MND Minister should decide HDB flats' prices, not Developers

[Dennis Ng]

I agree with the letter to the Straits Times Forum, written by a person named Patrick Tan, published on 21 Jun 2011.

HDB sold the land to developer under DBSS scheme. It is silly for HDB to have no control on what price developer can charge on this Special DBSS Scheme.

In addition, in my opinion, HDB is also silly to let prices of HDB resale flats to determine price of New HDB flats. Since prices of HDB Resale flats is again affected by prices of Mass Market Condos... the Minister of MND should regain control of property market instead of letting private developers dictating how prices are determined.

In my opinion, HDB should set price of New HDB flats in accordance to the Income and Affordability of people. eg. Price of a 5 room may be cannot exceed how many times the Median Monthly Income of S$5,000 to ensure that HDB is "fulfilling its Primary Mission of building affordable homes for majority of Singaporeans." Looks like after 51 years after being set up, HDB has lost sense of its main Mission.

This is the Mission of HDB as stated in its website:

Quote:
The Housing & Development Board (HDB) is Singapore's public housing authority and a statutory board under the Ministry of National Development.

Providing Affordable, Quality Homes

HDB plans and develops public housing towns that provide Singaporeans with quality homes and living environments. In this effort, HDB engages in active research and development work to ensure that cost-effectiveness and quality standards are maintained and continually improved upon.
End of Quote

Once the Minister of MND determines the prices of New HDB Flats, this will in turn affect the prices of Resale HDB flats, and this would then in turn affect the Prices of Condos in Singapore.

This is a simple way to "cool down" the Property Market, instead of announcing more and more rounds of Property Cooling Measures that may adversely affect those who genuinely need a new Home eg. those who want to upgrade their homes now being penalised by the 60% Max Financing....while a Rich guy owning 10 homes, all fully paid, if buy a Property now can get 80% financing...Isn't that weird?

You're penalising the Middle Class Singaporeans and letting the Rich to get 80% financing and letting Foreigners (who do NOT live in Singapore and has NO income from Singapore) to easily get 70% financing to speculate in properties if they do NOT have any Property in Singapore now.

So these Rich people and Foreigners then buy up properties in Singapore and bidding up the prices, and you then REACT by announcing more and more Property Cooling Measures, so you're BEHIND the Market, you're Reacting to what have already happened in the Market; That in my opinion, is NEITHER Wise NOR Effective.

In getting feedback, you cannot just listen to developers, they have a Vested Interests and what they feedback may be primarily for their own interests, you should listen to people who have NO vested interests in the Property Market, but listen selectively, since some people do NOT speak sense.

Cheers!

Dennis Ng

Below is extract of letter to Straits Times Forum written by a person name Patrick Tan published on 21 Jun 2010:

1. First, the land on which DBSS flats are built is Housing Board Land. Unless HDB has Profited from the Land Sale, the private developer must have Bought The Land At A Subsidised Rate.

2. Second, the flats sold are subject to the Same HDB Regulations. Therefore, for all intents and purposes, and in the mind of every ordinary Singaporean, those are just Better-Designed HDB flats.

*Is the land on which DBSS flats are built Not HDB Land and sold at a Subsidised Rate?

*Why would HDB allow a private developer to bid for land at a Subsidised Rate without any form of control on The Selling Price Of Flats built on that land?

*Is that not allowing the private developer to Profit At The Expense Of Ordinary Singaporeans?

*What is in it for HDB when the private developers Profit at the Expense of Ordinary Singaporeans? For a private developer to Buy the Land At A Subsidised Rate and then sell the property at Market Rate-That Is Gross Profiteering.

The Housing Board's mission is to build affordable housing for ordinary Singaporeans. For a major part of our history, it fulfilled its role well. But, over the past several years, it has completely lost its direction and purpose.
Young couples have to deter marriage because they are unable to get a flat and prices continue to skyrocket beyond the reach of ordinary Singaporeans. It is time for a change.

[wemakebread]

In my opinion, housing policy is the foundation of growth for Singapore.
That is why is it under Ministry of National Development.

I honestly think that whether and when people decide to marry, have children or even continue to stay in Singapore is affected to a large extent by housing policy. If affordability continues to be a challenge, then within say 10-15 years, Singapore will see a serious brain drain and the country as a whole will start to decline.

When MG(NS) Chan Chun Sing talks about the average survival age of small nations, I could agree with him that Singapore is indeed very fragile (and still is) and decline is not that far-fetched if we are not careful.

Now, many can point back at the "Stop at Two" policy as one of the reasons for the low birth rate. I would like to suggest our housing policy has a part to play as well.

I agree with the letter to the Straits Times Forum, written by a person named Patrick Tan, published on 21 Jun 2011.

HDB sold the land to developer under DBSS scheme. It is silly for HDB to have no control on what price developer can charge on this Special DBSS Scheme.

