On Gerald's point that people will price in the 6% clawback into the selling price of the HDB.. I don't think its so simple. There is a income limit of 14k for resale buyers of Prime locations... means we are not gonna get 1 million dollar HDBs anymore since 14k income limit can only loan 700k+
Good point on the income limit meaning there's a lot of cash that's needed! Only time will tell truly what will happen. Based on what I was taught on the consumer psychology of property, there is inclination to avoid loss, and I bought at say the max price for my property. I will die die refuse to sell at a loss after factoring the clawback. So if I am a buyer that bought at 900k plus 6% clawback, it will take a lot to convince me to sell it at say 800k or even at 900k to incur a 60k loss. But 300k cash is really expensive too... at that point makes more sense to get a condo. It'll be interesting to see which force will be stronger once the first batch of prime location MOP-ed! The restrictions are indeed quite harsh but then again a lot of Singaporean have lui in their bank accounts too!
My pov is starting salary has matched or increased faster than the growth of BTO price. Its the resale market, that one is market forces of greed and fear
@@JOSHTANLIVE Been a average salaryman myself, I find that this isn't the full picture. It is true that new jobs with higher average salary are created by IT and automation, which helps to push up the statistic. However IT and automation also replaces more traditional jobs (some higher and some lower pay). I can understand the need for foreigners to enter and become citizens, but I think that government failed to fine tune the details of the policy and manage the rate of inflow well, causing resale HDB place to increase too fast.
@@JOSHTANLIVE Been a local born around 1989 is tough, first it is not easy to find a good partner during the mid 20s period as many Sg girls are very picky and judge by surface. Thus I cant buy BTO or resale flat when the prices are still reasonable around 9 years ago although I was working that time and contributed to Singapore economy. I am married now, whereby the HDB price is already inflated quite a lot. Yes BTO price is not inflated as much as resale but need to ballot. The govt HDB policy is like to lure people to marry early, if not one will have to eat the higher housing cost in the future. Is very unfair as not all Singaporeans can marry early and/or get good jobs with around 4 to 6k salary or able to work without stopping. I was forced to stop for 5 months till now due to family issue. I have been looking into re-study and re-training to another sector, however it takes times and money also. I also need to put in time and resources for my family. Everything needs money nowadays and prices are high, situation is really tight and hard to make adjustment even if one is willing to.
The policy of allowing Single to only buy HDB at 35 years old is a very unfair and hypocritical policy. Is like using the 'buy HDB early for financial gain' factor as a lure for people to get marry early for materialistic gain.
The suay ones are the folks that currently stays at prime or plus area, then Kenna SERS en-bloc . Kinda the force into prime / plus living. Rental restrictik. 😢
Well Josh was sharing with me in the past, MOPs were shorter, then people got used to it (like it became the norm) and property prices still continue to rise... Now it looks like people need to get used to 10 years MOP, and when we do, prices will continue rising againhaha
Just wondering since by the time Standard flats kicks in place where the government pushes for a lot of BTOs (2021-2025), won’t there be an oversupply of flats to sell by then? This might cause the BTO owners to have lesser profit (bear run) than projected if they plan to sell right away after MOP. Will Plus and Prime be better in that case since they tends to appreciate better in a longer run (ROI) with maybe better primary school and MRTs?
10 years mop and subsidy clawback is not going to help much, its like kicking the problem down the road further. 10 years later, subsidy clawback is only a scratch on their massive profits, unless the government change to percentage based tax on profit. Lottery effect is still there
If people can not upgrade to profit from the house, the condo will be out of reach to the majority, and only those who have money can buy. LIKE OWNING CARS😢😢😢😢😢😢
Commercial property :D no funny restrictions and additional stamp duties. I think profiting off government subsidized residential property is quite a touchy subject because it's like using other people's tax money for your own personal gain at the detriment of a genuine buyer just trying to get a shelter but are priced out.
