How much shd i bid for COV
- Thread starter bedokboy
- Start date
pple tend to forget to look at the age, but see only the flat. anything more than 30yrs, we should consider more intensely.
u might like to know that the 'most expensive' estate in strathmore area of queenstown costs u 20-30k more and was is 20yrs younger, built in 1993/6 onwards... i'm excluding forfar heights.
u might like to know that the 'most expensive' estate in strathmore area of queenstown costs u 20-30k more and was is 20yrs younger, built in 1993/6 onwards... i'm excluding forfar heights.
sgbabydoll
Active Member
Powder, believe Bedokboy only wants to live in the east lah. So, even if Strathmore is cheaper he probably won't buy there.
miloice
Well-Known Member
I got a pretty old block. Most were advising me against getting something older than 30 yrs. But, I love that neighborhood. Its where I grow up. And the amt I paid for is a steal. $15k below evaluation back in 2004 and with 40k grant for being in the same neighborhood as my mum's place. Now, I can rent it out and probably make some good returns. I did the math, the ROI annually is 12% the amt I paid for the place. I'm not going to sell this golden goose even if its value triples.
doll,
yup - purpose Isn't to ask him shift to buying queenstown area, i know he wants to stay east, am giving him a comparison with the most expensive estate at present moment... which happens to be strathmore... which costs 20-30k more and is younger by a good 20yrs.
Only when u place them side by side, are u able to make an informed decision. it is to tell him that he is paying a price which i would not consider as reasonable... not at all. But since emotions and x-factor issues are involved, it's OK.
finding a home isn't easy. wat makes it easy is the willingness to Pay... and since we are Paying, we better not add some weird-ass Element of Hope that we can eventually sell at a higher price, or have capital gains... becos the HDB will turn 40 when he completes his 5yr MOP. we also dun bank on SERS for any renewal.
so basically i'm being the cold water.
it's the same when i bought my place... it is cheap, but in the long run i see myself losing 200-300k after 5yrs... but becos i see it as a Home, it doesn't matter to me. i have no illusions that i will make money from my current place... i bought a home, not to make money. i'm just passing on the same mindset...
ps: since we're HERE, we might as well share our honest opinions and learn together... than to say good things to each other.
yup - purpose Isn't to ask him shift to buying queenstown area, i know he wants to stay east, am giving him a comparison with the most expensive estate at present moment... which happens to be strathmore... which costs 20-30k more and is younger by a good 20yrs.
Only when u place them side by side, are u able to make an informed decision. it is to tell him that he is paying a price which i would not consider as reasonable... not at all. But since emotions and x-factor issues are involved, it's OK.
finding a home isn't easy. wat makes it easy is the willingness to Pay... and since we are Paying, we better not add some weird-ass Element of Hope that we can eventually sell at a higher price, or have capital gains... becos the HDB will turn 40 when he completes his 5yr MOP. we also dun bank on SERS for any renewal.
so basically i'm being the cold water.
it's the same when i bought my place... it is cheap, but in the long run i see myself losing 200-300k after 5yrs... but becos i see it as a Home, it doesn't matter to me. i have no illusions that i will make money from my current place... i bought a home, not to make money. i'm just passing on the same mindset...
ps: since we're HERE, we might as well share our honest opinions and learn together... than to say good things to each other.
in today's yahoo... on buying or renting. http://sg.yfittopostblog.com/2010/09/13/should-you-buy-or-rent/
There are many reasons to get old flats - of course for the familiar feeling and surroundings that we are so used to - we have to pay a premium.
The other reason is of course for SERS but in this aspect, the location is important. It has to be close to MRT stations or potential-MRT stations.
On the other hand, people are also so hung-up on the place.. like die-die must stay in the East or particular location. It is not wrong to have this type of wants... but like what powder said - you have to pay a premium for something you like. But ask yourself, why you like the place? Other than for nostalgic reasons, there should be other equally attractive place to live in.
I have lived in the central (chinatown & queenstown), west (clementi, west coast), north-west, north, north-east and I am more like a nomad.
