Re: How papist leegime cheated Singaporeans in land and housing
- From: "truth" <truth@xxxxxxxxxxxx>
- Date: Tue, 02 Feb 2010 14:08:38 GMT
Why in the first place are this type of essential data not
provided freely to the citizens ? This is our rights.
Why are they so afraid that we know the actual cost and
the breakdown ? They must be hiding something. Either
they are profiteering at the expense of the Singaporeans
or they are trying to hide the flow of funds. This is very
dangerous. Without transperancy and accountability and
independent check and balance, the chances of fraud is
very great. Is the papist leegime hiding fraud ?
"I am SBAGLK. Understand?" <SBAGLK01@xxxxxxxxxxxxx> wrote in message
news:4b67b2ce@xxxxxxxxxxxxxxxxxxxx
You want answers, you dig for it yourself....
http://en.wikipedia.org/wiki/Build-To-Order_%28HDB%29
Go down to the List of BTO projects and view the table.
eg. Pinnacle. Total 1848 units. Chip Eng Seng contract = $279 million.
That works out to $150,974.00 per unit as a ball park figure (ignore big
or small units....just the avg per unit will do).
Many more examples can be tabulated, where one can get a feel of the
construction costs per unit (and that includes M&E services, windows,
doors, kitchen sink, carpark, common area, etc)
Of course there are still landscape and playground $ not included; but
it's a small sum compared to the main contract $.
Cost of land..... tell me how much is the cost of land there per sq feet
from that example? does it work out to $150,000.000 per unit of high rise?
Even if so, 150k (construction) +150k (land)= $300k nia nia and that is
The Pinnacle @ Tanjong Pagar and not some Sengkang swamp land.
So according to Mr Mah's response to Mr Chiam, wikipedia's data is
probably lying .......but that's a different story, isn't it?
truth wrote:
http://www.temasekreview.com/2010/02/02/why-is-hdb-able-to-reveal-breakdown-cost-of-their-flats-publicly-in-1981-and-not-now/
February 2, 2010 by Our Correspondent
Filed under Opinion
Leave a comment
OPINION
The exact breakdown cost of HDB flats is one of the biggest mysteries
waiting to solved in Singapore.
Despite the government's repeated claims that HDB flats are "heavily
subsidized" for Singaporeans, many Singaporeans remain unconvinced.
When HDB revealed in its annual report that it suffered a loss of $2
billion dollars last year as a result of subsidizing first-time home
buyers, few buy its story.
In November 2009, Member of Parliament Chiam See Tong asked how much HDB
flats cost and the profit margin added to the cost when selling the flats
to which National Development Minister Mah Bow Tan replied in Parliament:
"The total cost of building flats varies based on when we build, where we
build and what we build. It includes cost of land, as well as cost of
construction of the flats and ancillary services. It varies from $230,000
for a 3-room flat in Punggol to $530,000 for a 5-room flat in Tiong
Bahru."
He added that HDB does not price its flats based on cost-plus-profit, but
at a discounted market price. Together with the Additional Housing Grant,
which varies from $5,000 to $40,000, the subsidies amount to about 20 per
cent of the market price for 4-room flats, on average.
[TODAY, 24 November 2009]
The picture will become clearer if Mr Mah provides us with the exact
breakdown of the construction and land cost of the flats which he has
declined to do so.
Neither did HDB provide the figures in its annual financial reports nor
on its online portal HDB Infoweb which contains other detailed
information such as the resale price indices from 1990 till now.
One may attribute Mr Mah and HDB's reticence to do so to the possibility
that the information is covered under the Official Secrets Act, but it is
not.
In 1981, HDB published the construction cost, land cost, selling price
and subsidy of old and new 3 room and 5 room flats in The Straits Times:
3 room flats:
5 room flats:
[Credit: Forumer "Zack" from SPUG forum]
As we can see easily from the above figures, HDB did provide a
substantial subsidy for its flats back then.
For example, the cost price (construction + land cost) of a 3 room flat
in a new town is $61,500 per unit. The selling price is $32,800 as HDB
provided a housing subsidy of $28,700 to the home buyers.
The prices of new HDB flats have sky-rocketed in recent years. 4 and
5-room flats in a recent BTO project at Queenstown fetch more than
$400,000 and $500,000 respectively.
What is the construction cost, land cost and total cost per unit built?
Is HDB selling them to Singaporeans at below cost price or is it making a
profit?
While the land cost is not revealed by the government, we are able to
estimate the construction cost of new flats based on figures provided by
the deveopers.