But from another perspective, if upgraders profit reduces significantly then they can no longer support the current high condo prices right? So eventually the condo prices will have to come down especially in OCR locations where the main demand comes from BTO upgraders. The HDB and condo price gap will not widen significantly because if that happens buyer will rather buy central HDB as it's cheaper and more convenient than condo, so it's like a swinging pendulum if you push one side excessively it just gets shifted to the other side but total energy (demand) remains constant.
In the same 14 years period, private property could be flipped for at least 4 times based on sale upon third year to avoid stamp duty. But the happiest people in this scenario would be the property agents earning 4 times commission hence I think eventually people will want to settle down as shifting one's primary residence is a hassle. Therefore if a property has good annual ROI I would actually stay put instead of constant flipping.
Open market makes prices go WILD because it is all about PROFIT. what is the point of owning a good condo and can not liquidity with huge profits😢😢😢😢😢😢😢😢😢😢.
The first owner will definitely not be able to rent out the entire unit, but for subsequent resale buyers they are likely able to do so since the subsidy clawback and 10 years MOP also do not apply to resale buyers.
If BTO offerings under PRIME continue to be limited to 4-rooms & smaller flats, the new measure will just drive those resale 5-rooms & larger flats in choicest locations to much higher prices. Demand for larger flats are just increasing as evident in the application rate of such flats in past BTO launches, even in those outlying areas. HDB should just stop building so many 2 or 3-rooms in PRIME area because the market demand is for 4-rooms & bigger flats.
By then the resale 5rms will be even older, would that itself sway buyers to smaller newer ones? HDB definitely aware of demand of 4rm. 3rd is maybe to give a smaller quantum option to the population?
These longer MOP & higher restrictions for the PRIME BTO flats would just mitigate the lease decay impact of older flats in the central area. The 10-yrs MOP & the average waiting time of 4 yrs would mean that such PRIME flats would only have a balance of ard 85 yrs when they can be sold in resale market. This coupled with the subsidy clawback from sellers & income ceiling for potential buyers would affect the pricing feasibility of such PRIME flats.
Because 5 room BTO in Prime locations were the initial catalyst of million dollar HDB due to high psf of Prime locations (example over $1K/psf for Pinnacle Duxton), so govt stopped selling it. In other words, Prime location psf even 4 room size is already transacted for a million dollars so imagine for 5 room size that's the reason why there are HDB in Prime locations transacted for $1.5M. So it's not a matter of demand, yes majority prefers 5 room but due to the high psf of Prime locations the govt cannot continue to build it due to political sensitivity.
Government housing is for staying long term and should not be used for flipping. While we may celebrate the profit we earn from selling our flat but our future generation will suffer like Hong Kong. Do we want to spend millions of dollars sitting on a 99 years lease? The money can be made better use to invest for retirement or enjoy for food or travel. This is already a poison that cannot be resolved.
People that managed to marry early and buy HDB early transfer the cost of inflation and speculation to those that qualify to buy later through resale market.
Would it more relevant to invite expert on the subject or a person who has more convincing in investing to talk about this? Just my 2 cents of thoughts 🙏🏻
If subsidy clawback becomes included in eventual resale prices (hence net zero effect) and MOP increases to 10 years, that makes it easier to eventually upgrade since the owners (assuming no differences to lifestyle and spending), would have more time to accumulate a larger cash hoard by the end of the 10 yr MOP and hence more purchasing power?
@@evoxpress on an absolute basis yes since quantum is very different but don't forget that its also about leverage. With more capital (from additional years of savings) you can borrow 3x to afford more too (income permitting that is)
The main issue with 10 years MOP is the age factor, typically people's ability to leverage on loans decrease when they get older. That is how some 30+ years old people get million dollars loan because when they are young they can afford to stretch the mortgage repayment across longer period. So let's say after 10 years MOP the person is around mid forties, then 30 years mortgage loan is no longer an option meaning the monthly mortgage repayment amount is going to be substantially higher when repayment period is shortened. No doubt the prime location HDB prices is going up after their 10 years MOP but compared to the past when sellers are able to flip for the same amount of profits after 5 years which is twice the annual ROI. The 6% subsidy clawback is just a final nail telling people that if they really want to sell then pay up as a result most people who buys the 10 years MOP BTO will eventually choose to stay there all the way.
