HDB down, private property up?

I refer to the article “HDB resale prices in June down 0.3% from May, SRX Property data shows” (Straits Times, Jul 5).

It states that “Resale prices of Housing Board flats fell 0.3 per cent last month from May, according to flash data released by real estate portal SRX Property on Thursday (July 5).

The data also showed that prices fell by 1.9 per cent from the same month last year, and by 13.3 per cent since the peak in April 2013.”

In contrast, “prices of private housing have increased by 9.1 per cent since the trough in Q2 2017. This has mostly offset the cumulative price decline of 11.6 per cent during the four-year period between mid-2013 and mid-2017” (Business Times, Jul 5).

Both HDB resale and residential private property prices have been going south from around the second quarter of 2013.

However, whilst private property resale prices have rebounded from around September last year – HDB resale prices continue to fall.

Historically, the two are very closely correlated.

So, why the apparent deviation now?

Has it got anything to do with Singaporeans realisation that older HDB flats may be declining in value rapidly to zero at the end of the typical 99-year lease?

 

Leong Sze Hian

 

 

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29 Responses to “HDB down, private property up?”

  • PC Ong:

    Private property price increase because of en-bloc fever and foreign demand for private homes in Singapore remain strong. HDB resale price fall only marginally because banks unwilling to extend loans if the remaining lease less than 60 years. Even if HDB fall to zero after the 99-years lease, most buyers won’t be around anymore, so no big deal. And even if people are still around when the lease expire, the govt will either rehouse them temporarily while they search for new accommodation, or they just have to pay a nominal amount to top up the lease for say, 10 or 20 years. The govt will never allow people to lose their homes.

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  • LIONS:

    This shud be the way.
    The govt shud just regulate HDB N let private be private.
    Let the rich fight in private market.
    HDB shud remain affordable for first-time buyers.

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  • opposition dude:

    “Has it got anything to do with Singaporeans realisation that older HDB flats may be declining in value rapidly to zero at the end of the typical 99-year lease?”

    We all know the answer to this one uncle Leong but let the gongkias continue to think that their close to approaching 40 year old flats are still increasing in value.

    It’s going to be quite a show to watch since there will be a good number of flats hitting 40 years once we get to 2020 and beyond. I’, expecting something to be announced by PAP a year or so to the next GE since with a lot of timebombs all over the island is when you get a lot of angry voters as well.

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  • oxygen:

    AFTER THURSDAY NIGHT FEVER – LAWRENCE WONG TOOK OUT THE CANE, both private property & public housing is sobering down – PRIVATE PROPERTY PRICES NOW HAVE A DOWNSIDE RISKS OF 15% FROM HERE, judging from the 15% crash in the market capitalisation of City Development Limited shares on Friday.

    Yes, value will decline rapidly towards lease expiry but PRIVATE PROPERTY FARE WORST because the capital outlay is far bigger than HDB – so same percentage decline translate to smaller capital loss in public housing.

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  • Go And Ask PAP Crooks:

    All because of the CB mouth of Lampar Wong.

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  • oxygen:

    @ PC Ong

    GOOD FICTION WRITING or you must be clairvoyant of fantasy fabrication below.

    PC Ong: Private property price increase because of en-bloc fever and foreign demand for private homes in Singapore remain strong. HDB resale price fall only marginally because banks unwilling to extend loans if the remaining lease less than 60 years. Even if HDB fall to zero after the 99-years lease, most buyers won’t be around anymore, so no big deal. And even if people are still around when the lease expire, the govt will either rehouse them temporarily while they search for new accommodation, or they just have to pay a nominal amount to top up the lease for say, 10 or 20 years. The govt will never allow people to lose their homes.

    Lawrence Wong have already said Govt. will take it back for zero value. It means you are either a burglar inside or live on the street.

