Why condo units are shrinking

[minority]

Sigh....govt is playing with fire. Giving unrealistic expectations to the people.
"dont sell ur hdb flat".
People expect all hdb flats to be SERs, never noticing the S part of sers.

Again,off my head, now new hdb is like 5-6x of median annual income.
when talking abt increasing value of hdb, to what value will the multiplier be? 7-8x ?

Looks like everybody want hdb to increase in price.
anybody wang to give indicative figures in 2030, what multiplier of median income will hdb be? Still 5-6x or 7-8x?

I don't think the advice not to sell the HDB is a bad advice. many people donno what to do with the $. look at those who sell out and hoping to buy cheap again? been waiting from 2009 till now. I foresee them continue to wait before giving up.

those who actually know what they are doing sell to down grade ( cash out n retire) , upgrade , or even take the $ to go do a business are still better of than those sell and wait hoping for a crash to enter.

some simply sell spend the $ then regret selling. So I take that advice as fair warning. but if I choose to sell then I better know what I am doing.

[Amber Woods]

The advice by the great man not to sell your HDB flats was probably correct during the era of GCT (overlapped by LKY) where asset enhancement was the key to building our economy and provide a hedge against inflation during the time of high growth high inflation.

Now that we are moving towards a slower and low growth mature economy, that thinking is now not relevant. We cannot have a slower economy yet asset pricing continues to over run wages and economic growth. The economy will run into trouble at some point in time.

Those who can quickly adjust to the new normal will have a head start to accumulate and/or preserve your wealth.

The rich do not just get richer, they know how to adjust faster than the average Joe.

[walkthetiger]

[QUOTE=Amber Woods;477588

Those who can quickly adjust to the new normal will have a head start to accumulate and/or preserve your wealth.

...know how to adjust faster than the average Joe.[/QUOTE]

.....words of wisdom indeed....being able to sense what is happening and foresee a little more of the coming ...

Sentiment is changing....those many words to praise property just don't feel the same now...people receive it differently now....the right words have to appear at right time

[minority]

The advice by the great man not to sell your HDB flats was probably correct during the era of GCT (overlapped by LKY) where asset enhancement was the key to building our economy and provide a hedge against inflation during the time of high growth high inflation.

Now that we are moving towards a slower and low growth mature economy, that thinking is now not relevant. We cannot have a slower economy yet asset pricing continues to over run wages and economic growth. The economy will run into trouble at some point in time.

Those who can quickly adjust to the new normal will have a head start to accumulate and/or preserve your wealth.

The rich do not just get richer, they know how to adjust faster than the average Joe.

frankly I don't see whats the problem of raising assets price. Even if singapore don't the global inflation happens and that will push the inflation forward. The question is the impact to the avg joe. Avg joe buys direct from HDB which is subsidised thats fine. The avg joe would be happy that his/her assets continue to be inflationary hedged.

As for the right subsidy that can be tuned to help with the avg joe or below avg joe to get ahead.

So I don't see whats the problem. The truly rich never cares about HDB. but there are people who started as avg joe or below avg joe owning a HDB and later making it big later. We should not penalise then for getting ahead n doing well. They work for it after all.

[Amber Woods]

Sister Leeds would be the best person to enlighten us in this area given her strong foundation in economics. I do miss her contributions toward this forum.

I follow DPM Tharman's messages very closely and understand the basic economic challenges of managing an economy. Tharman is probably the one politician we should take him seriously. He know his stuffs and is very convincing.

If you have read his past messages, you would understand why the need for the policy change.

Sorry! I am too lazy to provide you with the links.

I don't think the advice not to sell the HDB is a bad advice. many people donno what to do with the $. look at those who sell out and hoping to buy cheap again? been waiting from 2009 till now. I foresee them continue to wait before giving up.

those who actually know what they are doing sell to down grade ( cash out n retire) , upgrade , or even take the $ to go do a business are still better of than those sell and wait hoping for a crash to enter.

some simply sell spend the $ then regret selling. So I take that advice as fair warning. but if I choose to sell then I better know what I am doing.

[minority]

Sister Leeds would be the best person to enlighten us in this area given her strong foundation in economics. I do miss her contributions toward this forum.

I follow DPM Tharman's messages very closely and understand the basic economic challenges of managing an economy. Tharman is probably the one politician we should take him seriously. He know his stuffs and is very convincing.

If you have read his past messages, you would understand why the need for the policy change.

Sorry! I am too lazy to provide you with the links.

yes I do follow what thaman is saying. economy is changing but some fundamental are still the same.

I feel its not possible to cover everyone needs from all angle with the government policies.

and I agree with u the first movers will always be the resourceful but there will some smart ones. But in the same breath the general public are usually the ones that resist change too.

