Public housing in Singapore is heavily subsidized by its Government. This is one thing that you must credit the government for providing for its people. In return, however, the government has slapped on a number of restrictions on buyers of these houses, or high-rise apartments.
1. There is a combined salary limit beyond which the family is not eligible to buy the apartment.
2. There must be at least two buyers which forms a family unit - either Husband/Wife, Fiance/Fiancee, Mother,Father/Son, Daughter.
3. The apartment cannot be resold within 5 years of of the issue of the TOP license
4. The apartment cannot be sold to foreigners. Only Singapore citizens and Permanent Residents are eligible.
5. You cannot remodel the house without prior written permisson from the government.
Yet in spite of all these, people are forming a bee-line for the privately developed HDB apartments in Boon Keng. The chief attraction of this development is its proximity to transportation (the Boon Keng MRT subway station), nice view of the City and just outside the City limits. But as someone pointed out, a newly wed couple with little savings in the CPF will be hard put to afford the price of these apartments, which ranges from S$500,000 to S$750,000. The loan repayment, assuming borrowings of 90% of the apartment price, will be staggering, as some Financial Consultants have warned. It wouldn't be a problem for foreigners who are flushed with cash, or middle-aged couples or families, but these latter parties are probably earning more than S$8,000 pm, making them ineligible on restriction number 1 listed above. While the sub-prime mortage phenomena is not likely to happen in Singapore, nobody can stop a person from spending beyond their means, until they find out that they can no longer service the loan. Remember that you may not always have a job and the economy will not always be booming.
Property analyst also warned that the upside is limited. From an investment perspective, one may not be able to resell the apartment for much more in 5 or even 10 years, making this a very bad property investment., particularly when cash not from the CPF is used.
But Singaporeans, they have this herd mentality and when the person next to you go in for the apartments, everybody else follows, like cows to the slaughter (it would be extremely insensitive of me to use pigs in that analogy). Already, the development is over-subscribed and it now becomes a luck of the draw if one gets to be mired in a huge debt for the next 25 to 30 years.
What a way to start the year with a hype.
11 comments :
A market subsidy is not a real subsidy. HDB is selling flats for $2-300K that only cost $50K to build.
Lemmings..perhaps a safer term?
Good luck to them I say!
Why are our government so successful in implimenting policies??? bcos there are these 'loyal singaporeans stayers' who support their policies....and latter end up with tons of debts...ya wat happen in the USA will not happen in Singapore....Ya if you lose your job, the gov and hdb will pay for your mortgage loan...so gracecious of them man....GOOD LUCK Buyers...
Hee, hee, my dear Epilogos, using cows to depict herd mentality is also insensitive as we have Hindus in our midst.
May I suggest chickens?
... bird-brain
... chasing after a few grains (not even big peanuts!)
... crowing and clucking
... but chicken-hearted when push comes to shove!!!
So scoffs The Pariah from
www.singaporeenbloc.blogspot.com
Looks like the blogger also belongs to the herd if he really believes that HDB flats are "heavily subsidized"...sigh
Market subsidy, as one poster already said, is not a real subsidy - it is at best a discount to the market value...
Subsidies should be made against the cost i.e. if they cost S$100k to make and they are selling it at only S$70k, then there is a real subsidy of S$30k...
Who stands to benefit most from all this hyping up of the price of flats? Not the buyers I am sure.
People with herd instinct never learn. This overhype market is not supportive in usual real estate trends. The quirks have through their policy created an artificial shortage by stopping to building 3 rooms flats and allow foreigners and prs including singles to hype up the market by driving up prices (together with the selective enbloc policy) Only clowns will fall for this overhype
it is the same with intellectual property. how is it that an actor can be paid millions for pretending to be someone over a cleaner only economists can pull a fast one on you.
well,that's how ridiculous wealth is created
Subsidy is word greatly misused in Singapore by the government. Unlike the Robin who rob the rich to help the poor, our goverment is RobinKenaHood because they rob everyone else except themselves to help the poor.
Robbing the poor to help the poor = Subsidy. Little did we know the greatest robbers lies in these tiny red dot, and these robbers live a safe luxury life. No other robbers like them.
My apologies to the Hindus among us when I use the cow as an analogy. May I suggest a 'swarm of mosquitoes' instead, who are intent on diving in for the kill but who are likely to be killed in the process.
Swat swat, pat pat...aieee...yah! Gotcha, you pests...
And hence the saying.. 'fools rush in'. LOL
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