Old estates are good and convenient but some of them the traffic are bad and they can be very noisy.
Actually, the new estates are fine as well - only thing is of course you won't get all the nice food that is available in the older estate. But with a car, there is not much of a problem.
Some of the newer estates (like punggol) is so quiet.
For me, in terms of living.. I would like people to think and step-out of their comfort zone. What you are familiar with and comfortable with may not be always the best.
The other reason is of course for SERS but in this aspect, the location is important. It has to be close to MRT stations or potential-MRT stations.
On the other hand, people are also so hung-up on the place.. like die-die must stay in the East or particular location. It is not wrong to have this type of wants... but like what powder said - you have to pay a premium for something you like. But ask yourself, why you like the place? Other than for nostalgic reasons, there should be other equally attractive place to live in.
I have lived in the central (chinatown & queenstown), west (clementi, west coast), north-west, north, north-east and I am more like a nomad.
Old estates are good and convenient but some of them the traffic are bad and they can be very noisy.
Actually, the new estates are fine as well - only thing is of course you won't get all the nice food that is available in the older estate. But with a car, there is not much of a problem.
Some of the newer estates (like punggol) is so quiet.
For me, in terms of living.. I would like people to think and step-out of their comfort zone. What you are familiar with and comfortable with may not be always the best.
sgbabydoll
Active Member
Powder, the lowest transacted price of 4room resale in Strathmore isn't just "$20-30K more", but of course the age is good being only about 15 years old.
Anyway, I heard on the radio news that cov is expected to drop 20-30% by this year.
Rental may rise since many PRs who have overseas property cannot buy reslae HDBs?
Anyway, I heard on the radio news that cov is expected to drop 20-30% by this year.
Rental may rise since many PRs who have overseas property cannot buy reslae HDBs?
20-30k more is based on wat i'm hearing on the latest in prices expected on the 85sqm 4rms in blk 55-60. correction, apparently the lease is 2000-2002, so it's younger.
yup i agree that most are asking for 50-60k more over the Haig one. but this remains asking, unnegotiated... u have alot of leverage now after the measures. and of cos, 50k for 25yrs younger... is only 2k per year. i'm just putting it into perspective... it's only extra $200+ a mth. i have already stated that to buy now might not be the wisest choice in terms of timing.
ps: am just trying to put the current purchase into perspective.
yup i agree that most are asking for 50-60k more over the Haig one. but this remains asking, unnegotiated... u have alot of leverage now after the measures. and of cos, 50k for 25yrs younger... is only 2k per year. i'm just putting it into perspective... it's only extra $200+ a mth. i have already stated that to buy now might not be the wisest choice in terms of timing.
ps: am just trying to put the current purchase into perspective.
sgbabydoll
Active Member
Powder, it is more than a mere 20-30K more. HDB website has the info. Nevertheless, I got what you mean about timing. Do you think the measure will be able to cool the market to see COV drop by 20-30% by this year?
COV down by 20-30%? i dun think so... no way in fact. it is like saying that sporeans will be less greedy... haha.
the mindset won't be one whereby pple will be willing to settle for less, but they may ask for More becos they have to find another place to stay in-between... or they may never own another HDB there-after.
i go by basis of Greed n typical local behaviour first... kiasuism is a big factor in many things local.
so i think it'll stay the same or move higher, until mid-2011.
it might seem contradictory, but the 20-30k more was based what i personally feel i can get. Negotiations is very impt and u need to narrow and do your homework... u won't get good deals handed over to u on the plate.
the mindset won't be one whereby pple will be willing to settle for less, but they may ask for More becos they have to find another place to stay in-between... or they may never own another HDB there-after.
i go by basis of Greed n typical local behaviour first... kiasuism is a big factor in many things local.
so i think it'll stay the same or move higher, until mid-2011.
it might seem contradictory, but the 20-30k more was based what i personally feel i can get. Negotiations is very impt and u need to narrow and do your homework... u won't get good deals handed over to u on the plate.
sgbabydoll
Active Member
Public housing slightly different because you don't expect people to sell below valuation when they can easily refer to HDB website for transacted price info.
