Home ownership remains Singapore's "key social pillar," National Development Minister Khaw Boon Wan said on Wednesday, in a blog post marking the 50th anniversary of the Housing Board's 'Home Ownership for the People Scheme.'
He wrote in his blog: "We've come a long way since 12 February 1964.
Early estates such as Toa Payoh and Queenstown, with their distinctive long common corridors and flush toilets, may seem rather basic today, but they were considered very progressive in their time!
We have continued to be forward-looking in our HDB designs. As an example, all our new BTO projects will now include eco-features such as energy-saving lighting in common areas, and eco-pedestals in bathrooms which recycle water for flushing.
More important than just the hardware is the heartware - HDB estates are where Singaporeans build homes, start families and form strong bonds with their neighbours and communities. These are the lasting intangibles.
Today, home ownership remains our key social pillar. It gives Singaporeans a tangible stake in our country, financial security, and a critical sense of belonging.""
HDB indeed has a VERY critical mission to house our young while at the same time NOT burden them so much that they could not get on with the OTHER CRITICAL family building missions like having children (3 preferably), educating them to be citizens of capabilities and conscience, etc.
Lessons for me are:
1. it is FINE to have BTO developers to design so-called 'better and more advance' HDB flats for young Singaporeans. At the same time, it is important to make it 'affordable' and NOT a crippling financial burden for the young couples starting up their family!;
2. the 'affordability' ratio it seems had been fixed at 5x the average annual household family income. Assuming young couples after working for 2-3 years get hitched and married, they should be getting a total household income of, say, S$2,500/mth x2 x 12 months = S$60k/yr.
If a 3-room HDB BTO or whatever designs available is about S$300k. It is S$300k/S$60K = 5 years of combine yearly income of the household.
This is VERY affordable!
If we assume 50% of the annual household income is for raising the children till 12 years old, the 'new' annual household income available to pay for the HDB flat is: S$60k/yr/2 = S$30k/yr.
==> Affordability ratio is: S$300k/30k = 10 years. Still reasonable ASSUMING continuous employments and even WITHOUT any increment in salaries!
Of course, we need to bring in the mortgage payment and this MAY double the amount eventually paid for the S$300k HDB flat to S$600k. This may means the number of years to pay off and OWN the HDB flat is: 20 years. Again, about right for MOST average HDB flat owners. BUT it means 20 years of continuous employment. NOT an easy feat to achieve if you are average HDB flat owners.
Can we lower the HDB price further to be 'truly' affordable? i.e. fully paid in 10 years time regardless? The 'de-coupling' of the new HDB flats' prices from the HDB resales price was a big and significant breakthrough by government thinking. More 'out-of-box' thinking required?
3. The HDB Resales market is STILL a monster created by the 'appreciating assets' mantra by the government that need a solution. It is NOW the primary source of 'retirement income or security' for the many first generation HDB owners. Reversed mortgage. Renting out excess rooms to foreigners (FWs or FTs). Selling the HDB flat and hopefully able to manage the 'windfall' till end of life.
Singapore is STILL young. Only 49 years old. The first generation HDB flats were re-developed and their 99-year lease were EXTENDED by the government. So, we don't have a case of a HDB estates nearing 60 years when its resale values will be uncertain depending ON if the financial institutions want to, or being mandated by laws that they must, provide finance to resales buyers!
IF NOT, what are to become of the VERY OLD with a 'depreciating old' HDB assets? Ask for their children to be filial and take care of them? This will NOT be an issue if the children are doing well. What about those who are already struggling to make ends meet in building their own 3-kid family as encouraged by the government to 'pro-create' and 're-stock' Singapore's population!
All said: HDB is for the young and must be truly affordable. Private properties are for those who can afford and be subject to 'free market forces' TOTALLY. Speculators and investors are welcome there. BUT NOT the HDB public housing market! Period!!
HDB housing MUST be a Social Pillar and NOT a 'Social Destructor of ordinary HDB buyers'!! :-)
He wrote in his blog: "We've come a long way since 12 February 1964.
Early estates such as Toa Payoh and Queenstown, with their distinctive long common corridors and flush toilets, may seem rather basic today, but they were considered very progressive in their time!
We have continued to be forward-looking in our HDB designs. As an example, all our new BTO projects will now include eco-features such as energy-saving lighting in common areas, and eco-pedestals in bathrooms which recycle water for flushing.
More important than just the hardware is the heartware - HDB estates are where Singaporeans build homes, start families and form strong bonds with their neighbours and communities. These are the lasting intangibles.
Today, home ownership remains our key social pillar. It gives Singaporeans a tangible stake in our country, financial security, and a critical sense of belonging.""
HDB indeed has a VERY critical mission to house our young while at the same time NOT burden them so much that they could not get on with the OTHER CRITICAL family building missions like having children (3 preferably), educating them to be citizens of capabilities and conscience, etc.
Lessons for me are:
1. it is FINE to have BTO developers to design so-called 'better and more advance' HDB flats for young Singaporeans. At the same time, it is important to make it 'affordable' and NOT a crippling financial burden for the young couples starting up their family!;
2. the 'affordability' ratio it seems had been fixed at 5x the average annual household family income. Assuming young couples after working for 2-3 years get hitched and married, they should be getting a total household income of, say, S$2,500/mth x2 x 12 months = S$60k/yr.
If a 3-room HDB BTO or whatever designs available is about S$300k. It is S$300k/S$60K = 5 years of combine yearly income of the household.
This is VERY affordable!
If we assume 50% of the annual household income is for raising the children till 12 years old, the 'new' annual household income available to pay for the HDB flat is: S$60k/yr/2 = S$30k/yr.
==> Affordability ratio is: S$300k/30k = 10 years. Still reasonable ASSUMING continuous employments and even WITHOUT any increment in salaries!
Of course, we need to bring in the mortgage payment and this MAY double the amount eventually paid for the S$300k HDB flat to S$600k. This may means the number of years to pay off and OWN the HDB flat is: 20 years. Again, about right for MOST average HDB flat owners. BUT it means 20 years of continuous employment. NOT an easy feat to achieve if you are average HDB flat owners.
Can we lower the HDB price further to be 'truly' affordable? i.e. fully paid in 10 years time regardless? The 'de-coupling' of the new HDB flats' prices from the HDB resales price was a big and significant breakthrough by government thinking. More 'out-of-box' thinking required?
3. The HDB Resales market is STILL a monster created by the 'appreciating assets' mantra by the government that need a solution. It is NOW the primary source of 'retirement income or security' for the many first generation HDB owners. Reversed mortgage. Renting out excess rooms to foreigners (FWs or FTs). Selling the HDB flat and hopefully able to manage the 'windfall' till end of life.
Singapore is STILL young. Only 49 years old. The first generation HDB flats were re-developed and their 99-year lease were EXTENDED by the government. So, we don't have a case of a HDB estates nearing 60 years when its resale values will be uncertain depending ON if the financial institutions want to, or being mandated by laws that they must, provide finance to resales buyers!
IF NOT, what are to become of the VERY OLD with a 'depreciating old' HDB assets? Ask for their children to be filial and take care of them? This will NOT be an issue if the children are doing well. What about those who are already struggling to make ends meet in building their own 3-kid family as encouraged by the government to 'pro-create' and 're-stock' Singapore's population!
All said: HDB is for the young and must be truly affordable. Private properties are for those who can afford and be subject to 'free market forces' TOTALLY. Speculators and investors are welcome there. BUT NOT the HDB public housing market! Period!!
HDB housing MUST be a Social Pillar and NOT a 'Social Destructor of ordinary HDB buyers'!! :-)
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