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  • Dont be conned by PAP:

    The next GE is coming. So PAP recently announced HDB enbloc for 3 blocks after a long time. Afterall, about 80% of the population live in HDB flats, the subsidized government 99 year leasehold flats mainly for those who cannot afford private properties.
    Many flat owners and their children (not HDB owners, just occupiers) aspire to upgrade to a private property. As many Singaporeans in their twenties and thirties remain single and live with their parents, so PAP stats that household income has increased significantly only paint half the picture.
    Private property prices have risen by 10% the past year, soon to hit the 2013 record price.
    Why?
    PAP is controlling land supply, reducing land sale to the property developers.
    Property developers in the course of their business need land bank and build houses, and sell units in phases at higher price at each later phase to entice anxious buyers’ fear of rising price, and make as much profit as possible.
    Property developers bid record prices for the limited government land sale and compete among themselves to bid aggressively for enbloc, resulting price appreciation of not only properties with enbloc potential but also the surrounding properties, which basically mean the whole of this small island.
    Property developers build shoebox size and small units, costing less than $1 million at more than $1800psf, to target singles and those with limited budget.
    Why is PAP not releasing more land?
    Property developers and the rich like PM Lee, Goh Chok Tong, Mah Bow Tan own many properties, so it is in their interest to control the supply and sale of units.
    Property developers know that if the price drops by more than 10% in a short period of time, PAP will extend QC, and waive stamp duties. PAP did that at least twice before, the last time in 2008-2009 when Mah continued to freeze land sale and exempt all rules and stamp duties when prices had rebounced to hit the previous record prices.
    The pent up demand due to the farce cooling measures introduced by Mah and Khaw, and the recent price rise of more than 3% every quarter makes anxious upgraders, singles and investors rush in to buy.
    Lawrence Wong just reduced land sale for H2 2018, citing huge upcoming supply. He again said huge supply following the latest measures.
    Mah from 2009 to the eve of GE2011, reiterated huge supply, to justify land sale freeze and then low land sale, and prices hit from record to record until 2013. And PAP suffered the biggest GE setback in 2011 in its history.
    It is deja vu.
    History is going to repeat from now to the next GE and thereafter.
    PAP will do everything to retain power, not just for the million $ pay but also gains (eg properties) on the side, worse still, they may otherwise suffer the fate of Najib.

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  • Enough Said, Action Time:

    Kick out those evil greedy thieves who stole our home, HDB and CPF.

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  • Oxy misses:

    Apparently just before the sudden imposed new measures kick in , so many chiong to secure a unit.

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  • Bapak:

    All these Sinkies gong kia will never learn. Before GE, PAP will come up with mothership statements that the value will go up these gong kias will trust them giving their vote to PAP again. After GE PAP will do the same telling these gong kias HDB flat will be zero rated eventually. These gong kias will kpkb. Then come the next GE these stupidity process will repeat again.

    Sinkies gong kias will NEVER learn because we are engineered by PAP system to just follow, to trust them at all costs no question ask. Over times Sinkies has lose its analytical power – that mean the brain became useless. They are stupid till beyond believeable. And PAP is laughing all the way to the bank.

    opposition dude:
    “Has it got anything to do with Singaporeans realisation that older HDB flats may be declining in value rapidly to zero at the end of the typical 99-year lease?”

    We all know the answer to this one uncle Leong but let the gongkias continue to think that their close to approaching 40 year old flats are still increasing in value.

    It’s going to be quite a show to watch since there will be a good number of flats hitting 40 years once we get to 2020 and beyond. I’, expecting something to be announced by PAP a year or so to the next GE since with a lot of timebombs all over the island is when you get a lot of angry voters as well.

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  • oxygen:

    @Dont be conned by PAP

    Mah did that in 2008/2009 to save the banks – it is the GLOBAL THING then. Save the banks or save borrowers. In LEE-jiapore, banks were vulnerable if property mkt crash together with economy crash. I doubt prices recovered to previous record prices – a lot got burnt of waterfront properties and Sentosa Cove – many sold in 2016 still taking big losses.

    The cooling measures were re-introduced in 2013 and last week is howitzer artillery bombardment on top of mortar fire of 2013 – just as property going back to 2013 level again.

    2013 is now double-top benchmark peak. City Dev share price tumbled 15% on Friday. Expect a 15% price correction at least from current level over time.