Agree with you on your theory about greed.
Agree with you on your theory about greed.
it's not all that different. the market is the market... price adjusts up and down based on the other factors. the HDB websites give u nothing about facing, view, afternoon sun, reno works done, quality of reno, condition of house, desperation of buyer/seller, whether it is relative to relative purchase etc...
these are the many factors u can leverage on. most times, pple just leave it to the agent.
these are the many factors u can leverage on. most times, pple just leave it to the agent.
sgbabydoll
Active Member
This is how sellers determine their price, based on valuation report, COV market price and last transacted price in your estate. I am not saying that this is a logical method but this is how things are today. Yes, we don't have to succumb to over priced COV as buyers. We have a choice.
COV would surely drop in the long run. Govt would ensure that. The sustainable figure should be around 5-10k. If you can wait for that long. Then do so.
In principle, cov which is key to appreciation of property price cannot exceed GDP. Otherwise it would exceed the 30% household income affordability. And govt have tools to control that is limited. Thus they need to control the cov growth. This they would ensure, unless they lost power.
HDB price will never ever drop though.
In principle, cov which is key to appreciation of property price cannot exceed GDP. Otherwise it would exceed the 30% household income affordability. And govt have tools to control that is limited. Thus they need to control the cov growth. This they would ensure, unless they lost power.
HDB price will never ever drop though.
sgbabydoll
Active Member
Powder, can negotiate COV but not valuation.
doll,
i believe the negotiation is on the price. definitely, valuation is involved, sometimes only AFTER the price is agreed. the HDB resale prices reflects prices that are Inclusive of COV. in current mkt, COVs are a good 10-50k abv valuation... there's enough meat there to negotiate a better price. And if u take into account that u can push for valuation or below in the near future, then even more room to negotiate. personally i dun think the COV is gonna come off that soon... the flavour of my post was specific to bedok's current choice to bite the bullet.
HDBs can be bought abv or below valuation...
i believe the negotiation is on the price. definitely, valuation is involved, sometimes only AFTER the price is agreed. the HDB resale prices reflects prices that are Inclusive of COV. in current mkt, COVs are a good 10-50k abv valuation... there's enough meat there to negotiate a better price. And if u take into account that u can push for valuation or below in the near future, then even more room to negotiate. personally i dun think the COV is gonna come off that soon... the flavour of my post was specific to bedok's current choice to bite the bullet.
HDBs can be bought abv or below valuation...
"In principle, cov which is key to appreciation of property price cannot exceed GDP."
This statement is already flawed.
Firstly, COV is NOT KEY to appreciation of property price. COV is just one component of the price. Property prices can appreciate without COV increasing correspondingly. COV, when it is excessive is mostly about greed and the ability of the buyer to meet that greed.
Of course increase in prices of property has to be in line with general GDP growth.. if we are not producing more or making more, how can we afford more expensive home?
This statement is already flawed.
Firstly, COV is NOT KEY to appreciation of property price. COV is just one component of the price. Property prices can appreciate without COV increasing correspondingly. COV, when it is excessive is mostly about greed and the ability of the buyer to meet that greed.
Of course increase in prices of property has to be in line with general GDP growth.. if we are not producing more or making more, how can we afford more expensive home?
Is economics.
GDP is also an indicator of income growth. Though it does not address income distribution.
As long as GDP grow, then in principle, HDB price can appreciate while still remain affordable within the 30% of monthly household income for installment.
To address the income distribution, govt would collect data and build different flat types accordingly (5room, 4room etc) for each group.
This is also the reason why our MM LKY say as long as GDP grow, flat price will continue to grow as long as they r in power.
30k COV is not sustainable as it outgrow our GDP. Govt will push it down for sure (the question is how long they will take to do it).
Everything is precision engineered in Sg. Our country is run by economists
GDP is also an indicator of income growth. Though it does not address income distribution.
As long as GDP grow, then in principle, HDB price can appreciate while still remain affordable within the 30% of monthly household income for installment.
