Some flat owners sitting on a goldmine

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#1
This article is so blatant in selling the "higher prices are better" syndrome. Sell high, buy high too. What's the point? More debts. Sigh.

The Straits Times
May 26, 2012
Some flat owners sitting on a goldmine

HDB units bought in 2007 can fetch more than double the purchase price

By Daryl Chin

SOME lucky Housing Board home owners, whose flats are entering the resale market this year, are looking at more than double the price they paid for the units.

Property analysts say such high asset appreciation, attributable to good timing and a buoyant resale market, is one that is unlikely to be repeated in a long time.

These flat owners, who had the keys handed to them in 2007, would have fulfilled the minimum occupancy period (MOP) of five years this year.

'Back then, HDB prices were in the doldrums because of Sars (severe acute respiratory syndrome) and the Asian financial crisis,' said PropNex chief executive Mohamed Ismail, who linked the windfall they could enjoy to the surge in resale flat prices in recent years.

He noted that the HDB's resale price index in the first quarter of this year stood at 191.6. It was 104.9 in the first quarter of 2007.

In a statement to The Straits Times, the HDB said these flats whose MOP could be fulfilled this year include those in mature estates such as Queenstown, Toa Payoh and Bukit Merah, as well as non-mature estates such as Punggol and Sengkang.

Since the MOP begins on the date the keys are issued, not all the households, however, would be eligible for the resale market this year, it added.

One owner whose MOP will be up this year is Mr Johnny Wan, 42, who balloted successfully and paid $330,000 for his four-room unit in Block 91, Tanglin Halt Road, in Queenstown. He now gets fliers from real estate agents who promise him at least $750,000.

'My friends called me crazy and said I could have landed myself a better deal elsewhere, maybe an executive condominium,' recalled the shipping firm manager of his decision to buy back then.

'But it's all about location to me, and I'm the one who's sitting on a tidy profit now,' said Mr Wan, who may sell his flat if the right offer comes along.

It is a few minutes' walk from Commonwealth MRT station and is among about 1,000 flats built as replacement units for those affected by the Selective En bloc Redevelopment Scheme.

Those living farther away, in non-mature estates, are also sitting on tidy paper profits.

Mr Roslan Salam, 34, paid $170,000 for his four-room unit in Punggol and moved in in 2007. A similar unit in a nearby block sold for about $500,000 in March. 'It was a lucky buy. When we first checked the area, not much had been built and it wasn't as busy. Times have changed,' said the auxiliary police officer.

'It's like striking a lottery,' said SLP International head of research Nicholas Mak. 'These buyers came in at the right time before the property boom when prices started inching upwards.'

To satisfy first-timer demand, the HDB has promised to ramp up supply, and launch 50,000 flats within two years.

Mr Mak noted that as the prices of new flats are pegged to market rates, albeit at a discount, another chance to cash out at such a significant premium is unlikely to happen any time soon.

In flat sales launched this year, for instance, the price of a four-room balance flat in Queenstown ranged from $505,000 to $613,000, while a unit in Punggol cost $257,000 to $333,000.

'The resale price index is likely to remain stagnant in the coming year, and any growth would be very small,' he added.

Meanwhile, astute real estate agents are tracking MOP dates to find out where to lobby residents to sell. ERA agent Chris Neo said the pickings were hottest in Strathmore Avenue two years ago and Redhill Road last year. 'Most flats that have their MOPs up this year are likely to make a profit. It's only a matter of how much.'

darylc@sph.com.sg
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#2
in siingapore, most people most news talked about tidy profits.
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#3
Unless you sell and migrate to a cheaper housing country, it won't be that much different. You have to sacrifice by downgrading to "ULU KLANG" in Singapore.TongueBig Grin
WB:-

1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.

Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.

NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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#4
Irrational exuberance can appears in many forms of assets and many countries.
Smile, laugh, as the people around you laugh at the stupidity of your opinions with the herd mentality of theirs.

If investing or trading is so easy, herd mentality would have made 90% of world billionaires.

