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On HDB Housing Related Thoughts. Again

So I saw one of my Facebook friend shared out this article titled Stark Reality: Singaporeans Waking from the Housing Dream.

It was written in Jun 2017. And it is long.

This article provides:

  1. History of the role of public housing
  2. Narratives by various parties on this issue over the years
  3. Questions from the public regarding the mix signals they are receiving on this leasehold condo-rum
  4. Not being inclusive due to the stringent rules
  5. Housing affordability versus other countries, with our higher cost of living and large contribution to social security
  6. An attack on my friend 15 Hour Work Week and his Wife
  7. Housing size have shrunk
  8. Where the profits from land sales is going and its accounting and reporting by the government
  9. CPF and Housing
  10. The social, economic and political implication of the HDB

The article have a negative slant against the incumbent government, but I do acknowledge its good to read through the various data points that I might have missed out previously.

I think its too long and like Roy Nerng’s article previously, tries to tie everything to the concept of HDB flats (or perhaps everything is tied to HDB flat…..)

There were some reinforcements and some new things that I picked up.

I will definitely missed out something, as I won’t identify with everything that was written. (you can leave a comment for those portion that you identify with)

Let me go through them.

The freaking confusion whether the leasehold HDB is an asset that will appreciate or will be zero in value in the end

There are so much conflicting narratives among the incumbent government over whether the home is an asset:

  1. Mr Goh Chok Tong, Mah Bow Tan, Lee Hsien Loong have in the past use the appreciating value, or potential of appreciating value in our leasehold homes as evidence of Singapore Success
  2. Mr Lawrence Ng and Khaw Boon Wan, both being ministers in control of the housing board, have sought to caution against linking price appreciation, growth of asset value of HDB for leasehold flats

My conclusion is that people cannot accept the fact that their flat’s value can be rather volatile. And it has become such an important part of our lives.

My understanding of this situation is this:

  1. It starts of as subsidizing housing so that many people can get homes
  2. It as always meant to be a leasehold with an expiry date and value
  3. Somewhere down the line, there are embedded goals to the home ownership. And thus the home prices are linked to private property value, and the demand and supply levers are systematically controlled
  4. Then somewhere down the line, the mismatched between, home value, cost of living, and social sentiments become too much. So they have to manage this situation if not there will be greater social problems then the wealth created
  5. However, at this point, the narrative of home as an ever growing asset that you can monetize safely without much efforts is sold too far that people’s net worth are so concentrated in one asset class that changes cannot happen easily
  6. The right way is to do what a lot of the opposition have said all along. Link the prices to either a percentage above cost, median income and treat home ownership as a form of survival. In this way, the money will flow into other areas and the people won’t be so concentrated in one asset class. But this train have gone down too far and drastic turns will just crash it

Using HDB as a Controlling Factor

An old narrative by the late Mr Lee Kuan Yew may provide the insight of the secondary role of home ownership in Singapore:

2000: He said: “My primary preoccupation was to give every citizen a stake in the country and its future. I wanted a home-owning society. I […] was convinced that if every family owned its home, the country would be more stable.”

The late Lee continued: “I had seen how voters in capital cities always tended to vote against the government of the day and was determined that our householders should become homeowners, otherwise we would not have political stability.”

But the late Lee continued: “My other important motive was to give all parents whose sons would have to do national service a stake in the Singapore their sons had to defend. If the soldier’s family did not own their home, he would soon conclude he would be fighting to protect the properties of the wealthy. I believed this sense of ownership was vital for our new society which had no deep roots in a common historical experience.”

People are Inherently Suspicous Can Pay Off Your HDB Flat in 10 years

The article managed to pick out my good friends, the couple at My 15 Hour Work Week’s interview in Straits Times.

And the comments felt that this article is politically motivated!

The Straits Times reported, “freelance tutor Thomas Zhuo and project manager Jasmine Ong “lived like students” in their 20s, putting aside more than half of their take-home pay so that they could get their own home by the age of 27.”

It added: “At 27, they got the keys to their Built-To-Order five-room Housing Board (HDB) flat in Punggol. They have enough savings to pay off their 30-year housing loan of S$230,000 today, should they need to.”

In order to do so, they “would spend S$30 a week on food, [… and] cut down on movie dates and went on one or two holidays a year. […] They used to spend S$10,000 a year on holidays, but have cut that down by half to save for the renovation.”

On The Straits Times Facebook page, where the article was shared, at the time of writing there were more than 2,300 reactions and 1,384 shares, with many of the 392 comments lambasting the paper.

Ron Ng said: “[Please] report something that [the] majority of us are facing rather than the rare ones. Face it la[h], living in [Singapore] is [expensive], [I am] not complaining but stating the fact.”

“This article is just another [government] propaganda,” Paul Tham also commented. “The numbers don’t add up and it’s beyond belief to survive on just $30 a week.”

In a comment that has received 367 reactions, Vincent Tay did his own calculations and estimated that to be able to save S$230,000 in 4 years, the couple would have to save S$57,500 a year or S$4,791 a month. He said: “they must have high income[s] and no commitment. If your income is [S$5,000] then why not[?] How many people take back [S$5,000] per month[?]”

Debbie Takumi also did her own calculations and estimated that, the couple would need to “save approximately [S$2,400] each a month in order to pay off their loan in 4 years. That’s more than what an average [S]ingaporean earns… even by working [l]ong retail or shift hours, the average pay is around [S$2,000] excluding commissions. So that’s fairly hard for the average citizen to achieve that kind of monthly savings.”