To address the income distribution, govt would collect data and build different flat types accordingly (5room, 4room etc) for each group.
This is also the reason why our MM LKY say as long as GDP grow, flat price will continue to grow as long as they r in power.
30k COV is not sustainable as it outgrow our GDP. Govt will push it down for sure (the question is how long they will take to do it).
Everything is precision engineered in Sg. Our country is run by economists
SM
valuation report alone does not appreciate a property value.
Each month, valuator look into the latest transaction price (which include the COV) for similar property (they have a few predictor which they compare with) and factor it into the next valuation. That is how property appreciate.
valuation report alone does not appreciate a property value.
Each month, valuator look into the latest transaction price (which include the COV) for similar property (they have a few predictor which they compare with) and factor it into the next valuation. That is how property appreciate.
is it possible for GDP to remain constant while HDB prices run up?
because HDB, being transacted among singaporeans, left pocket right pocket, no net increase in national wealth?
but HDB prices run up as a matter of inflation?
such that proportion of income spent on housing as a % of inflation-adjusted GDP remains constant, even though HDB prices are rising?
such that a couple earning S$8,000 has the same purchasing power as a couple earning S$6,000 15 years ago?
how about that?
anyone care to comment on my theory?
because HDB, being transacted among singaporeans, left pocket right pocket, no net increase in national wealth?
but HDB prices run up as a matter of inflation?
such that proportion of income spent on housing as a % of inflation-adjusted GDP remains constant, even though HDB prices are rising?
such that a couple earning S$8,000 has the same purchasing power as a couple earning S$6,000 15 years ago?
how about that?
anyone care to comment on my theory?
COV is just a component of the price.
Why is 30K (an arbitrary figure) not sustainable? Based on what? And why is 10K (another arbitrary figure) sustainable? How do you determine 30K outgrow economy?
We should be talking about % of purchase / valuation price.. and not fixed amount.
30K 10 years ago is different from 30 years 10 years from now. Using 30K a fixed figure is already seriously flawed.
Why is 30K (an arbitrary figure) not sustainable? Based on what? And why is 10K (another arbitrary figure) sustainable? How do you determine 30K outgrow economy?
We should be talking about % of purchase / valuation price.. and not fixed amount.
30K 10 years ago is different from 30 years 10 years from now. Using 30K a fixed figure is already seriously flawed.
HDB will continue to move upwards.. not only because of SG but because of foreigners.. but the latest measure will make it more difficult for foreigners..
Sg basically land scarce.. good locations - locations near to MRT and amenities will continue to appreciate faster than other location.
Sg basically land scarce.. good locations - locations near to MRT and amenities will continue to appreciate faster than other location.
stanzza,
No one is saying valuation "appreciate" the property. It is common sense... Valuation is just a fair report on the "value" of the property based on similar transactions (type, location, etc) in recent times.
Whether property price goes up or down - basic economics - supply and demand..
No one is saying valuation "appreciate" the property. It is common sense... Valuation is just a fair report on the "value" of the property based on similar transactions (type, location, etc) in recent times.
Whether property price goes up or down - basic economics - supply and demand..
May
yes that is possible and is the case now. Thus it needs to be addressed.
Govt direction is to protect the wealth of citizens though, so property must appreciate rather than depreciate. This is to become one of the source of wealth that goes to each's retirement nest (and give govt less problem in future).
By keep pushing for GDP growth, hdb would always remain affordable to youngster. So in time to come, the new generation would take over the hdb of older generation. New generation-can afford it. Old generation-can downgrade or unlock retirement fund.
It is a free solution. HDB forms a very impt part (not completed) of govt strategy for retirement (rem we have no social security system here).
A overly inflated HDB is very damaging on the economy. 35% is the international benchmark. Singapore adopted 30%. There are ways to stretch it such as giving out longer loans. But you could only stretch so much. Thus, the best method is still to control the price growth.
yes that is possible and is the case now. Thus it needs to be addressed.
Govt direction is to protect the wealth of citizens though, so property must appreciate rather than depreciate. This is to become one of the source of wealth that goes to each's retirement nest (and give govt less problem in future).
