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Tag: flats

  • Jufrie Mahmood: Millionaire PAP Ministers Have Lost Touch, Don’t Understand Anxieties Of Common Singaporeans

    Jufrie Mahmood: Millionaire PAP Ministers Have Lost Touch, Don’t Understand Anxieties Of Common Singaporeans

    Minister Lawrence Wong and his cabinet colleagues don’t live in 99-year lease HDB flats.

    With their millions, chances are, they would be living in landed free-hold properties in choice areas. Their properties are for keeps which they can pass on to their succeeding generations.

    They therefore don’t have the anxieties that we ordinary mortals have.

    That is the difference.

    Unlike your COE for motor vehicles the HDB and most other private properties’ COE is for 99 years.

     

    Source: Mohamed Jufrie Bin Mahmood

     

  • It’s The Singapore Way: Very Wealthy And Still Living With Mum

    It’s The Singapore Way: Very Wealthy And Still Living With Mum

    Everyone knows Singapore is an expensive country that’s transforming itself into a smart city. Here are five less-known facts about the island nation as it marks its 50th year of independence.

    Costly cars

    Car buyers in Singapore must bid for a limited number of permits — called Certificates of Entitlement — that are auctioned by the government. It’s tool used to control pollution and congestion and can more than double the vehicle’s market value. Consequently, an average family sedan can cost almost as much as a home in the U.S.

    Economic miracle

    The country went from third world to first in two generations. Singapore took 22 years to double its GDP per capita, about half the time of other developed economies including Australia. Its GDP per capita was S$71,318 ($52,000) in 2014, among the highest in the world. The island also has among the highest proportions of millionaire households, according to Boston Consulting Group.

    Living at home

    The majority of housing in Singapore is built by the government. More than 80 percent of the resident population lives in such accommodation, which is typically cheaper than privately developed properties. Because of these dynamics and a rule that prohibits most single Singaporeans from buying a public housing apartment while single — unless they are at least 35 years old — an overwhelming majority of unmarried adults live with their parents. And are big fans of Airbnb.

    Mandatory military service

    Singapore is among a handful of developed nations with compulsory military service for its male residents and citizens. The National Service is for a period of about two years, and typically begins at age 18, unless there are exceptional circumstances — like training for the Olympics, for example.

    Highly paid ministers

    Singapore’s prime minister is among the world’s highest paid heads of state. The government has justified his and other ministers’ salaries on the grounds that it helps attract top talent that might otherwise be lost to the private sector, and that it discourages corruption. It cut ministers’ salaries in 2012 after voter unhappiness over a widening income gap in the country. But they’re still very comfortably off.

     

    Source: http://english.astroawani.com

  • MND: Most Wiling To Pay More Than Average Price Of Flats

    MND: Most Wiling To Pay More Than Average Price Of Flats

    In a recent survey of nearly 1,500 residents, MND said it showed that majority of prospective flat buyers are willing to pay more than the current average prices.

    However, the survey also showed that people continue to view the new BTO flats as expensive. The survey was conducted in November last year.

    Last year, the average price of a 4-room HDB flat in a non-mature estate was $295,000. Eighty per cent went for under $350,000.

    MND said a third of the respondents did not know how much such flats cost, while 40% overestimated the price. The most common estimate MND said, was between $300,001 and $400,000 for a 4-room unit.

    That estimated price range was higher than the average $295,000, MND said.

    The survey also found that those who intend to buy a flat in the next 1 to 2 years are willing to pay as much as or more than actual BTO prices in non-mature estates:

    • 3-room flats (avg price $186,000 in 2014) – 58% willing to pay more than $200,000
    • 4-room flats (avg price $295,000 in 2014) – 61% willing to pay more than $300,000
    • 5-room flats (avg price $391,000 in 2014) – 51% willing to pay more than $400,000

    However, it’s not known if MND is aware that a person willing to pay more does not necessarily mean he is happy to do so. The 2 matters are not the same.

    In any case, the better approach to measure affordability of a flat is to take the ratio of the price of the flat over the annual household income of the owners.