[Amber Woods]

You are right that the general public are usually the ones that resist change hence all these cooling measures are aim at them to "stop" them rather than to make them understand.

The noises that we heard that property prices should be kept high are mostly from the top 20% (multiple property owners) and not the general public. This minority is always much more vocal than the general public and hence very often a distorted view of the situation is presented instead.

The government is now focusing on the silence majority and I think they are getting it right this time round.

yes I do follow what thaman is saying. economy is changing but some fundamental are still the same.

I feel its not possible to cover everyone needs from all angle with the government policies.

and I agree with u the first movers will always be the resourceful but there will some smart ones. But in the same breath the general public are usually the ones that resist change too.

[thomastansb]

There is a big problem. Some people eye red. So they say, make HDB lower. So we can buy low and sell high. Ya, talk without thinking. Your parents not flat owners ah. Anyway, now price dropping every month. Let's see how long can people hold out before complaining. You get what you ask for, so don't complain too much.

frankly I don't see whats the problem of raising assets price. Even if singapore don't the global inflation happens and that will push the inflation forward. The question is the impact to the avg joe. Avg joe buys direct from HDB which is subsidised thats fine. The avg joe would be happy that his/her assets continue to be inflationary hedged.

As for the right subsidy that can be tuned to help with the avg joe or below avg joe to get ahead.

So I don't see whats the problem. The truly rich never cares about HDB. but there are people who started as avg joe or below avg joe owning a HDB and later making it big later. We should not penalise then for getting ahead n doing well. They work for it after all.

[CondoInterested]

Continue letting HDB flat owners buy private property

I DISAGREE with Ms Chan Suan Yen ("Why condo units are shrinking"; Wednesday).

First, she said private developers of smaller condominium units are meeting the demand from buyers who cannot afford the quantum for larger units, because they are holding on to their HDB flats.

If we compare today's per square foot (psf) prices with past figures, we will realise that private developers are shrinking condo units to cap selling prices and to maximise profits.

Shrinking units affect not only existing HDB flat owners wishing to purchase a second property, but also first-time home buyers and investors. We should look into reducing the psf price so that private developers can go back to building larger units at the same price, instead of getting HDB flat owners to raise cash through selling their homes to pay even higher quanta to the developers.

Second, Ms Chan said it is unfair for an HDB flat owner to be allowed to buy private property without disposing of his HDB unit, when private property owners are banned from buying HDB flats.

The subsidy for a new HDB flat is not handed out frivolously and comes with a string attached in the form of the minimum occupation period (MOP) of five years.

If we assume that it takes three years to build a flat, a buyer would not be able to purchase a second property for eight years, after factoring in the MOP. The opportunity cost is indeed high.

Hence, we should not deprive HDB flat owners who have fulfilled the MOP of the opportunity to buy a second property when they are finally able to do so.

If we wish to allow an existing private property owner to buy an HDB flat, then we should subject him to the same MOP, whereby he cannot buy a third property, or sell/rent out his HDB flat during that period. Alternatively, we could
remove the MOP for first-time HDB flat buyers. Only then will it be fair to both parties.

Chiam Tat Ang

[Kelonguni]

Drawback of selling flats to buy bigger private units
PUBLISHED ON ST FORUM ON MAY 9, 2014 12:28 AM 0 5 0 0


IT HAS been decades since the HDB was set up with the mission of providing affordable homes for Singaporeans ("Why condo units are shrinking" by Ms Chan Suan Yen; Wednesday).

Since then, we have gone from Third World to First in terms of lifestyle and wealth.

Many HDB residents have become rich enough to upgrade to private property. Others choose to invest in small private properties to rent out for passive income.

It is unwise to suggest that they be made to sell their flats so they can purchase bigger private apartments. If their circumstances change, they would be in big trouble. Buying an HDB flat then would be difficult and they may even be left without a roof over their heads.

It seems the only avenue of investment most of us know of is purchasing property for renting out. There is either a lack of alternative forms of investment here, or a lack of knowledge of these options.

Foreigners working in Singapore and their families create demand for smaller and cheaper apartments. Singaporeans are wise to capitalise on this demand.

Frederick Ho

[oops]

Summary

We are hopeful that HDB flat dwellers looking to upgrade to newer condominiums will have more bargaining room when negotiating their purchase terms with potential sellers on price terms, as they are relatively newer developments. However, we believe that financing costs are expected to head higher as interest rates look to appreciate. Furthermore, as unemployment rates among Professionals, Managers, Engineers, and Technicians (PMETs) have recently started to rise up, middle class households will be most impacted as budgets get tightened, and housing affordability levels might fall, thus limiting any upgrading plans.