@@contrarian2496 The resales trends for central location HDBs seems to indicate that there will continue to be increases in value over time, well beyond the 5 yr mark. Take for example Pinnacle@Duxton, even 10 years+ after completion the price trend remains very strong. According to Edgeprop, resale PSF in Jan 2018 for 5 rm high floor unit was $991 and in Feb 2023 it was $1,145. That's a 15.5% increase over 5 years. Also, maximum loan tenure is only 1 variable to consider when it comes to affordability. A shorter tenure can be compensated by increased household income over time i.e. shorter tenure but higher repayment quantum = same/higher overall loan value. When coupled with the higher cash payout @ 10 years vs. 5 years as shown above, and assuming a generally prudent mindset from years 5-10 in terms of overall spending, I would argue that my original hypothesis that this could result in larger spikes downstream is still quite plausible.
By the time the 10 year mop is up for prime or plus, I am 65 years old, and there will be even more elderly around. Still have ENERGY TO SELL AND BUY AND MAKE MONEY ?
If buy at so high price with income ceiling of 14 or 16 thousand once job is LOSS PEOPLE MAY KILL THEMSELVES. the job become so important, which increase the stress level of people. People refuse to LIVE WITHIN THEIR MEANS.😢😢😢😢😢😢😢😢😢😢😢😢😢😢😢😢😢😢
I think it depends on things like the population, if it remains more lucrative and population increases, then everyone will need a home so prices will still run I guess...
HDB is a public subsidize housing - its a home and not for speculation so 10 year MOP is fair. Singaporeans are foolish, you sell a HDB to upgrade to a 99yrs condo which translate to more loans and higher mortgage rate, won’t staying in the HDB be better by paying it off earlier and use the money for holidays etc.
i have to disagree with you. Those i know, who bought private after their hdb, be it landed or condos, their total housing value went up so much, they able to own not 1 but 2, wife and husband one each. Renting out 1, with the rental paying for the other. Some even better stay with the in-laws and both units rented out. They able to go holiday more often, retire early. i forgot to mention, Legacy pass down 1 each to their children.
Subsidies are taxpayers money, taxpayer should enjoy the capital gain, so claw back on subsidies and prorata gains......if you know what I am trying to say.
On Gerald's point that people will price in the 6% clawback into the selling price of the HDB.. I don't think its so simple. There is a income limit of 14k for resale buyers of Prime locations... means we are not gonna get 1 million dollar HDBs anymore since 14k income limit can only loan 700k+
Smaller pool since there are always some with capital.
Yes Valid point still!
Good point on the income limit meaning there's a lot of cash that's needed! Only time will tell truly what will happen. Based on what I was taught on the consumer psychology of property, there is inclination to avoid loss, and I bought at say the max price for my property. I will die die refuse to sell at a loss after factoring the clawback. So if I am a buyer that bought at 900k plus 6% clawback, it will take a lot to convince me to sell it at say 800k or even at 900k to incur a 60k loss. But 300k cash is really expensive too... at that point makes more sense to get a condo.
It'll be interesting to see which force will be stronger once the first batch of prime location MOP-ed! The restrictions are indeed quite harsh but then again a lot of Singaporean have lui in their bank accounts too!
The sad thing is that Salary rate ratio doesn't seems increase as much as HDB price increase ratio over the 10 years.
My pov is starting salary has matched or increased faster than the growth of BTO price.
Its the resale market, that one is market forces of greed and fear
@@JOSHTANLIVE Been a average salaryman myself, I find that this isn't the full picture. It is true that new jobs with higher average salary are created by IT and automation, which helps to push up the statistic. However IT and automation also replaces more traditional jobs (some higher and some lower pay). I can understand the need for foreigners to enter and become citizens, but I think that government failed to fine tune the details of the policy and manage the rate of inflow well, causing resale HDB place to increase too fast.