    Many BTO HDB flats still remain unaffordable

    After Mr Khaw Boon Wan took over the job as National Development Minister from Mah Bow Tan in 2011, Mr Khaw told Parliament that more would be done to reduce BTO flat prices relative to income, so as to reduce the financial burden of housing on the young. He said [Link]:

    “Many are now clamoring for the HDB to return to basics and its original mission of helping Singaporeans own a basic home. But what does ‘returning to basics’ mean?

    The primary mission of HDB to offer an affordable flat for the majority of Singaporeans will remain unchanged. Fortunately this is within our control as we set BTO prices and HDB is the largest housing developer.

    We have stopped BTO prices from rising by delinking them from resale prices. We can now pause and see what else we can do to bring BTO prices in non-mature estates to, say, around 4 years of (annual) salaryas it was before the current property cycle started.

    One thing is clear. We are committed to restoring and maintaining the affordability of new HDB flats to the vast majority of first-timer Singaporean households. Their Singapore Dream of owning their own flats, like their parents’, is safe. We will make sure of that.”

    Note that Mr Khaw used the term “restoring” the affordability of new HDB BTO flats, which implies that in his predecessor’s time (i.e. Mah Bow Tan), the HDB BTO flats were already unaffordable.

    In the 70′s, a graduate’s starting pay was around $1,000 per month. Then, in Marine Parade HDB estate, the price of a new 3-room, 4-room and 5-room flat was $17,000, $20,000 and $35,000 respectively. A young graduate could easily afford a 5-room flat at a Price-to-Annual Income Ratio, also known as the Affordability Ratio (AR), of slightly under 3 (i.e. 3 years of annual income to match the price of the house). Even households earning $500 a month could easily afford a 3-room flat priced at $17,000 (AR under 3).

    The World Bank considers a ratio of 5 or under as affordable for local residents, while the United Nations has set the bar lower, at 3 (see Link). In any case, anything above 5 is considered unaffordable by both the World Bank and the United Nations.

    By 1990, the average price of a new 5-room flat was $70,000 and a young graduate earned about $2,000 a month. The AR then was still under 3 – very affordable.

    Examining the affordability of current new HDB BTO launches

    TRE took the opportunity to examine the affordability of new HDB BTO flats launched in November last year. A total of 7,568 flats were launched by HDB for sale in a mix of mature and non-mature towns on 25 Nov 2014 [Link]. This was HDB’s final sales exercise for 2014.

    Sembawang Sun Breeze

    Typical 2-room (I):

    • Nett selling price less grants = $30,000
    • Applicants’ median monthly household income = $1,600
    • Price to annual household income = 1.6

    Typical 2-room (II):

    • Nett selling price less grants = $50,000
    • Applicants’ median monthly household income = $1,600
    • Price to annual household income = 2.6

    Typical 3-room:

    • Nett selling price less grants = $115,000
    • Applicants’ median monthly household income = $2,500
    • Price to annual household income = 3.8

    Typical 4-room:

    • Nett selling price less grants = $240,000
    • Applicants’ median monthly household income = $4,200
    • Price to annual household income = 4.8

    Sengkang Anchovale Fields

    Typical 2-room (I):

    • Nett selling price less grants = $45,000
    • Applicants’ median monthly household income = $1,600
    • Price to annual household income = 2.3

    Typical 2-room (II):

    • Nett selling price less grants = $70,000
    • Applicants’ median monthly household income = $1,600
    • Price to annual household income = 3.6

    Typical 3-room:

    • Nett selling price less grants = $135,000
    • Applicants’ median monthly household income = $2,500
    • Price to annual household income = 4.5

    Typical 4-room:

    • Nett selling price less grants = $270,000
    • Applicants’ median monthly household income = $4,200
    • Price to annual household income = 5.4

    Yishun

    Typical 2-room (I):

    • Nett selling price less grants = $30,000
    • Applicants’ median monthly household income = $1,600
    • Price to annual household income = 1.6

    Typical 2-room (II):

    • Nett selling price less grants = $45,000
    • Applicants’ median monthly household income = $1,600
    • Price to annual household income = 2.3

    Typical 3-room:

