HDB flats appreciate
I refer to the article “Appreciate HDB flats as more than assets” (Sunday Times, Nov 22).
11.2 to 35.8% gain over the last 1.5 years?
It states that “the estimated capital gain for a four-roomer in Sengkang was 35.8 per cent while it was 29.3 per cent in Punggol (see table). In comparison, the estimated capital gain for a four-roomer in Toa Payoh was 20.4 per cent.”
After renovation costs – gain from -1 to 15%?
If we assume that the typical renovation, buying and selling costs are 10 per cent of the original BTO launch sale price – the Estimated Capital Gain/loss of 29.3, 11.2, 35.8, 17.9 and 20.4 (in the table) becomes about 15, -1, 9, 7 and 9 per cent.
Can only sell after 5 years?
One may need to note that the “appreciation” shown over the last one year plus, may be academic and arguably be quite meaningless as a BTO flat can only be sold after five years.
How much is the “subsidy”?
Arguably, the figures in the table (computed by PropNex) may be a better indicator of how much (highest 15%) or little (lowest -1%) the so called “subsidy” of BTO flat prices to resale prices “really” are.
Median prices tell a different story?
The reason may be that the table is using the “median sale price at launch” and “median resale price”.
HDB’s “lowest prices” tell another story?
In contrast, if you look at the HDB’s BTO pricing – it uses “selling price (excluding grants) from” – i.e. the lowest priced flat and the “transacted prices of resale flats in the vicinity” – i.e. from the lowest to the highest.
For example, if you look at the HDB’s BTO launch this month – the “subsidy” (lowest priced flat divided by lowest transacted resale price) range from 39 to -9 per cent.
BTO price higher than resale price?
The lowest priced 5-room flat in Toa Payoh at $544,000 against the lowest transacted resale price at $500,000 gives a “subsidy” of -9 per cent ($544,000 divided by $500,000).
In other words, the BTO price is 9 per cent more than the resale transacted price. So the “subsidy” may in a sense have become an extra “premium”.
More transparency please?
Perhaps the HDB should include and also show the median prices like PropNex.
The HDB should be more transparent as to how the BTO prices are determined.
Since the people have given their trust and mandate – shouldn’t we reciprocate by being more transparent?
We should also spend more to help Singaporeans.
Leong Sze Hian
