(12-01-2013, 01:54 PM)HitandRun Wrote: [ -> ]A HDB is a very unique shelter in the sense that nobody, not even the government, can force one to liquidate it to satisfy one's debts. (Except for maybe one's spouse in a divorce proceeding or one has defaulted on a loan to the flat?)
A secured loan gives the lender first right to seize and sell the collateral in the event of a default. This holds true regardless of whether you take out such a loan to buy a HDB flat, a condominium unit, landed property, industrial property or even a ship or airplane. Other creditors have to wait in line. So there is nothing special about the HDB flat in this respect.
What IS unique about the HDB flat is that because of the HDB's social mission, in the past, if you borrowed from the HDB to buy a flat and defaulted, the HDB did not seize the flat and evict you.
However if you borrow from a bank to buy a HDB flat, the banks have no such compassion.
(12-01-2013, 01:27 PM)nsengkia Wrote: [ -> ] (12-01-2013, 09:27 AM)Musicwhiz Wrote: [ -> ] (12-01-2013, 09:17 AM)nsengkia Wrote: [ -> ]P.P.S.: I currently do NOT own a house and am renting my place so I do have an interest in a housing crash. 
Thanks for your observations! Interesting.
So I see you are "short" on Singapore's property market. Haha.
Actually I am not really "short" on Singapore's property market, but just following Benjamin Graham's advise that "Investment is most intelligent when it is most businesslike.".
I am currently renting a HDB flat. The decision to do so was made in Dec 11. At that time, market value was around $700K. Asking rent was $3K per month. I am retired so I do not want (or qualify for) a housing loan. So the investment decision was between $700K to call a place my own or rent a place and invest $700K in the stock market.
$3K per month is $36K per year or a rate of about 5% of market value but owning the place does provide possible upside. By comparison, at that time, industrial REITS were trading around a 10% yield and the high end property developers were trading at 50% of RNAV.
For me, the intelligent decision was a no brainer as 50% of the required capital amount invested in industrial REITS fully covered the rental cost and the remaining 50% of the required capital cost invested in high end property developers fully covered the capital cost. So essentially, you get a "synthetic" (though non-exact) exposure to the Singapore property market with a much more favourable risk return profile.
As to my "target price psf for a freehold condo. at the CRASH?" - I really do not have one. If it makes intelligent business sense (when my rental is up at the end of this year) to buy a property compared to investing in the stock market I would do so and vice versa.
That's a good insight. Thankyou.
(12-01-2013, 02:23 PM)d.o.g. Wrote: [ -> ] (12-01-2013, 01:54 PM)HitandRun Wrote: [ -> ]A HDB is a very unique shelter in the sense that nobody, not even the government, can force one to liquidate it to satisfy one's debts. (Except for maybe one's spouse in a divorce proceeding or one has defaulted on a loan to the flat?)
A secured loan gives the lender first right to seize and sell the collateral in the event of a default. This holds true regardless of whether you take out such a loan to buy a HDB flat, a condominium unit, landed property, industrial property or even a ship or airplane. Other creditors have to wait in line. So there is nothing special about the HDB flat in this respect.
What IS unique about the HDB flat is that because of the HDB's social mission, in the past, if you borrowed from the HDB to buy a flat and defaulted, the HDB did not seize the flat and evict you.
However if you borrow from a bank to buy a HDB flat, the banks have no such compassion.
