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Cumulative total loss (for illustrative and conceptual purposes) when HDB becomes $0

Cumulative total loss (for illustrative and conceptual purposes) when HDB becomes 0 at end of 99-year lease: $1.2t, at age 65 $500.6m?

Someone asked if I could try to calculate how much one would have, in a sense. lost until age 65, and in his lifetime, when he buys a HDB BTO flat?

Well, if we assume that the flat price is $200,000, and purchased at age 30:

At age 65:

$40,000 down-payment @ 2.6% for 35 years until age 65 = $98,224
$722 monthly mortgage repayment for 25 years @ 2,6% = $304,012
$304,012 @ 2,6% for 10 years until age 65 = $392,974

So, the grand total at age 65, is $491,198 ($98,224 + 392,974)

With 1,019,120 “sold flats” – does it mean that the cumulative total loss, at age 65, may be about $500.6m?
At the end of the 99-year lease:

$40,000 down-payment @ 2.6% for 35 years until the end of the 99-year lease = $235,087
$722 monthly mortgage repayment for 25 years @ 2,6% = $304,012
$304,012 @ 2,6% for 44 years until the end of the 99-year lease = $940,532

So, the grand total is $1.18m ($235,087 + 940,532)

With 1,019,120 “sold flats” – does it mean that the cumulative total loss, at the end of the 99-year lease, may be about 1.20t? [LINK]

Another way of looking at it, may be that if you are not allowed to use your pension fund (CPF) to purchase residential property, like most countries in the world – you may have accumulated (on the average in this example) $491,198 at age 65, and $1.18m at age 99 (end of the typical 99-year lease), for your next generation.

 

Leong Sze Hian

 

 

yyy
READER COMMENTS BELOW

13 Responses to “Cumulative total loss (for illustrative and conceptual purposes) when HDB becomes $0”

  • Wrong, wrong:

    Mr Leong, should use 4%. If you don’t use it to buy HDB, they can put in special account for 4%. Will that work to $3 million instead of $1 million?

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  • CostofFiat:

    If you count using fiat, fiat cartel decide you profit or loss at will and all formula does not matter. You can only play within your limit but game reset, restart, top up and all power that can be done by fiat cartel is unpredictable. Stop wasting time to do any long time projections predictions which are more fake than COVID.

    The conditions decide your calculations are changing and not within your control. If you are in control
    then fiat system will collapse next day.

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  • BIG STORY: Stop the PAP Steal:

    How about the Component of Opportunity Costs??

    This is a very very crucial, important piece of info value which any economist view as IMPORTANT to a productive society which produces goods and services, for consumption and wealth generation for its people.

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  • BIG STORY: Stop the PAP Steal:

    Wrong, wrong:
    Mr Leong, should use 4%. If you don’t use it to buy HDB, they can put in special account for 4%. Will that work to $3 million instead of $1 million?

    Yes, agree. In fact by extension, Temasick rate of returns is CERTAINLY MORE THAN $3 million BASED SIMPLY on their BOASTFUL performance.
    Then, $6 million instead of $1,000,000 (millions)

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  • only stupid people vote pap:

    Wrong, wrong:
    Mr Leong, should use 4%. If you don’t use it to buy HDB, they can put in special account for 4%. Will that work to $3 million instead of $1 million?

    well said. agree.

    one more thing. property tax. we used to pay S$130+ per annum. now we pay S$240+ per annum.

    1,109,120 x 130+ = 132,485,600 per annum. basic without counting interest forgone, for 35 years, amount is 4.6b+.

    from 2023, property tax on HDB owned public housing which sinkies and us rent on prepaid basis, has gone up by S$110+ per annum.

    additional monies lost per annum are 1,109,120 x 110+ = 122,003,200+ per annum.

    with all these monies, why does pap need to raise GST for a nation of only 3m+ local born sinkies?

    where have all these monies collected by pap gone to?

    remember. HDB is an asset which value never goes down is a pap lie.

    remember. pap needs to build up reserves for the future generation is another pap lie because there is NO future generation at all as far as pap is concerned.

    pap PA paid IBs say, sure got future generation under pap regime. ffff. we are not the future generation. pap collected from us for future generation. our children are not the future generation. pap collected from our children for the future generation. now with our grand children, we discover our grandchildren are also not the future generation. in fact, pap has raised GST from 7% to 8% to collect from our grandchildren in order to help them more. truly a lying self enriching group of S$m multi millionaires never intended even once that there is to be a future generation in pap Singapore.

    since there is no future generation, there is really no need for pap to collect reserves seeing from HDB alone pap has already trillions in pap coffer, unless all the trillions are already gone into swiss accounts which a non pap selected President shall need 50 may years to find out.