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#5
(26-05-2012, 09:39 AM)Temperament Wrote: Unless you sell and migrate to a cheaper housing country, it won't be that much different. You have to sacrifice by downgrading to "ULU KLANG" in Singapore.TongueBig Grin

That remind me that valuation on a most companies should focus on earning, instead of net asset.

Similar as individual, you can be darm rich, with your only property worth millions. If you not able (or plan) to cash it, it remain as an expensive "collection" owned.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#6
Think if the owners sitting on 750K HDB, if they can get rental yield equivalent to that price, it's better not to sell, just collect rentals! Big Grin

PROVIDED, that rental yield reflects that 750K selling price.. Tongue
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
4) In BULL, SELL-SELL-SELL! 
Reply
#7
(26-05-2012, 03:36 PM)brattzz Wrote: Think if the owners sitting on 750K HDB, if they can get rental yield equivalent to that price, it's better not to sell, just collect rentals! Big Grin

PROVIDED, that rental yield reflects that 750K selling price.. Tongue

If the HDB is self-occupied, then owner are the one paying the rental Big Grin, which is the "oppurtunity cost".

If the HDB is rent-able, if gross rental yield < 5%, then it is better to sell then to hold it. The $ can generate better yield elsewhere easily.

To fulfill the gross 5% yield, the HDB of 750K need 3.125K / month rental. It is possible base on my knowledge for 4-room HDB Tongue
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#8
(26-05-2012, 01:27 PM)CityFarmer Wrote:
(26-05-2012, 09:39 AM)Temperament Wrote: Unless you sell and migrate to a cheaper housing country, it won't be that much different. You have to sacrifice by downgrading to "ULU KLANG" in Singapore.TongueBig Grin

That remind me that valuation on a most companies should focus on earning, instead of net asset.

Similar as individual, you can be darm rich, with your only property worth millions. If you not able (or plan) to cash it, it remain as an expensive "collection" owned.

Yes! Even earnings, there are earnings and there are earnings. To do a proper thorough valuation of a company is indeed quite demanding & difficult. Not to mention all the other "factors" which may need to "qualify" too.TongueBig Grin

(26-05-2012, 04:25 PM)CityFarmer Wrote:
(26-05-2012, 03:36 PM)brattzz Wrote: Think if the owners sitting on 750K HDB, if they can get rental yield equivalent to that price, it's better not to sell, just collect rentals! Big Grin

PROVIDED, that rental yield reflects that 750K selling price.. Tongue

If the HDB is self-occupied, then owner are the one paying the rental Big Grin, which is the "oppurtunity cost".

If the HDB is rent-able, if gross rental yield < 5%, then it is better to sell then to hold it. The $ can generate better yield elsewhere easily.

To fulfill the gross 5% yield, the HDB of 750K need 3.125K / month rental. It is possible base on my knowledge for 4-room HDB Tongue

If your HDB is a freehold condo then even 2.5% to 4% yield is O. K.
My youngest brother has been smart enough to exchange his HDB flat for a freehold condo in Hill View 35 years ago. Today after so many years, it's value is easily greater than $1 million. It's another way of investing for retirement when you are young.
Me, my 4A HDB flat is already 18 years old worth about 450K+ in today market. If i don't have the capital to exchange it for something newer or freehold soon, then i am stuck with this "depreciating" asset lol. But i am happy with the floor area. Beside an MRT station, 2-stone-throw away will be ready in2016/17 (Downtown line). Maybe i still have some time to consider.Smile
WB:-

1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.

Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.

NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
Reply
#9
after the downtown line is up and running, ur 4A HDB Flat will be worth more liao... Big Grin
itchy finger to sell!
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
4) In BULL, SELL-SELL-SELL! 
Reply
#10
(27-05-2012, 10:24 AM)brattzz Wrote: after the downtown line is up and running, ur 4A HDB Flat will be worth more liao... Big Grin
itchy finger to sell!

Smile Ya! By then my fingers may get itchy. Especially if there are people come knocking at my door. Who really knows the future though it seems going to be?Tongue
WB:-

1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.

Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.

NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
Reply


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