    • Nett selling price less grants = $115,000
    • Applicants’ median monthly household income = $2,500
    • Price to annual household income = 3.8

    Typical 4-room:

    • Nett selling price less grants = $240,000
    • Applicants’ median monthly household income = $4,200
    • Price to annual household income = 4.8

    Typical 2-room (I):

    • Nett selling price less grants = $30,000
    • Applicants’ median monthly household income = $1,600
    • Price to annual household income = 1.6

    Typical 2-room (II):

    • Nett selling price less grants = $50,000
    • Applicants’ median monthly household income = $1,600
    • Price to annual household income = 2.6

    Typical 3-room:

    • Nett selling price less grants = $115,000
    • Applicants’ median monthly household income = $2,500
    • Price to annual household income = 3.8

    Typical 4-room:

    • Nett selling price less grants = $235,000
    • Applicants’ median monthly household income = $4,200
    • Price to annual household income = 4.7

    Conclusion

    For 2-room and 3-room BTO flats in Sembawang and Yishun, they are considered affordable at 4 years of applicants’ median annual salary or less. However, for 4-room flats, the AR is 4.7 to 4.8, way above Mr Khaw’s own target of 4.

    In this case, 4-room BTO flats should be priced around $201,600 (4 x $4,200 x 12) instead of the current $235,000 to $240,000 in Sembawang and Yishun (i.e, prices after grants).

    For Sengkang, the situation is worse. 2-room flats are priced below AR of 4 but 3-room and 4-room flats have ratios of 4.5 and 5.4 respectively, again, above Mr Khaw’s own target of 4.

    In fact, Sengkang 4-room BTO flats (AR of 5.4) are considered unaffordable by the standards laid down by the World Bank and the United Nations. Sengkang 4-room flats, instead of selling for $270,000 (after grants), ought to be selling at $201,600 (4 x $4,200 x 12). They are overpriced by 34%.

    One can only conclude that Mr Khaw has yet to fulfill his promise of bringing down ALL the BTO prices in non-mature estates to 4 years of annual salary, especially for first-time Singaporean buyers. The middle-income group appears to be squeezed by the higher new HDB flat prices for 4-room and above. For mature estates, the AR of new BTO flats would naturally be even worse.

    So, regardless of what MND is trying to say in its recent survey, the fact of the the matter is, new BTO flats remain expensive and not affordable even by Mr Khaw’s own measure, generally speaking.

     

    Source: www.tremeritus.com

  • HDB Operated With S$1.93 Billion Deficit in 2013

    HDB Operated With S$1.93 Billion Deficit in 2013

    The Housing Board’s deficit more than doubled in the last financial year, as building continues on the record number of new flats launched since 2011.

    In the year ended March 31, it incurred a $1.93 billion deficit on home ownership alone, according to its annual report released on Wednesday.

    The take-up rate of the Special CPF Housing Grant has also spiked since it was enhanced to make more households eligible in July 2013, said the HDB in a separate statement. This grant is given to eligible first-timer citizen families who are applying to buy a 2-room, 3-room or 4-room flat in a non-mature estate and who are able to meet the eligibility conditions under the scheme.

    Last year’s home ownership deficit was 2.7 times that of the previous financial year.

    The rise is mainly because the HDB has more projects on the go, after three years of ramped-up Build-to-Order launches. There were 86,298 flats under construction in the last financial year, up from 72,737 the year before.

    The HDB thus had to make a larger provision for foreseeable loss under its operating expenses. This is the difference between the estimated development costs and the selling price of flats. It accounted for most of the home ownership deficit last year.

    The overall net deficit before government grant and taxation was $1.97 billion, up from $797 million the year before.

    The HDB also introduced several policy changes in the last financial year, for which it gave updates on Wednesday.

    One such change was the July 2013 enhancement of the Special CPF Housing Grant, first introduced in March 2011. The income ceiling was raised and it was extended to four-room flats, making more middle-income households eligible.

    As of the end of October this year, the grant has benefited about 10,500 households – of whom 8,700 took it up after the change.

    The HDB also introduced measures to cater to various groups of flat buyers. Singles were allowed to buy new two-room flats in July 2013. As of the end of October this year, 3,700 have booked a unit.

