Market Review and Trends
Why HDB prices will go up after new measures
By Singapore Blue Chips  •  September 11, 2010
[caption id="attachment_1054" align="alignright" width="150" caption="Photo by 私奔到月球"]Photo by 私奔到月球[/caption] As I sit at my rocking chair (old man already), I look at the measures and decide that I can never ever afford my HDB flat. The current measures make owning HDB more difficult: HDB buyers with pte property and are willing to cash out (sell) their pte property can afford a high COV and thus are willing to pay a high price for HDB resale. Hence high COV is here to stay. HDB owners are unwilling to sell the property now to buy private property as they are unable to buy back HDB later. Hence, supply for resale HDB will go down as people are more cautious upgrade their housing. Alternatively, they demand a higher price to give up this prerogative and pay for their pte homes. We know after the measures, HDB is harder to own. In general, more people will want to buy HDB FIRST before buying private property now. Hence, more would be more incline to buy HDB. This increases current demand. However for current HDB owners, they are unable to buy a new HDB without incurring a resale levy (can be as high as $50k for executive flat). No HDB owners will want to buy new flats now as the levy will cancel off their COV and profits. It makes no sense for them to buy a cheaper house but to fork out more cash. Hence, more people will be staying put in their HDB to wait out for a higher price. Eventually, HDB resale price will continue to climb upwards. If you think HDB will surpass private property prices, you are not alone. Judging from the COV and resale transactions, I think it is cheaper to buy private property in time to come. Read more...
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By Singapore Blue Chips
I am an ordinary Singaporean guy in my early thirties who is passionate about investing since 2003. I live in a 4 room HDB flat and like many Singaporeans, dream of becoming a millionaire. Currently I am an ordinary worker and have just completed my Masters. I aspire to build up a portfolio of 1 million dollars and derive a yearly recurring dividend income of 6% by 35. The only way to achieve this aim is to work hard and invest prudently. I invest in a variety of instruments such as unit trusts, stocks, REITS and foreign currencies mainly Australian dollars options.
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