@@JOSHTANLIVE Been a local born around 1989 is tough, first it is not easy to find a good partner during the mid 20s period as many Sg girls are very picky and judge by surface. Thus I cant buy BTO or resale flat when the prices are still reasonable around 9 years ago although I was working that time and contributed to Singapore economy. I am married now, whereby the HDB price is already inflated quite a lot. Yes BTO price is not inflated as much as resale but need to ballot. The govt HDB policy is like to lure people to marry early, if not one will have to eat the higher housing cost in the future. Is very unfair as not all Singaporeans can marry early and/or get good jobs with around 4 to 6k salary or able to work without stopping. I was forced to stop for 5 months till now due to family issue. I have been looking into re-study and re-training to another sector, however it takes times and money also. I also need to put in time and resources for my family. Everything needs money nowadays and prices are high, situation is really tight and hard to make adjustment even if one is willing to.
@@AhWing89 resale prices are dependent on market sentiment which goes in cycles. BTO prices have been controlled quite well imo
The policy of allowing Single to only buy HDB at 35 years old is a very unfair and hypocritical policy. Is like using the 'buy HDB early for financial gain' factor as a lure for people to get marry early for materialistic gain.
The suay ones are the folks that currently stays at prime or plus area, then Kenna SERS en-bloc . Kinda the force into prime / plus living. Rental restrictik. 😢
Quite unlikely the rules will allow such an instance?
MOP is the killer for making money
Well Josh was sharing with me in the past, MOPs were shorter, then people got used to it (like it became the norm) and property prices still continue to rise... Now it looks like people need to get used to 10 years MOP, and when we do, prices will continue rising againhaha
Just wondering since by the time Standard flats kicks in place where the government pushes for a lot of BTOs (2021-2025), won’t there be an oversupply of flats to sell by then? This might cause the BTO owners to have lesser profit (bear run) than projected if they plan to sell right away after MOP.
Will Plus and Prime be better in that case since they tends to appreciate better in a longer run (ROI) with maybe better primary school and MRTs?
Interesting view point
10 years mop and subsidy clawback is not going to help much, its like kicking the problem down the road further.
10 years later, subsidy clawback is only a scratch on their massive profits, unless the government change to percentage based tax on profit.
Lottery effect is still there
POV noted
If people can not upgrade to profit from the house, the condo will be out of reach to the majority, and only those who have money can buy. LIKE OWNING CARS😢😢😢😢😢😢
any idea why house must make a profit? isnt it for living?
@@dragonEX123456splendid reply. Dont be greedy. Be contended if one has enough to meet subsistence
Commercial property :D no funny restrictions and additional stamp duties. I think profiting off government subsidized residential property is quite a touchy subject because it's like using other people's tax money for your own personal gain at the detriment of a genuine buyer just trying to get a shelter but are priced out.
But from another perspective, if upgraders profit reduces significantly then they can no longer support the current high condo prices right? So eventually the condo prices will have to come down especially in OCR locations where the main demand comes from BTO upgraders. The HDB and condo price gap will not widen significantly because if that happens buyer will rather buy central HDB as it's cheaper and more convenient than condo, so it's like a swinging pendulum if you push one side excessively it just gets shifted to the other side but total energy (demand) remains constant.
I see lower demands for Prime, 14 yrs till MOP, many things can happen. While others get resale they can flip twice b4 u sell yr Prime 🤔
Now it’s a bull leg
In a bear leg, it’s different. I bought my resale in 2011 and if it flipped out at 2016, it would have been a $50k-$70k loss
In the same 14 years period, private property could be flipped for at least 4 times based on sale upon third year to avoid stamp duty. But the happiest people in this scenario would be the property agents earning 4 times commission hence I think eventually people will want to settle down as shifting one's primary residence is a hassle. Therefore if a property has good annual ROI I would actually stay put instead of constant flipping.
