb at $2.5k still got come out $2k pm cash...if interest go up die pain pain....alternatively if i take 30year loan got to come out 40% dp...i.e $400k...that also stretching it for me...so what to do...i also dunno........sell hdb damm sayang now i just do full reno...family all settling in...so what to do.....at moment sit down hdb coffeeshop and drink teh-c siew tai......at night sit down same coffeeshop give that man a tiger...

Not really shut out by the CM, but the MOP...

Anyway,

[chestnut]

fantastic plan exactly my thinking....but because of new cm and i am late 40s...now i bang......got to stay back in my hdb.......if i want to buy 1 mil property with 80%dp...monthly $4.5k mortgage...so assume i rent out my hdb at $2.5k still got come out $2k pm cash...if interest go up die pain pain....alternatively if i take 30year loan got to come out 40% dp...i.e $400k...that also stretching it for me...so what to do...i also dunno........sell hdb damm sayang now i just do full reno...family all settling in...so what to do.....at moment sit down hdb coffeeshop and drink teh-c siew tai......at night sit down same coffeeshop give that man a tiger...

Bro, you still working right? Is your wife working? Any CPF? The key is when you gonna retire and also the fear of a retrenchment. IF you continue to work till 65, then you will have 2 houses fully paid at 65. I understand your concerns. Once a person reaches >40, become kia. What to do? You need to sit down to do your sums on a worst case scenario. Another fear you have is what if market tank. So many possibilities thrown to you. What if interest rate shoot up. What if kids need to go overseas to study???

If you cannot handle all the above, I think you will be happier in your hdb and at least we can give that man a tiger.

[ysyap]

fantastic plan exactly my thinking....but because of new cm and i am late 40s...now i bang......got to stay back in my hdb.......if i want to buy 1 mil property with 80%dp...monthly $4.5k mortgage...so assume i rent out my hdb at $2.5k still got come out $2k pm cash...if interest go up die pain pain....alternatively if i take 30year loan got to come out 40% dp...i.e $400k...that also stretching it for me...so what to do...i also dunno........sell hdb damm sayang now i just do full reno...family all settling in...so what to do.....at moment sit down hdb coffeeshop and drink teh-c siew tai......at night sit down same coffeeshop give that man a tiger...

Get a full term loan (whatever your age allows) and pay 40% dp lor. Choose a property below $1mil so downpayment can be lower. Need to do your sums properly. Stay in a decent condo at Woodland still can be happy...

[Pikachu1245]

If this guy is a property agent, he probably needs to create some fear to stimulate sellers to lower expectations so that there will be more resale volume for him to handle perhaps.

Wah........There are agent among us (secret agent -property agent)?
How you 'fish'them out ar?

[kane]

Personally, I don't think this is correct as all agents dealing with buyers and sellers as well.

not all take a balanced view, today they are selling, say bad things, tomorrow they are buying, say good things.

[Secretariat]

Bro, you still working right? Is your wife working? Any CPF? The key is when you gonna retire and also the fear of a retrenchment. IF you continue to work till 65, then you will have 2 houses fully paid at 65. I understand your concerns. Once a person reaches >40, become kia. What to do? You need to sit down to do your sums on a worst case scenario. Another fear you have is what if market tank. So many possibilities thrown to you. What if interest rate shoot up. What if kids need to go overseas to study???

If you cannot handle all the above, I think you will be happier in your hdb and at least we can give that man a tiger.

This is what I think can be explored, as in a case study? But I don't know all the intricacies of HDB financing, so others can comment.

Baseline Assumption

3-rooms HDB flat, fully paid using CPF, valued $400,000 (example, for ease of illustration). Cash position $300,000.

Exploration

Sell the existing HDB flat, and buy another 3-rooms HDB flat of newer lease. Valued $400,000 +/-. Title for husband and wife, but mortgage loan using wife only. DP 20% using cash, $80,000. Finance installment using cash.

Buy a PC, $1,200,000, completion in 5 years, title for husband and wife, but mortgage loan using husband only. DP 20% using cash, $240,000. Finance installment using CPF.

At the end of MOP for HDB flat, which coincides with condo completion, sell HDB flat. Pay down condo mortage using all the OA amount in CPF.

Feasible?

[Laguna]

This is what I think can be explored, as in a case study? But I don't know all the intricacies of HDB financing, so others can comment.

Baseline Assumption

3-rooms HDB flat, fully paid using CPF, valued $400,000 (example, for ease of illustration). Cash position $300,000.

Exploration

Sell the existing HDB flat, and buy another 3-rooms HDB flat of newer lease. Valued $400,000 +/-. Title for husband and wife, but mortgage loan using wife only. DP 20% using cash, $80,000. Finance installment using cash.

Buy a PC, $1,200,000, completion in 5 years, title for husband and wife, but mortgage loan using husband only. DP 20% using cash, $240,000. Finance installment using CPF.