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  • Beware of CIA operatives:

    On this topic, the Hardwarezone folks are mostly on target. But there is this one poster, always agreeing with anything with a but.

    For example, everyone is talking about how well Mr Leong MW is talking and how badly prepared is the pap sim ann. This particular poster, without fail, will say, I used to support Mr Leong MW but now no longer because he keeps harping on BTO when it is no longer a fresh topic.

    This is typical pap IB behavior in Hardwarezone. The pap IB behavior in Hardwarezone is no different from the CIA operatives behavior in TRE. Fortunately, these duds are easily singled out, especially in TRE. For fellow citizens here in TRE, the telltale signs are misspelled CPC as CCP, usernames such as hahaha knnn wumao dogrunner etc.

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  • Loh KK:

    “Another way of looking at it, may be that if you are not allowed to use your pension fund (CPF) to purchase residential property, like most countries in the world – you may have accumulated (on the average in this example) $491,198 at age 65, and $1.18m at age 99 (end of the typical 99-year lease), for your next generation.”

    Forgive my ignorance. If we are not allowed to use our CPF to buy property,the accumulated amount that we can leave for the next generation as calculated by Leong Sze Hian looks impressive.

    In the meantime, where do we stay and using what money since the illustration is based on no CPF money allowed to buy property.

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  • xoxo:

    Not plausible as need a roof over the head for the family.
    All is needed is for HDB to be redirected to its original intended objective of providing truly affordable homes for ordinary sgs whose ancestors land were acquired at DIRT CHEAP PRICES.
    RICH MEN’S LAND MOSTLY UNTOUCHED N WORTH MILLIONS.
    So for Desmond to peg current HDB LAND COST AT higher of MARKET VALUE instead of *cost* at acquisition (whose AVERAGE COST -PAST N LATER ACQUISITIONS) IS MOST UNFAIR.

    HDB OWNERSHIP MUST BE FOR SGS ONLY,PRs can rent.
    Much hardship caused by rampant $peculation by NON-SG BUYERS,i am certain.

    The G shud regularise n then regulate HDB MORE CONSCIENTIOUSLY.

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  • Better Retirements:

    More Singaporean will have better retirements at the end if their HDB flat do not take too much of their Savings.
    Many end up cash poor at retirements, socially with HDB flat value going to zero at the end of the lease..
    The affordable value should be about 60% or less than the present value…
    Better to inject more cash into the economy than HDB Flat.

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  • KT2:

    Based on Mr leong’s narrative, I wonder if there would be another round of pay rise for millionisters in d near future ? I think some of them r not up to d standard and probably needed more money to boost them up ? The amounts in our reserves are unknown or top secret. GST has just increased from 7% to 8% and next year to 9%. What goes up nvr come down ! Our leased or so-called purchased HDB flats’ property taxes hv gone up, too and wat others ?

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  • The HongKong Problem:

    We will have exactly the same problem as HongKong. VERY soon.
    The Moneyed Elites-Landed Gentry-PowerHolders take care of each other interests.
    Build, build, build…and build.
    Bring in more people to fill up the housing units.
    6.9M…10M …so what.
    Hence prices continue to rise.
    Let the next generations be damned.
    Let your children, grand children be mortgage-enslaved; 99-year HDB prison sentences.
    Housing units keep shrinking in size…and get closer and closer.
    Meantime ABSD [lip service] easily overcome by decoupling.
    Empty HDB flats, private apartment hoarding by locals and foreigners go relatively unchecked.
    HDB was suppose to police their own ruling regarding EMPTY flats.
    BTW …..ABSD on land purchase was to prevent land hoarding.
    Why no ‘Ghost Housing’ tax to prevent apartment HOARDING?

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  • only stupid people vote pap:

    KT2:
    Based on Mr leong’s narrative, I wonder if there would be another round of pay rise for millionisters in d near future ? I think some of them r not up to d standard and probably needed more money to boost them up ? The amounts in our reserves are unknown or top secret. GST has just increased from 7% to 8% and next year to 9%. What goes up nvr come down ! Our leased or so-called purchased HDB flats’ property taxes hv gone up, too and wat others ?

    pap gets away with all the lies only because sinkies allowed it. will pap get away with the lies forever? surely not.

    each election, when we get to vote, for sure there will be votes for OPPO.
    if only another 12% vote OPPO, pap folks lose and run road with their S$m.

    new government by a better group of Singaporeans shall right all the wrongs under pap. the most important agenda of the new government is to indict all the pap folks who have done wrong with open eyes. what all some of the confirmed wrongs of pap folks, alive or dead? telling lies. all the pap folks have told lies, all of them.

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  • BTOvictim:

    The BTO system creates a lot of tragedy for SGrean young couple.

    The wait for approx. 5 years from signing is long enough for relationship to turn sour. Young people today is dumb like their parents & grandparents.

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