    GLOBAL ECONOMIC CONDITIONS ARE GLOOMY – PAP can’t control that or contain all its risks attached.

    Dont be conned by PAP: Property developers know that if the price drops by more than 10% in a short period of time, PAP will extend QC, and waive stamp duties. PAP did that at least twice before, the last time in 2008-2009 when Mah continued to freeze land sale and exempt all rules and stamp duties when prices had rebounced to hit the previous record prices.

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  • oxygen:

    @ Oxy misses

    THOSE WHO CHIONG IN THE NIGHT before new measures kick in WOKE UP NEXT MORNING DISCOVERING THE SHARE PRICE OF CITY DEVELOPMENT tumbled 15%.

    Oxy misses: Apparently just before the sudden imposed new measures kick in , so many chiong to secure a unit.

    Property chase is ONE IDIOT DECISION. City Development – Sgp largest developer – its shares are bought/sold by dozens of fund managers locally and key financial centres in the world all collectively sold it down.

    ONE IDIOT SMARTER THAN THE WHOLE WORLD OF HIGHLY EXPERIENCED FUND MANAGERS?

    THINK AGAIN??

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  • oxygen:

    @ Oxy misses

    THOSE WHO CHIONH THE NIGHT BEFORE were offered 5% discount – EMOTIONAL DECISION.

    NEXT DAY, the stock market gave City Dev share a 15% discount.

    The whole financial market stupid or the one who chionh the night before for 5% discount STUPID?

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  • Singapore Fooled Again n Again:

    Singapore have the rich enrichment programme that favour the 10% to 15% of the richest population whereas the HDB flat owners can only suck thump.

    Those rich owners and landlords can see their properties, be it private Freehold or even 99 years leasehold go up 100% to 500% in just 5 to 8 years, or a few millions $ to tens of millions $ for doing nothing.

    For HDB flat owners, even if their flat goes up 50%, so what can you do? That is the only roof and if sold stay at the beach? Private owners can sell for a few million $ profit especially if gain from en-bloc. HDB flat if goes SER (selective En-Bloc), HDB just pay them a market rate, usually not enough to bug another new HDB flat of the same room type and still have to cough up more money form own pocket to renovate and buy furniture.

    See the difference class of citizens? The rich getting millions for doing nothing but the working class and the poor getting almost nothing, oh, maybe every few years, a few hundred $ GST voucher

    oxygen:
    @ PC Ong

    GOOD FICTION WRITING or you must be clairvoyant of fantasy fabrication below.

    Lawrence Wong have already said Govt. will take it back for zero value. It means you are either a burglar inside or live on the street.

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  • Perspective:

    Private condos on 99-year leases will face the same predicament as HDB flats when their leases run out.

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  • oxygen:

    @ Perspective

    BUT THEY HAVE THE OPTION TO EN BLOC, not HDB. Without en bloc, their losses MUCH MUCH BIGGER because their invested funds stuck in there is FAR BIGGER.

    Perspective: Private condos on 99-year leases will face the same predicament as HDB flats when their leases run out.

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  • IB Ong:

    how come private property got en-bloc fever, but HDB don’t have?

    HDB owners don’t want en-bloc?

    HDB owners happy to sit out until zero?

    Or

    HDB owners actually are not owners after all?

    PC Ong:
    Private property price increase because of en-bloc fever and foreign demand for private homes in Singapore remain strong. HDB resale price fall only marginally because banks unwilling to extend loans if the remaining lease less than 60 years. Even if HDB fall to zero after the 99-years lease, most buyers won’t be around anymore, so no big deal. And even if people are still around when the lease expire, the govt will either rehouse them temporarily while they search for new accommodation, or they just have to pay a nominal amount to top up the lease for say, 10 or 20 years. The govt will never allow people to lose their homes.