Open market makes prices go WILD because it is all about PROFIT. what is the point of owning a good condo and can not liquidity with huge profits😢😢😢😢😢😢😢😢😢😢.
Yes many singaporeans hv cash! Otherwise how to meet income ceiling requirements and buy $2m Ex
Yes data points really suggest so
Ya! When I see singaporeans paying 1.5m cash to buy a 5 bedder EC, my jaw drop dao.....!
Cant have it both ways cheaper n more money when u sell.
For the prime and plus category housing, can the whole unit be rent out after the 10 years MOP?
ONLY room rental. Not whole unit
Prime only rooms, so can't rent entire flat. Plus I think details are not flashed out yet I believe.
The first owner will definitely not be able to rent out the entire unit, but for subsequent resale buyers they are likely able to do so since the subsidy clawback and 10 years MOP also do not apply to resale buyers.
@@JOSHTANLIVE I see. Thanks.
@@GeraldOng Noted. Hope the details will be out soon.
If BTO offerings under PRIME continue to be limited to 4-rooms & smaller flats, the new measure will just drive those resale 5-rooms & larger flats in choicest locations to much higher prices. Demand for larger flats are just increasing as evident in the application rate of such flats in past BTO launches, even in those outlying areas. HDB should just stop building so many 2 or 3-rooms in PRIME area because the market demand is for 4-rooms & bigger flats.
By then the resale 5rms will be even older, would that itself sway buyers to smaller newer ones?
HDB definitely aware of demand of 4rm.
3rd is maybe to give a smaller quantum option to the population?
Singapore soon will have 50% single household, 30% couples without kids and 20% have 1 or 2 kids. Government knows what he's doing.
These longer MOP & higher restrictions for the PRIME BTO flats would just mitigate the lease decay impact of older flats in the central area. The 10-yrs MOP & the average waiting time of 4 yrs would mean that such PRIME flats would only have a balance of ard 85 yrs when they can be sold in resale market. This coupled with the subsidy clawback from sellers & income ceiling for potential buyers would affect the pricing feasibility of such PRIME flats.
@@sgdwealth3606 good point raised
Because 5 room BTO in Prime locations were the initial catalyst of million dollar HDB due to high psf of Prime locations (example over $1K/psf for Pinnacle Duxton), so govt stopped selling it. In other words, Prime location psf even 4 room size is already transacted for a million dollars so imagine for 5 room size that's the reason why there are HDB in Prime locations transacted for $1.5M.
So it's not a matter of demand, yes majority prefers 5 room but due to the high psf of Prime locations the govt cannot continue to build it due to political sensitivity.
Wait for the speaker to speak and don't interrupt
Yup
Government housing is for staying long term and should not be used for flipping. While we may celebrate the profit we earn from selling our flat but our future generation will suffer like Hong Kong. Do we want to spend millions of dollars sitting on a 99 years lease? The money can be made better use to invest for retirement or enjoy for food or travel. This is already a poison that cannot be resolved.
POV noted. I feel future generation may not suffer from an affordability standpoint if income rises at the same pace.
People that managed to marry early and buy HDB early transfer the cost of inflation and speculation to those that qualify to buy later through resale market.
Would it more relevant to invite expert on the subject or a person who has more convincing in investing to talk about this? Just my 2 cents of thoughts 🙏🏻
I do hope to be able to interview authorities in future here. Stay tuned
If subsidy clawback becomes included in eventual resale prices (hence net zero effect) and MOP increases to 10 years, that makes it easier to eventually upgrade since the owners (assuming no differences to lifestyle and spending), would have more time to accumulate a larger cash hoard by the end of the 10 yr MOP and hence more purchasing power?