By keep pushing for GDP growth, hdb would always remain affordable to youngster. So in time to come, the new generation would take over the hdb of older generation. New generation-can afford it. Old generation-can downgrade or unlock retirement fund.
It is a free solution. HDB forms a very impt part (not completed) of govt strategy for retirement (rem we have no social security system here).
A overly inflated HDB is very damaging on the economy. 35% is the international benchmark. Singapore adopted 30%. There are ways to stretch it such as giving out longer loans. But you could only stretch so much. Thus, the best method is still to control the price growth.
miloice
Well-Known Member
"free market forces are at work."
its not a free market. The demand and supply is controlled by the government. They clearly know the amount of FT coming in and they need accomodation and are cash rich. Yet, HDB is providing insufficient supply to meet the expected increase in demand.
Naturally, the pricing is going up. Just with your COE and car pricing. You cut the supply knowing the demand is increasing. With lesser volume, ASP will increase, margin per unit has to increase to cover the operating costs. The COE went up by around 25k. But car pricing has risen more than that.
its not a free market. The demand and supply is controlled by the government. They clearly know the amount of FT coming in and they need accomodation and are cash rich. Yet, HDB is providing insufficient supply to meet the expected increase in demand.
Naturally, the pricing is going up. Just with your COE and car pricing. You cut the supply knowing the demand is increasing. With lesser volume, ASP will increase, margin per unit has to increase to cover the operating costs. The COE went up by around 25k. But car pricing has risen more than that.
May
"such that proportion of income spent on housing as a % of inflation-adjusted GDP remains constant, even though HDB prices are rising?"
This part I think is not possible. Inflation is measured by CPI (consumer price index. Property ownership is included in this, measured by annual value which is fair RENTAL price (strangely))
If income growth which is GDP remain constant, it is not possible for % for monthly to remain constant while property price rises, given all other factors being the same.
I say other factor, because what u mention could happen, if govt starts to give out longer loan terms. This create money into the economy and causes inflation to raised, while keeping monthly repayment % the same.
"such that proportion of income spent on housing as a % of inflation-adjusted GDP remains constant, even though HDB prices are rising?"
This part I think is not possible. Inflation is measured by CPI (consumer price index. Property ownership is included in this, measured by annual value which is fair RENTAL price (strangely))
If income growth which is GDP remain constant, it is not possible for % for monthly to remain constant while property price rises, given all other factors being the same.
I say other factor, because what u mention could happen, if govt starts to give out longer loan terms. This create money into the economy and causes inflation to raised, while keeping monthly repayment % the same.
Based on what I am seeing, the pricing impact is more of FT.
Years back, the supply of HDB even more limited.. but there are not many FT or mostly they are the high-end type buying private. HDB price increase are more gradual. People just wait longer for their flats.. and they stay with parents/in-laws.
Based on latest stats - yes it would seem supply is not enough.. But GOVT is not all that transparent. Yes GOV knows how many FTs coming in (immigration) but that does not translate into planning for housing automatically. There will always be a lack.. Gov is recognizing this and has promised to increase the supply.
Moreover, more and more SG are owning more than 1 property.. - this is not very common 10 years ago. It create additional demands..
It is very complex and not so simplistic. But the latest actions by govt are probably in the right direction and it is about time.
Years back, the supply of HDB even more limited.. but there are not many FT or mostly they are the high-end type buying private. HDB price increase are more gradual. People just wait longer for their flats.. and they stay with parents/in-laws.
Based on latest stats - yes it would seem supply is not enough.. But GOVT is not all that transparent. Yes GOV knows how many FTs coming in (immigration) but that does not translate into planning for housing automatically. There will always be a lack.. Gov is recognizing this and has promised to increase the supply.
Moreover, more and more SG are owning more than 1 property.. - this is not very common 10 years ago. It create additional demands..