    Large Three-Generation flats, meant for multi-generation families, were also introduced in the September 2013 BTO exercise. More than 500 have been launched, and as of October, 340 households have booked a unit.

     

    Source: www.straitstimes.com

  • Are HDB Flats Affordable For Low-Income Singaporeans?

    Are HDB Flats Affordable For Low-Income Singaporeans?

    Can a Singaporean who earns $850 a month afford to buy a Housing Board flat?

    Mr Mohammad Charlie Jasni says yes.

    The odd-job labourer earns that amount, and he and his family will be moving into a new two-room HDB flat in Punggol by the end of the year.

    He had successfully balloted for the 45sq m build-to-order unit in August 2009.

    It cost $99,220, but because he earns less than $5,000 a month, he qualifies for a government housing grant that gives him $40,000 to offset the flat’s price.

    This means he has $59,220 left to pay, which he will do using his Central Provident Fund (CPF) savings.

    He and his wife already have about $40,000 in their CPF accounts, and this will grow as he continues to work.

    Based on HDB’s calculations, he needs to pay a monthly housing instalment of $83 over 30 years.

    ‘By paying the $83 out of my CPF, it means I have that little more for daily expenses,’ said Mr Charlie, 33.

    He is currently living with his wife and two children in a two-room rental flat in Beo Crescent. They pay $44 a month for that flat.

    They are excited about their upcoming home and are already discussing renovation ideas and shopping for furniture.

    ‘It is good to have a home of our own,’ he said.

    Mr Charlie’s story puts a face to a statistic that has been debated in the last week.

    In Parliament last Thursday, Deputy Prime Minister Tharman Shanmugaratnam revealed that ‘a family with $1,000 income can now, through our housing subsidies, purchase a small flat’.

    He was responding to Workers’ Party member Gerald Giam’s comments about Singaporeans being unable to afford a flat.

    The minister’s remarks sparked off much discussion in both cyberspace and coffee shops alike. Some wondered how $1,000 could buy anyone a flat, given that sum was hardly enough to support a family’s daily living expenses.

    The next day, National Development Minister Khaw Boon Wan explained that Mr Tharman was referring to a new two-room flat.

    He added that the subsidised price of such flats was about $100,000 if the applicant was a first-time buyer. He would also be entitled to housing grants of up to $60,000.

    The net selling price would thus be $40,000, and the monthly mortgage payment can be fully paid from his CPF contribution, Mr Khaw said.

    In response to queries from The Straits Times, the HDB said it was unable to say how many households earning $1,000 a month own two-room flats. But it pointed to how that it has two schemes that target low-income, first-time buyers.

    The Additional CPF Housing Grant Scheme (AHG) benefits households whose income is not more than $5,000 a month. The maximum grant quantum is now $40,000, and it benefits 8,000 households every year, said the HDB.

    The Special CPF Housing Grant (SHG) is given to first-timer families earning up to $2,250 a month to buy a small flat. Those earning $1,500 or less get a $20,000 grant. SHG is over and above regular housing subsidies and the AHG.

    The HDB estimated that about 700 tenants currently renting flats under the Public Rental Scheme can benefit from the SHG if they decide to buy a flat. To date, the scheme has benefited 53 households who have bought two-room flats.

    The HDB also gave The Straits Times five recent case studies of households with monthly income of about $1,000 who bought two-room flats. Four managed to buy new flats with the help of both housing grants. The fifth used only AHG as SHG had not been implemented when he bought his flat.

    Out of the five families, three were rental tenants who have bought a new flat without taking any loan because they used the housing grant and their own CPF savings. The other two were families currently living with relatives who have bought new flats using both grants and their CPF savings.

    In one case, a couple who lived in a rental flat bought a new flat in Bukit Panjang. At the point of applying for a flat, their monthly income was $900.

    The flat cost $106,350. They got the maximum total housing grant of $60,000 – $40,000 AHG and $20,000 SHG. This, together with their CPF savings, meant they did not have to take any loan.

