Source : Straits Times - 18 Oct 2008
I REFER to Tuesday’s report, ‘Robust demand for recent HDB launches’.
On the one hand, young Singaporeans are urged not to delay marriage and have more children to help solve our procreation problem.
On the other, new Housing Board five-room flats cost more than half a million dollars: $645,000 in Pinnacle@Duxton and about $700,000 in the two HDB Design, Build and Sell Scheme (DBSS) projects at City View@BoonKeng and Park Central@AMK.
Certainly one needs a five-room, 1,100 sq ft flat to house a family of two parents, three children and a maid comfortably.
Many young couples do not feel the immediate pinch of such pricey flats because up to 90 per cent of the cost can be financed by long-term debt stretching up to 30 years.
A recent Sunday Times editorial rightly advised prudence.
For a couple with a combined monthly income of $8,000, an HDB loan of $500,000 at the concessionary interest of 2.6 per cent and a monthly loan instalment of about $2,000 may appear affordable.
But at the end of the 30-year loan period, they would have coughed up some $800,000 in total capital and interest repayments.
Indeed, when young couples sink so much money into their HDB flat, how much will there be left to raise their children, and to provide for their health-care and retirement needs?
The first HDB DBSS project in Tampines was launched with publicity attesting to its success.
Despite similar publicity for the two DBSS projects in Boon Keng and Ang Mo Kio, both private developers have frequently advertised immediate walk-in selections.
For transparency and to help HDB buyers, the HDB should publicly disclose the actual take-up rates for the various types of flats in such DBSS projects, as well as Pinnacle@Duxton.
See Leong Kit
Pricing puzzle
‘After taking all such costs into account at the launch of Pinnacle@Duxton in 2004, the HDB went on to price leftover stock at $200,000 above the initial launch price.’
MR TAN KIM CHUAN: ‘I refer to the article on Tuesday, ‘New HDB flats below market value’. The HDB says it takes a market-based approach when pricing new flats and then sells them at a discount to the market value. However, on Aug 1, the HDB explained in a letter, ‘HDB flats: Low figure is building costs alone’, that ‘the total construction cost of flats includes other costs such as infrastructure, piling works, lift installation, consultancy and project management, financing and purchase of land’. That is, the total cost had already been taken into account and the prices subsidised before the flats offered to the public. Yet, after taking all such costs into account at the launch of the Pinnacle@Duxton development in 2004, the HDB went on to price its leftover stock of flats at $200,000 above the initial launch price. One can’t help but feel that the HDB is either over-pricing its flats or is profiteering from the property boom. I hope the authorities can shed some light on the discrepancy.’
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