In addition, in my opinion, HDB is also silly to let prices of HDB resale flats to determine price of New HDB flats. Since prices of HDB Resale flats is again affected by prices of Mass Market Condos... the Minister of MND should regain control of property market instead of letting private developers dictating how prices are determined.

In my opinion, HDB should set price of New HDB flats in accordance to the Income and Affordability of people. eg. Price of a 5 room may be cannot exceed how many times the Median Monthly Income of S$5,000 to ensure that HDB is "fulfilling its Primary Mission of building affordable homes for majority of Singaporeans." Looks like after 51 years after being set up, HDB has lost sense of its main Mission.

[ngtfook]

May be this is a sign of property price heading south ...

DBSS prices slashed after uproar

After much public outrage, property developer Sim Lian Group last night announced that they are lowering the prices of its Design, Build and Sell Scheme (DBSS) flats at Centrale 8 in Tampines by up to $120,000.

The developer had earlier asked for $880,000 for the biggest 5-room flats for the units in Tampines. In a Straits Times report, it now says the 'confirmed price range' of its Centrale 8 units are as follows: three-room units now cost up to $445,000 - down from $510,000, four-room flats for $592,000, down from $683,000, and five-room units will now cost up to $778,000, or $663 psf.

Commenting on the backlash on the prices they announced last Thursday, it said that those prices were only 'indicative prices'.

The Straits Times reported that in a statement, the developer said: "It is regrettable that during the application period, the media and members of the public did not take note of our repeated public emphasis that the price range which we had announced was only an indicative price range, and would not be the final sale prices for the respective types of flat units."

Sim Lian's announcement of its 'confirmed price range' came in the heels of a letter from the Ministry of National Development to the Straits Times Forum page that it would be reviewing the DBSS as part of its overall review of housing prices.

The public outrage, with Singaporeans commenting on various forums and even sending letters to minister Khaw Boon Wan, had prompted the minister to write a blog post last Saturday, where he noted that the "negative reaction from the ground was not surprising". He also said that buyers can always choose not to buy, if they find the flats have been priced too high.

With its move to lower the prices, Sim Lian said it arrived at the confirmed price range by taking into account resale prices of HDB flats in the area, as well as other factors like proximity to the transport network, good public facilities, prevailing economic conditions, and other amenities.

To date, it is the first developer to set indicative prices during a DBSS launch, only to lower them by a considerable amount a week later.

[spezlezz]

I wonder if this is a publicity stunt

By getting a feel on the public sentiments and lowering the price a little, some potential buyers may feel it is cheaper now to buy that DBSS

It also create free marketing

[Jasper]

Right, I have the same thought in mind.
Look at those news covered in all newspaper, forums, media.
It is very worthwhile to reduce $880K to $770K, plus maybe they only have limited units fall under this range

[ngtfook]

On second thought, do you think this is a marketing gimmick? SimLian set the indicative price at $888K and now you can get it at $778, or 12% discount. Now you feel good and siok as you can safe $110K???

In the first place, the DBSS price is ridiculously off the roof. This is developer pricing strategy, as they know market sentiment is still positive and people will bite even though the price is damm bloody high.

So it is one choice in making purchase decision now or defer later as we all aware that the supply is exceeding demand in 2012-13. Price will heading south soon, very soon.

[ngtfook]

Property supply by Money Mind - CNA.
Dennis Ng had share this over supply issue couple months ago... so buyer beware.


http://info.channelnewsasia.com/videopl ... ayerType=3

[lop]

Straits Time reported MND minister in his blog said that Sim Lian profit margin for the DBSS flats in Tampines is 26%, excluding financing, marketing and administrative costs.

Hence, I agree with some people that MND should take ownership of future DBSS public flats and the prices could be lowered, without the additional costs and profit of private developers.

[lop]

FUTURE Design, Build and Sell Scheme (DBSS) lands sales have been suspended although it will be business as usual for those already sold last year, said National Development Minister Khaw Boon Wan in a response to public queries.

Cheers!

[jfoo2]

I feel that HDB is just trying to pass the problem to developer sometimes if there are unsold flats when they turn to private developers.

Unlike normal HDB flats, it is the developer problem whether or not those flats are offloaded. If HDB builds those flats at DBSS prices and the flats does not goes off the shelf, they will need to answer to AG.

This is a typical style of our govt agency. For example,instead of collecting rents directly from individual wet market stall owners or HDB shop owners previously, they now prefer to "outsource" to big time operators like Sheng Siong. This way, they "save" the problem of managing individual cases who owes arrears etc and yet unable to "evict" them. So when they raise rental, poor HDB dwellers like myself are forced to accept the price increases.

Same goes for the flats. HDB and SLA just pocket the profits and let developer do all the marketing and running of the show. In an exuberant market like today, of cos developers like Sim Lian would "chop" us.