atans1

PM questioned on studio apt pricing

In Public Administration on 12/04/2013 at 5:12 am

Here’s a topic Uncle Leong, SDP  and other kay pohs activists missed. This juz shows that there are cso many things wrong here. Or juz that they don’t live in HDB flata?

A few weeks ago, I met someone whose wants to move into a HDB studio apartment. On the HDB website there were two flats available under a previous scheme that started in the early noughties. The tenants had “moved on” and the flats returned to the HDB*. The flats were being offered for around $120,000.

He wrote to the PM asking the rationale for the drastic price increase. He wanted to know why since the flat had been returned, why the same flat was being reoffered offered at almost double the original price about 10 yrs ago**. All the HDB had to do was to restore the flat to its original condition before leasing it out. Even assuming the flat had been thrashed by the previous tenant and taking into account the rise in labour and building materials, how come the doubling in price?

He said the PMO had called him asking for his email address, so he assumed that the PM or HDB would be in touch.

Sadly I forgot to give him my email address or telephone number so that he could keep me posted. I also forgot to ask for his contact details or his full name.

——

*The arrangement is that these flats are made available on a 30-yr lease, payable upfront. If the tenant moves on, the flat has to be returned to the HDB, which will pro-rate the amount paid based on the occupancy period, and refund the outstanding amount.

**When the scheme started in the early noughties, he said, the flats were price at around $60,000 each.

  1. PAPies are all excellent biz experts under the monopolistic market,they all will be billionaires in their kin brothers’ country-Communist China.I believe the answer PM Lee will give to that guy is the familiar “under present (monopolistic) market condition”

  2. […] Thoughts of a Cynical Investor : PM questioned on studio apt pricing – BLUTA-log: Show Flats – Authorities Outline Dos and […]

  3. I think this is like a repo agreement or secured loan in which the seller (govt) takes on both market risk and economic benefits.

    • What risk for govt? Gets paid for flat upfront. It controls supply. Demand is there.

      • The govt is assuming the risk when it is obliged to buy back pro-rate in any scenario including market crashes or zero demand for flats. Imagine if say war breaks out and flat prices drop from 60k to 30k, a tenant with 15yrs left can sell back to govt, get back 30k (price of full 30 yr lease now) and flee the country. Very unlikely scenarios I know but not impossible.

      • Will pass yr name to HDB. Still trying to answer to answer the letter that was forwarded to Khaw from PM. ))))

  4. The HDB has controlled housing for 80% of homes in Singapore,has absolute control of the price including the resale market as their regulations over purchase and sale still was governed by them.

  5. Jack/CI

    HDB does not set the market price for resale flats which is willing buyer and seller.
    During the SARS crisis, there were plenty of balance flats in good areas where the prices were lower than SERS buyers at the time.
    So there is risk dependent on timing

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