    In another case, a man and his mother bought a new flat in Sengkang for $117,750. They got $60,000 in grants, and took a 17-year loan with a monthly instalment of $131.

    Schemes to help with expenses

    THE Straits Times visited five blocks of two-room flats in the Woodlands and Ghim Moh areas this week and spoke to people in over 30 homes.

    Most of the residents there were renting their units.

    Of the four who owned their flats, one had downgraded from a four-room unit, while three others had downgraded after selling their previous flat in the Selective En Bloc Redevelopment Scheme.

    Among those renting, many were in their 60s and 70s and retired. They said they do not have much in their CPF or bank accounts, which is why they cannot buy their own units.

    Madam Tan Chui Eng, in her 70s, and her husband, Mr Teo Kim Wee, in his 80s, said they have been living in a two-room rental flat in Ghim Moh for six years.

    Most of the money in their CPF accounts has been used for medical expenses, they said. They have three daughters who pay their monthly rental of $61 and utility bills. ‘Of course, we would like to buy our own flat, but we cannot afford it,’ said Madam Tan in Teochew.

    MPs said that with grants and other assistance schemes, households earning $1,000 should be able to afford a two-room flat.

    Mr Vikram Nair, an MP for Sembawang GRC, said he knows of such households who rely on CPF contributions to finance their purchases.

    As to whether $1,000 is enough for a family to survive, he said there are public assistance schemes, such as GST vouchers and Workfare Bonus, which can help low-income families cope with daily needs.

    Mr Liang Eng Hwa, MP for Holland-Bukit Timah GRC, said regardless of whether they buy a flat, low-income households have little cash on hand. But rather than use cash to pay rent, ‘why not use the CPF to pay for a flat?’

    ‘The cash they save by not paying rent may not be much, but still it gives them that little more for daily expenditure,’ he added.

    For odd-job labourer Mr Charlie, every bit saved helps to pay for living expenses. His wife does part-time administrative work.

    He did not think he could afford a flat ‘but when HDB re-introduced two-room flats again, I felt that perhaps I could afford one’.

    In 2006, HDB resumed construction of two-room flats after 20 years, to give more housing options to low-income households.

    He decided to wait a bit because he wanted to build up his CPF account first. Now that he has bought a home, he feels the pressure of maintaining his CPF account so that the flat can be paid off.

    ‘Some companies are cutting back on manpower and I’m scared that I may lose my job,’ he said.

    But he does not regret buying the unit. He hopes to pass the flat – or a bigger one should they ever upgrade – to his children.

    How he pays for his flat

    Monthly income: $850

    Total household CPF: $40,000

    Cost of build-to-order flat in Punggol: $99,220

    Additional CPF Housing Grant Scheme: $40,000

    Remaining cost of flat: $59,220 ($99,220 less $40,000)

    Estimated monthly instalment for payment: $83 for 30 years

    Deduction from CPF: $83

    Cash outlay: $0

    _________________________________________________

    Housing help for low-income families

    THE Housing Board (HDB) offers two grants to low-income families so they can buy their own flats:

     

    • Additional CPF Housing Grant Scheme (AHG)

     

    THIS was introduced in 2006 to help lower-income Singaporean families buy their first HDB flat. It is targeted at households with incomes of not more than $5,000 a month.

    The size of the grant is based on the applicant’s average gross monthly household income. The grant varies between $5,000 and $40,000. Households earning $1,500 or less a month will get $40,000.

    AHG is an additional subsidy over and above the regular market subsidy and CPF Housing Grant. Both new and resale flat buyers are eligible for AHG.

    It offsets the purchase price of the flat, thereby further reducing the loan a flat buyer needs to take. It is estimated to benefit 8,000 households a year.

     

    • The Special CPF Housing Grant (SHG)

     

    THIS was introduced last year as an additional grant for first-timer low-income families earning up to $2,250 a month, so they can buy a small flat from the HDB.

    The SHG is given out over and above regular housing subsidies and the AHG. Households earning $1,500 or less a month will get $20,000 in SHG. About 700 tenants currently renting flats under the Public Rental Scheme can benefit from the SHG if they choose to buy a flat.

     

    Source: http://www.stproperty.sg