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lion investor,
one question to ponder is how gahment doing the valuation?
I was reading articles sometimes ago saying the valuation was done by independent valuer considering the recent transaction price (=valuation + COV).
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In the fourth quarter of last year, the median valuation was $389k, the median COV was $41k and the median price was $430k.
Barely 6 months later, the valuation is $420k, the COV is $30k and the price is $450k. [\quote]
based on the above given data, it seems like a positive feedback loop for the median price to continue go up and up. Unless the seller is willing to sell at below valuation with no COV, there seems like HDB price hardly will come down.
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Hi Alice,
Yes, you are right. If COV continues to maintain even after prices are revalued upwards, the prices will keep on going up.
But one fine day, buyers will run out of COV to pay.
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As of the moment, it appears that there isn’t, which is why the gahmen is developing smaller flats.
I do wonder though… how much responsibilities the individual and families need to bear for housing before turning to the gahmen and expect a low cost housing option.
I do some volunteer work and have come across cases where an elderly person is in need of $ and shelter. Upon questioning, empirically, about 2/3 of them have children who aren’t making that much and are living in small flats so they ‘cannot’ house their own parents.
My mom was 1 of 8 kids, all 8 kids had to share 1 room. People back then were more frugal and lived more simple lives, now it seems that their own room, computer, ipod, handphone are a birth right and taking care of the poor and the elderly is the business of the gahmen.
ReplyA new 2-room BTO flat in Seng Kang now costs about $90k. Five years ago, a 4-room could be bought for $130k.
Things are getting smaller, and more expensive.
ReplySeriously man. I was looking at flats from Pinnacle @ Duxton. It costs about $450k for a big 5 room 3 years ago now it’s 550k+! But taking a longer view of prices, its definitely cyclical. In a couple years from now, I suspect the price index graph of 2006 – 2011 will look similar to 1996 – 2001.
It seems that private property is taking a bit slow down, IMO, it will be a matter of time before hdb follows suit. Waiting for a couple years for prices to settle down before we buy a flat.
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If the prediction of some property analysts (from yesterday’s newspaper) that prices might hit $700k comes true, then of course $550k would be a steal!
ReplyI do agree the objective of the article has not been accomplished.
HDB prices have gone up, even with direct purchase from Gahmen. But since the over construction of the late 90s, I think the Gahmen is operating on a more needs based model (BTO) and as a taxpayer, I think the HDB is being prudent.
As a HDB seeker (1st time) I am nonetheless irritated that new flats costs more. (A few years ago, a EA in Jurong was ~$270k, now, the same EA is ~$330k, or 22% over ~2 years only). For better or worse, the HDB prices are still varying with the market, albeit less volatile. However, I do understand that HDB cannot operate on a myopic time scale and have to think long term.
I’m grateful that at least in Singapore there is the option to BTO or Design Built and Buy available for the masses. In other countries, the gahmen let you live in the slum or on the streets.
ReplyHi Danny,
The question is, do we have enough affordable housing to cater for those people earning 2k or less a month?
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pls do not compare with “other countries”.which countries are you refering to?cambodia/zambia?take a look at australia..i mean anywhere in australia/new zealand/canada.for $250 000, one could get a landed house with land bigger than any executive apartment.
the income divide is getting massive in singapore and the moderately rich are getting a little too greedy and forgetting about needs and emphasizing on wants.
if this model does not change, singapore will be one sad place to live in.already it is…so negative wherever you go : in a cab,in a coffee shop…everyone is complaining.not good for an upbringing for a child.
Why not compare to other countries? When comparing gahmen performance, some level of comparison of certain benchmarks is fair. I’m was from California USA, working in the biotech industry requires me to stay around San Francisco or San Diego where the jobs are. I can get a cheap house on a huge plot of land out in the country and drive 3 hours to work, but that has it’s own set of problems.
Housing prices there were astronomical during the boom years, now the bust years are providing some relief. The gahmen didn’t help young families like mine do anything, although they were happy to tax about 33% of my income. Here, I have an option to purchase a flat with my Singaporean wife, and get subsidies while paying less than half the tax rate of the US.
Australia for example, has an income tax rate of about 25% for my income range. I never lived there so can’t accurately comment on the situation.
So I think Singapore has quite a good gahmen and much to be satisfied about. So yes, kiiri you are right, a handful of Singaporeans do like to complain about stuff, especially online!
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