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  • Rabble-rouser:

    @ oxygen:
    Actually, EnBloc enrichment from selling private property collectively isn’t as economically viable as previously (re: periods from 1994 to 1996; 2000 & 2007-2008). Today, it’s called accepting Fool’s Gold! The basic reason is that the REPLACEMENT COST of seeking a replacement property far outweighs the selling of your EnBloc property. To me, it’s either a zero-sum or worse, a negative-sum game.
    Because, you’ll exchange a comfortable abode in a great location & which you’d had spent good money renovating to your comfort only to ‘downgrade’ to a smaller unit located somewhere in the boondocks & worse, have to spent good money to re-do it to your preference. You can’t buy back a similar property in the same locality because the surrounding properties would have up their asking prices due to EnBloc potential or simply refuse to sell hoping for EnBloc riches. Another factor is the high inflation of renovation costs in S’pore. About 20 years ago, we could have renovated a 1,000 sq.ft. apartment extensively with (big piece) granite slab flooring, extensive electrical works, fancy cornices, drop lighting, etc. BUDGET: SG$40k-50k at the most. These days for the same level of finishings, it would take at least SG$150k or more. Over 3x inflationary increase- Why? Sand is very scarce & expensive these days, labour is equally expensive as worker’s levies had gone up while material costs had also gone up significantly due to businesses needing to keep up with rising costs. And I had commissioned more renovations/revamps than I care to remember on properties over the years because I had either moved, rented it out or needed to upgrade. But I never overcapitalized on renovations because it is an expenditure, not an investment. I laugh reading Asiaone’s frequent features on decor & theme-based renovations costing hundreds of thousands. Silly, wasting savings or going into debt just to showcase a conspicuous consumption lifestyle.
    The asset capital ratio between a HDB flat & a private apartment are about 3x to 4x difference. But the rental returns between a HDB flat & a private apartment is about the same in a central location which speak volumes of an overvalued private property market.

    oxygen:
    @ Perspective
    BUT THEY HAVE THE OPTION TO EN BLOC, not HDB. Without en bloc, their losses MUCH MUCH BIGGER because their invested funds stuck in there is FAR BIGGER.

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  • PAP's Daylight Robbery:

    oxygen:
    @ Perspective

    BUT THEY HAVE THE OPTION TO EN BLOC, not HDB. Without en bloc, their losses MUCH MUCH BIGGER because their invested funds stuck in there is FAR BIGGER.

    You kick out PAP, then HDB can enbloc as well, definitely NOT ZERO value.
    You can get to get back your CPF money as well.

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  • Kick Them All Out:

    Dead old fuk also don’t dare to steal HDB, this useless upstart lampar Wong proudly declared that he is stealing the low hanging fruits from hardworking sinkies.

    He thinks dafts are really that gong to forego the hefty prices paid for HDB land, which incidently was also robbed from pleasants using land aquisition act.

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  • Si Mi Lan:

    @ THOSE WHO CHIONG IN THE NIGHT before new measures kick in WOKE UP NEXT MORNING DISCOVERING THE SHARE PRICE OF CITY DEVELOPMENT tumbled 15%.

    But they are vested in the shares so should not be affected.

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  • Rabble-rouser:

    Great link to article on why EnBloc not so great these days & July 8, 2018 at 1:39 pm comments.
    Link: http://finance.theindependent.sg/en-bloc-condominium-foreign-owner-says-collective-sale-not-worth-it-and-wont-make-him-rich/

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  • Si Mi Lan:

    Sorry typo.
    But they are not vested in the shares so should not be affected.

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  • oxygen:

    @ Si Mi Lan

    NAIVE THINKING AND IGNORANCE DISPLAYED – 15% fall in share price of City Devt & UOL speaks VOLUME of market reaction of falling property price of those projects in their current development, and hence forward earning potential of both developers after the new cooling measures.

    Si Mi Lan: @ THOSE WHO CHIONG IN THE NIGHT before new measures kick in WOKE UP NEXT MORNING DISCOVERING THE SHARE PRICE OF CITY DEVELOPMENT tumbled 15%.

    But they are vested in the shares so should not be affected.

    and

    Si Mi Lan: Sorry typo.
    But they are not vested in the shares so should not be affected.