According to business weekly, the Edge, Sim Lian Construction Co. has
been awarded a contract worth $99.8 million by the Housing & Development
Board for the building works at Queenstown Redevelopment Contract 30 with
a total of 774 dwelling units which amounts to a construction cost of
$129,180 per unit.
As we do not know the size of the flats, let us assume that they will be
sold at $300,000 for a three-room flat which will amount to a land cost
of between $170,820 per unit if they are indeed sold at cost price:
Construction cost ($129,180) + Land Cost ($170,820) - HDB subsidy
($40,000) = Selling price ($260,000)
Since Singapore is a small island with limited land, it is hardly
surprising that land prices are going up, but who owns the land to build
the HDB flats in the first place?
It turns out that most, if not all are owned by the Singapore Land
Authority, a statutory board under the Ministry of Law formed on 1 June
2001 by the merger of the Land Office, Singapore Land Registry, Survey
Department and Land Systems Support Unit. (Source: SLA)
In short, the land belongs to none other than the state - the Singapore
government!
How did the Singapore government manage to own so much land? Did they
acquire them at market rates? Apparently not.
In 1966, the PAP government introduced a draconian law known as the Land
Acquisition Act which "basically compelled all private landowners to give
up whatever land or property they owned when the government required them
for public purposes."
This law gives the government the power to acquire land at a price which
is "not higher than what the land would be worth had the government not
carried out development in the area" or in other words, way below the
market value.
By 1976, 10 years after the act came into affect, the percentage of
state-owned land went up to 67 per cent, from less than 50 per cent in
1959. By 2004, about 90 per cent of the land was owned by the government
and its statutory boards, according to the Singapore Land Authority.
[Source: Men in White, page 621]
In summary, the Singapore government acquired the land in Singapore from
private landowners at a low price. It then "sells" it to HDB via
Singapore Land Authority and other statutory boards at "market price" to
build HDB flats.
HDB then sells these flats to Singaporeans at "cost price" while
providing housing subsidies of between $5,000 to $40,000 to first-time
home buyers.
Technically speaking, HDB is making a "loss" as on top of paying for the
construction and land costs, it still has to "subsidize" Singaporeans by
selling them at below cost price.
However, since the land is not sold to HDB at the price which is paid for
when the state acquired the land, the ultimate beneficiary is the
Singapore government - a situation akin to "money going from one's left
to right pocket."
HDB should come clean with Singaporeans on the exact construction and
land costs of its recently launched BTO projects in Punggol, Sembawang,
Choa Chu Kang and Queenstown like what it did in 1981.
The owners of these land, be it SLA or other statutory boards should
reveal the prices they pay for the lands under the Land Acquisition Act.
Some of them may already belong to the state while others are acquired at
very low prices in the early 1970s and 1980s.
The next important question to ask is: if the Singapore government has
been making a "profit" from these land sales to HDB, where are the
profits going to?
At the end of the day, it is Singaporeans who are paying for the HDB
flats, not HDB itself never mind whether it did "subsidize" home buyers
or not.
Public housing is supposed to be easily affordable to ordinary
Singaporeans like in the 1970s and 1980s. The prices of new HDB flats
should be pegged to the median wages of ordinary Singaporeans instead of
that of resale flats.
In 1981, a brand new 3-room flat costs only $32,800. Today, it costs more
than 7 times, but our salaries have not increased by that much.
The Singapore government can easily reduce the cost price of new HDB
flats by selling the land at a lower price to HDB for constructing them.
Perhaps SLA and other statutory boards should consider "subsidizing"
Singaporeans for HDB flats by selling the land to HDB at a lower than
market price just like when it first acquired the land years back.
After all, as land prices have sky-rocketed in the last few decades, SLA
will still able to make a "profit" even if it sells the land at a couple
of thousands of dollars less than its market price to HDB.
So when HDB says it is selling flats to Singaporeans at cost price with
subsidy, it is technically correct. However, it fails to mention that it
is buying the land from SLA and other statutory boards at market price.
With public anger fast rising over the escalating HDB flat prices, it is
time Singaporeans exert pressure on HDB and other relevant agencies to
reveal the truth of the matter - the exact constuction and land costs of
HDB flats for us to judge for ourselves if HDB flats are indeed heavily
"subsidized" by HDB and if they are worth the price we are paying for.
.
- References:
- How papist leegime cheated Singaporeans in land and housing
- From: truth
- Re: How papist leegime cheated Singaporeans in land and housing
- From: I am SBAGLK. Understand?
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