At the end of MOP for HDB flat, which coincides with condo completion, sell HDB flat. Pay down condo mortage using all the OA amount in CPF.

Feasible?

this definitely cannot be done
after buying HDB resale, MOP first and then buy PC
if u buy PC first, then bye bye to HDB

[Laguna]

not all take a balanced view, today they are selling, say bad things, tomorrow they are buying, say good things.

There are many types of people around us. Your friend can talk very good in front of u and talk very bad behind you as well.

Agents also need to make a living lah!
final call is still with the buyer and seller.

[buttercarp]

this definitely cannot be done
after buying HDB resale, MOP first and then buy PC
if u buy PC first, then bye bye to HDB

@Secretariat
In addition we discussed before in anothe thread and bro fclim pointed out the following :

Financial institutions are required to conduct checks with HDB and with one or more credit bureaus on whether the buyer has an outstanding housing loan at the time of applying for a housing loan for the new property purchase. For joint buyers, if either buyer has an outstanding housing loan, the joint buyers will be considered as having an outstanding housing loan.

http://www.iras.gov.sg/irasHome/page03a_ektid10700.aspx

[kane]

I'm sure there are "friends" like that.

Taking a balanced view is actually the best way to build long term relationships with the clients who are actively buying and selling cos it's very easy for the owner to see through the agent's true colours if they flip flop between why the market is bad or good in short spaces of time. My agents are smart enough not to try that stunt on me because they know I spend more time analysing the macro and micro environment than they do due to my work. So they explain it as it is and I greatly appreciate their candor for it.

[Secretariat]

@Secretariat
In addition we discussed before in anothe thread and bro fclim pointed out the following :

Financial institutions are required to conduct checks with HDB and with one or more credit bureaus on whether the buyer has an outstanding housing loan at the time of applying for a housing loan for the new property purchase. For joint buyers, if either buyer has an outstanding housing loan, the joint buyers will be considered as having an outstanding housing loan.

http://www.iras.gov.sg/irasHome/page03a_ektid10700.aspx

OK, let's clarify this one again. To illustrate:

Private Property

A property already purchased by a couple (A and B) with financing. So, they are joint-owners of this property as joint-buyers.

A & B can be husband-wife, boy friend-girl friend, brothers, friends, etc. Does not matter right?

Now, A wants to buy a another property alone. Can right?

I was saying in that thread you mentioned, that A can buy this other property at 80% LTV.

Agree?

We address this part first then go on to the HDB scenario.

[carbuncle]

OK, let's clarify this one again. To illustrate:

Private Property

A property already purchased by a couple (A and B) with financing. So, they are joint-owners of this property as joint-buyers.

A & B can be husband-wife, boy friend-girl friend, brothers, friends, etc. Does not matter right?

Now, A wants to buy a another property alone. Can right?

I was saying in that thread you mentioned, that A can buy this other property at 80% LTV.

Agree?

We address this part first then go on to the HDB scenario.

A wanna buy another property, yes can. At 80% LTV, simple answer is No, if A name is also in the private property mortgage.

I have been in that situation.

[Secretariat]

A wanna buy another property, yes can. At 80% LTV, simple answer is No, if A name is also in the private property mortgage.

I have been in that situation.

If there is substantial equity in the first loan, and A ask the bank to refinance it?

[buttercarp]

A wanna buy another property, yes can. At 80% LTV, simple answer is No, if A name is also in the private property mortgage.

I have been in that situation.

Yes carbuncle is right.

As long as the A's name is in the title deed, even if the loan does not have A's name, A is still considered to have the outstanding loan.

The only way for A to get 80% LTV is to remove his name from the title deed and provided the other terms and condition set by MAS are met.

[Secretariat]

Yes carbuncle is right.

As long as the A's name is in the title deed, even if the loan does not have A's name, A is still considered to have the outstanding loan.

The only way for A to get 80% LTV is to remove his name from the title deed and provided the other terms and condition set by MAS are met.

OK, any other creative ways?

It is good to be updated with what the market is doing or can do.

[carbuncle]

Yes carbuncle is right.

As long as the A's name is in the title deed, even if the loan does not have A's name, A is still considered to have the outstanding loan.

The only way for A to get 80% LTV is to remove his name from the title deed and provided the other terms and condition set by MAS are met.

Not true, this. perhaps only for hdb loans, which I have no experience with.

For one private unit, I was the sole title deed holder. Someone else was the sole borrower. Not even blood relationship. The person got 90% loan even though I have a few active loans of my own (albeit with other banks) at that time.

NOTE private property only

[carbuncle]

Not true, this. perhaps only for hdb loans, which I have no experience with.

For one private unit, I was the sole title deed holder. Someone else was the sole borrower. Not even blood relationship. The person got 90% loan even though I have a few active loans of my own (albeit with other banks) at that time.

NOTE private property only

BIG Caveat: This was in 2007. Ha Ha