D.o.g is right but only applies to properties bought on or after 1 Sept 02 and/or loan contracts with financier signed on or after 1 Sept 02. When this type of property is sold, the sale proceeds shall be applied to repay the financier and the Board in the following order of priority:-
- repayment of the outstanding housing loan;
- repayment of CPF principal sum up to 100% of the Valuation Limit plus CPF saving used to pay the legal costs, stamp duty and survey fees;
Equal ranking (pari passu)
- repayment of CPF principal sum beyond 100% of the Valuation Limit and CPF accrued interest;
- repayment of outstanding balance of the housing loan interests;
Equal ranking (pari passu)
- repayment of the Board's legal costs and expenses;
- repayment of financier's legal costs and expenses;
- repayment of any other moneys owing to financier under the mortgage
For those Properties bought before 1 Sept 02 and/or loan contracts with financier signed before 1 Sept 02. When the property is sold, the sale proceeds will first be used to repay the CPF savings used for payment of stamp duty, legal costs and survey fees, and CPF principal sum up to 80% of the Valuation Limit before repayment of the balance CPF principal sum, outstanding housing loan, CPF accrued interest, outstanding housing loan interest, and the Board’s and financier’s costs and expenses and all other sums owing to the financier in that order.
P.S. The info quoted from CPF website FAQ
(12-01-2013, 11:15 AM)mrEngineer Wrote: [ -> ]In the previous rounds of cooling measures, I saw some of my property counters drop 7% the next day but what happened in the end? I seriously think there will be no much change overall as if Singapore PR first house demand is high enough (sub-let or not, i do know china PRs who are swooning at Singapore housing prices compared to China big cities and they want the captial appreciation) then there will be no difference for HDB resale prices.
What i really observe is that Singapore govt way of "curbing hot property market" (or many other "measures") is to increase their tax revenues. Why can't they simply announce like foreigners are not allowed to buy private property and PRs not allowed to buy HDBs anymore?
what citizen can do is to exercise their vote wisely during election.
(13-01-2013, 09:18 AM)pianist Wrote: [ -> ] (12-01-2013, 11:15 AM)mrEngineer Wrote: [ -> ]In the previous rounds of cooling measures, I saw some of my property counters drop 7% the next day but what happened in the end? I seriously think there will be no much change overall as if Singapore PR first house demand is high enough (sub-let or not, i do know china PRs who are swooning at Singapore housing prices compared to China big cities and they want the captial appreciation) then there will be no difference for HDB resale prices.
What i really observe is that Singapore govt way of "curbing hot property market" (or many other "measures") is to increase their tax revenues. Why can't they simply announce like foreigners are not allowed to buy private property and PRs not allowed to buy HDBs anymore?
what citizen can do is to exercise their vote wisely during election.
Agree, just vote wisely , this is maximum we can do for us.
these 2 are long overdue (it just shows their lousy below par policy):
b) PRs who own a HDB flat will be disallowed from subletting their whole flat.
c) PRs who own a HDB flat must sell their flat within six months of purchasing a private residential property in Singapore.
Why they need to come up with 7 CMs ? Because they were all half hearted , half baked. Delay tactic and tries to stretch the wayang as long as possible, long stories but no substance.
This latest wayang can stretch another one or 2 years , but many are still hopeful.
Prices can probably hold up or even increase for some time, I agree.
The latest measures will only have a temporary effect. There is simply too much hot money around, and Singaporeans (I hate to admit) are just too cash-rich (unlike me!
). Haha!
Just another meaningless action or so-called wayang only and many enjoy watching.
(12-01-2013, 11:15 AM)mrEngineer Wrote: [ -> ]In the previous rounds of cooling measures, I saw some of my property counters drop 7% the next day but what happened in the end? I seriously think there will be no much change overall as if Singapore PR first house demand is high enough (sub-let or not, i do know china PRs who are swooning at Singapore housing prices compared to China big cities and they want the captial appreciation) then there will be no difference for HDB resale prices.
What i really observe is that Singapore govt way of "curbing hot property market" (or many other "measures") is to increase their tax revenues. Why can't they simply announce like foreigners are not allowed to buy private property and PRs not allowed to buy HDBs anymore?
It will be nice to setup a property counters portfolio , we just need to sell before the next cooling measures ... 8th, 9th, 10th.. Etc .
Property price won't crash simply because land price not going down , developers can't buy cheap land , are we seeing cheaper new HDB per sq foot given more supply ? If no, how can citizens buy cheap?