Interesting pov
Condo prices appreciate faster than hdb though. Unless their income catch up faster than the rising prices
@@evoxpress on an absolute basis yes since quantum is very different but don't forget that its also about leverage. With more capital (from additional years of savings) you can borrow 3x to afford more too (income permitting that is)
The main issue with 10 years MOP is the age factor, typically people's ability to leverage on loans decrease when they get older. That is how some 30+ years old people get million dollars loan because when they are young they can afford to stretch the mortgage repayment across longer period. So let's say after 10 years MOP the person is around mid forties, then 30 years mortgage loan is no longer an option meaning the monthly mortgage repayment amount is going to be substantially higher when repayment period is shortened. No doubt the prime location HDB prices is going up after their 10 years MOP but compared to the past when sellers are able to flip for the same amount of profits after 5 years which is twice the annual ROI. The 6% subsidy clawback is just a final nail telling people that if they really want to sell then pay up as a result most people who buys the 10 years MOP BTO will eventually choose to stay there all the way.
@@contrarian2496 The resales trends for central location HDBs seems to indicate that there will continue to be increases in value over time, well beyond the 5 yr mark. Take for example Pinnacle@Duxton, even 10 years+ after completion the price trend remains very strong. According to Edgeprop, resale PSF in Jan 2018 for 5 rm high floor unit was $991 and in Feb 2023 it was $1,145. That's a 15.5% increase over 5 years.
Also, maximum loan tenure is only 1 variable to consider when it comes to affordability. A shorter tenure can be compensated by increased household income over time i.e. shorter tenure but higher repayment quantum = same/higher overall loan value. When coupled with the higher cash payout @ 10 years vs. 5 years as shown above, and assuming a generally prudent mindset from years 5-10 in terms of overall spending, I would argue that my original hypothesis that this could result in larger spikes downstream is still quite plausible.
When people challenge the system, the people will pay for their actions😢
Car and house like this, that is why people love to go to JB AT ALL COST😢
That's why voting day jam 6 hours lor hahahaha
By the time the 10 year mop is up for prime or plus, I am 65 years old, and there will be even more elderly around. Still have ENERGY TO SELL AND BUY AND MAKE MONEY ?
Most don’t change homes that often also
If buy at so high price with income ceiling of 14 or 16 thousand once job is LOSS PEOPLE MAY KILL THEMSELVES. the job become so important, which increase the stress level of people. People refuse to LIVE WITHIN THEIR MEANS.😢😢😢😢😢😢😢😢😢😢😢😢😢😢😢😢😢😢
In the long run, the million dollar question is HDB, AN ASSET, OR LABILITY
It is basically a depreciating (to zero) asset.
I think it depends on things like the population, if it remains more lucrative and population increases, then everyone will need a home so prices will still run I guess...
HDB is a public subsidize housing - its a home and not for speculation so 10 year MOP is fair. Singaporeans are foolish, you sell a HDB to upgrade to a 99yrs condo which translate to more loans and higher mortgage rate, won’t staying in the HDB be better by paying it off earlier and use the money for holidays etc.
A well decorated HDB in a nice location, is even better to be lived in than quite a lot condos.
i have to disagree with you. Those i know, who bought private after their hdb, be it landed or condos, their total housing value went up so much, they able to own not 1 but 2, wife and husband one each. Renting out 1, with the rental paying for the other. Some even better stay with the in-laws and both units rented out. They able to go holiday more often, retire early. i forgot to mention, Legacy pass down 1 each to their children.
10 years can be 15 years 😢😢😢😢😢😢😢😢😢😢😢😢
To bad this is singapore with LIMITED RESOURCES but UNLIMITED IDEAS FROM THE STATE😅
More and more people will visit singapore pools 😅😅😅😅😅😅😅😅😅😅😅😅
Jai Hinduja. Homes are used for living and not frying.
Every normal thinking person will just go for STANDARD and when it gets out of hand COOLING MEASURES COMES IN and if cannot Revise the RULES😢
Subsidies are taxpayers money, taxpayer should enjoy the capital gain, so claw back on subsidies and prorata gains......if you know what I am trying to say.
I have to say I support ur idea
Only the rich becomes richer... lol,nfa😂
Isn’t this precious land to be occupied by SGean, we should see more SGean able to upgrade their life in our land
sinkie pwn sinkie
The impact will take time to manifest. 2040.