It is very complex and not so simplistic. But the latest actions by govt are probably in the right direction and it is about time.
miloice
Well-Known Member
May, check this out ...
http://www.temasekreview.com/2010/09/08/pap-responds-to-dr-chee-soon-juan-on-6-5-million-population-target/
Disclaimer : I'm no way promoting the site for any agenda whatsoever. I just find the article interesting presenting information we will not find in our press.
http://www.temasekreview.com/2010/09/08/pap-responds-to-dr-chee-soon-juan-on-6-5-million-population-target/
Disclaimer : I'm no way promoting the site for any agenda whatsoever. I just find the article interesting presenting information we will not find in our press.
I think our gahmen really made a wrong move in encouraging so many FTs to come here to SG to work and set up homes.
Ended up we locals even have to slug it out with them for queue numbers for a roof over our heads. I donated a total of $60 to HDB, not once did my queue number not exceed 3 digit figures.
Ended up we locals even have to slug it out with them for queue numbers for a roof over our heads. I donated a total of $60 to HDB, not once did my queue number not exceed 3 digit figures.
Milo,
Yes. This is my view. I seen it many years back.. when my HK colleagues migrated to SG. We went to view some apartment and he whipped out his check book immediately - they are cash rich for sure and SG is relative cheap for them.
The same for some of my Indonesian friends.
But you can't actually project correctly as a lot of foreign workers are staying in dormitory. That being said, they should have done a more detail projection and anticipated the increase in demand for HDB re-sale.
I think the gov realises this - only that they won't admit it openly.
Yes. This is my view. I seen it many years back.. when my HK colleagues migrated to SG. We went to view some apartment and he whipped out his check book immediately - they are cash rich for sure and SG is relative cheap for them.
The same for some of my Indonesian friends.
But you can't actually project correctly as a lot of foreign workers are staying in dormitory. That being said, they should have done a more detail projection and anticipated the increase in demand for HDB re-sale.
I think the gov realises this - only that they won't admit it openly.
Don't forget about HDB grant you obtained from govt which FT don't qualify. They have to pay more than you in the event of 1st home. So that even the ground a bit where comparison of buying power between local and FT.
As for 2nd flat, if price raises, you would have got the money anyway so 2nd grant not necessary.
As for 2nd flat, if price raises, you would have got the money anyway so 2nd grant not necessary.
sm,
yes I agree with u that we can't do w/o them totally...but didn't they foresee all these problems will come out once they keep granting them PRs/citizenships? surely they will need a place to stay also right? then how about us locals?
put yourself in my shoes and you will understand my frustration.
stanzza, some of them are so cash rich that they don't even need the grant. u can't compare them with us locals.
yes I agree with u that we can't do w/o them totally...but didn't they foresee all these problems will come out once they keep granting them PRs/citizenships? surely they will need a place to stay also right? then how about us locals?
put yourself in my shoes and you will understand my frustration.
stanzza, some of them are so cash rich that they don't even need the grant. u can't compare them with us locals.
Thomas,
don't discount the effect of many Singaporeans having more than 1 property.
Personally I know of many people.. bought HDB then rent out at 2k+ to FTs while they continue to stay with parents/in-laws.
Some have HDB + private..
But as I said, better anticipation and planning is needed.. but that is about all. Can complain till the cow comes home, at the end, who are the greedy Singaporeans asking for high COV or keep wanting to sell high but complain when prices are high.
The new entrants to the market are handicap to a certain extent - and that is where I think the gov can do more.. speeding out new flats for new entrants to the markent.
For those already in the market - they are benefiting from the higher prices as well. Without FT pushing up the prices, you think they are happy?
don't discount the effect of many Singaporeans having more than 1 property.
Personally I know of many people.. bought HDB then rent out at 2k+ to FTs while they continue to stay with parents/in-laws.
Some have HDB + private..
But as I said, better anticipation and planning is needed.. but that is about all. Can complain till the cow comes home, at the end, who are the greedy Singaporeans asking for high COV or keep wanting to sell high but complain when prices are high.
The new entrants to the market are handicap to a certain extent - and that is where I think the gov can do more.. speeding out new flats for new entrants to the markent.
For those already in the market - they are benefiting from the higher prices as well. Without FT pushing up the prices, you think they are happy?