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  • oxygen:

    @ Si Mi Lan

    READ THIS MAS WARNING ON OVER-VALUATION risks in the property market for your education.

    https://www.theonlinecitizen.com/2018/07/04/mas-cautions-developers-of-overbidding-while-foreign-developers-aggressively-bid-up-spore-land-price/

    Of course, developers no shiok lah – deprived of a chance to sell highest price to biggest goondus to maximise their profit potential!!

    https://sg.finance.yahoo.com/news/property-curbs-challenged-leading-developers-115835067.html

    and banks reduced their risks in cutting back exposure to overinflated goondu property chasers.

    http://finance.theindependent.sg/singapore-banks-will-benefit-from-tighter-regulations-to-cool-property-market-moodys/

    LOSERS ARE STUPID PROPERTY CHASERS AND PROPERTY DEVELOPERS, LAH.

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  • oxygen:

    @ Si Mi Lan

    WHEN THE ECONOMY SPIN INTO A DOWNWARD SPIRAL, Lawrence Wong would be very proud he saved a lot of otherwise suicidal dumbfarked idiots chasing a property bubble against a backdrop of wobbly global economic turbulence.

    MAS already warned idiots last November – the property-mad infatuated took no heed, so LW took out the cane – rightly so.

    https://www.channelnewsasia.com/news/business/mas-warns-of-excessive-exuberance-in-property-market-3-key-9456102

    AFTER HE WHIPPED IDIOTS, SOME STILL REFUSED TO WAKE UP, IT SEEMS.

    UM-CHAI-SI – CHIONH RIGHT AT THE LAST DEADLINE – fools rushed in where devils fear.

    THAT ALWAYS HAPPEN.

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  • Si Mi Lan:

    Since all these fools or idiots as you claimed , wants to be sacrificial lambs or vanguards … Just let them.

    Win they claim credit, lose take responsibility.

    Besides many of these are foreigners, new citizens , prs.

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  • oxygen:

    @ Si Mi Lan

    GLOBAL ECONOMY HAS WALKED TO A FORK JUNCTION – both with bad outcomes, property speculators still betting in the casino.

    Either the Trump tariff war adds to inflation spiral and interest rate hike hitting all debt-financed mortgage

    or

    the tariff fuel tadrade war crash the global economy and employment undercutting income to fund mortgage likely to be underwater in recession.

    EVEN THE FED CHAIR JEROME POWELL IS UNSURE WHICH ONE WILL BE THE ADVERSE OUTCOME – HE CONFESSED IN NY LAST NIGHT.

    https://www.marketwatch.com/story/feds-powell-says-trade-disputes-could-turn-out-badly-2018-07-12

    Read his grim warning and assessment. I, MAS and Lawrence Wong are not the only pessimists.

    The outlook forward is shaky and investors/gamblers are complacent including those who chionh on Thursday night – one bad turn – they are in a bloodbath.

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  • oxygen:

    @ Si Mi Lan

    PROPERTY-MAD FANATICS ARE ALL STUPID CAWKED MYOPIC OF TUNNEL VISION – the only vocabulary that ever existed in their mind is one word only – PROPERTY.

    Just take a look at the behavioral responses of these mob.

    Oxy misses: Apparently just before the sudden imposed new measures kick in , so many chiong to secure a unit.

    The rushed in, chased the ticking clock and bought a property – seduced by 5% discount. It is like a houseowner (read developer) throw some crumbs on the floor just b4 midnight switch off the light to tempt the desperate greedy cockroaches they know must be lurking in the crevices.

    SURE THEY COME – feeding on the crumbs.

    If these cockroaches are smart and convinced that the property market can re-incarnate from death to its last near peak glory, they would be a LOT SMARTER, SIT BACK AND BUY LOADS OF CITY DEV AND UOL SHARES at 15% discount overnight. And when and if property market recover ( I doubt), they secure their 15% gain WITHOUT MORTGAGING THEIR ANUS to the bank and headaches with the expanded stamp duties levy.THEIR GAINS ARE BIGGER AND RISKS SMALLER.

    SEE HOW DUMB PROPERTY FANATICS ARE – MOST ARE THE DUMBEST LOT OF INVESTORS – STUPIDLY THINKING IT IS SURE WIN BET, NO RISK when the reality actuality is THE REVERSE!

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