Of course, the S$230,000 figure accounts for only the housing loan. Where the couple would have needed to pay between 10 percent and 40 percent in down payment, the flat would cost them between S$250,000 and S$390,000.

But as Tay opined, “how many people take back S$5,000 (US$3,620) per month?” In fact, the median wage in Singapore was only S$3,467 (US$2,500) in 2015. Worse still, there were still 8 percent of Singaporeans earning less than S$1,000 (US$720).

Firstly, if you get interview by Straits Times (or other publications), do be aware that it might not be the way you want it to turned out. So these reactions are pretty normal.

I think there is a mistake that they live on $30/week food. I know the 2 of them eat a lot to fill up their big stomach.

Like my friend Chris from TreeOfProsperity says’ some Gen Xers’ have a suspicion how people can do so well in life.

And you can see, what we are all afraid of is perhaps not whether this article is genuine but whether they can live up to this expectation in their life.

The stories of those folks owning many properties are good for them, because these folks are so far off that they belong to another class of people, the elites. This is the people they aspire to reach.

Thus Me and My Money did a good service by getting so many property owners and business owners to share their experience to be inspired.

Now those people that are closer to you, you feel threatened.

You cannot fathom how come given the same situation, they end up so far off and not having that sum of money to pay off.

So they must have some form of privilege.

And in my opinion, they DO have privilege.

That does not mean you do not have that same privilege.

I am sure they are not the one who:

  1. did well in school to get 2 good jobs
  2. don’t have student loan debts (I am not sure if they have)
  3. manage to get a BTO Flat

The difference is that they decide to save more (and note, its not like they are making some ridiculous amount of money) and live like university students. And the good thing is some folks actually worked out the amount to save.

Is it possible to save $55,000/yr, $24,000/yr each? As bloggers we have shown that young adults in various industry are able to do that.

If you cannot, it means that you need a longer period of time to save that amount.

Why compare to the 15HWW?

You just want to measure where you are. So you have your answer. You have not saved enough period because either you have not earned enough, have not optimized expenses enough.

We cannot hide the fact that this Singapore society currently is bias towards being well educated, and those stacked with valuable competency. This will create a bigger divide and the middle class will be split up.


Some of my peers do not earn so much.

My working environment are the ones trying to fight hard. But I always tell them, if your wages grow at 3%, and you only get 1 month of bonus, the couple in 10 years will have $950,000.

You need to think about what you wish to do with that sum of money. Don’t tell me you cannot prioritize clearing the mortgage in 10 years.

I have seen people not able to save money, but once their CPF gets dump into their HDB, the monthly payment becomes $300/mth each on their CPF contribution only.

If you get a large BTO flat, and you say the home is expensive, you have to realize you chose to do that due to your circumstances and are willing to take a step down.

When my parents moved into a 3 room Yishun flat in 1980 for $29,000, it is because they cannot afford a bigger place, they cannot afford a place closer to the East side, where all the relatives are. It must be a struggle for my mom back then.

Now how similar is this to a lot of people’s situation? It hasn’t changed much in 37 years. There are some decisions you need to make in life.

What kills most of us is that the government cannot give us a 5 room flat, that is affordable even for those earning below the middle income, that is close to our parents and near amenities.


While I am aware that it is rather slanted, its good to see the narrative pieced together. The writer did revisit some of the old comments such as the ones made by S. Rajarathnam on money.

There are some good points on the transparency on the earnings from land sales but there are also something misleading on HDB grants and accrual interest on CPF.

I think if you treat CPF as a danger zone, anything that is tied to CPF is going to be something negative.

As a Singaporean, I hold a balance view.

You watch out for your family and yourself, equipped well, don’t get into a state where you depend on the establishment for help or have so much stuff tied to the establishment.

Build a life that has some levers to pull in case some policies don’t work out perfectly.

I find it possible that policies would change, most likely after these old guards are gone. Singapore might look a different place in that scenario.


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Wednesday 10th of January 2018

Hi Kyith

I"m sorry to see the negative comments and personal attacks questioning the achievements of M15HWW. I thought it would be insprirational! Haha, but that's just optimist.

You hit the nail on its head too that they're just voyeurs when looking at billionaires but when faced against a more "average" peer who have achieved something they THINK is impossible, their inner voice pushes back so they preserve their sense that nothing needs to change on their part. I forget the NLP terminology for that (Ms.K is the expert coach) but it's always surprising how the mind works.

Is housing more expensive than 10 years ago? Undoubtedly, let alone 20 or 30 years when compared to a generation ago. Is the HDB price to median earnings ratio higher than before? I don't know...some statistics would be useful.

Btw, to the comment above that millennials are spending too much on avocado toast instead of me even yakun is kinda higher priced for local coffee. Haha. I'd go to the hawker for my regular cup and only sometimes to the better joints when joining friends. :D


Wednesday 10th of January 2018

I had the same thoughts about Yakun but hey its really much cheaper. The impossible feeling is real and sometimes I do have it when i hear someone mentioned you need $2 mil to safely retire. I am so far off that, and I can feel my brain shut down and think its impossible. But if I think intently, a growth rate of 8% from this point onwards for the next 10 years might do it. not so far fetch after all. We all shut our brains from the maths sometimes when things are too daunting. We have to sometimes force ourselves to do the sums.


Tuesday 9th of January 2018

Hi Kyith,

I think this topic touches on lots of nerves. Unfortunately, every generation will complain that the generation before them had it better. I did my fair bit of complaining when I was a undergrad, till I figure out it's best I just get on with my life and work towards my goals.

Yes, HDB housing is expensive... however, if you consider it from another point of view. If you got your BTO for $250K and use just a simple straight line depreciation, you are only paying $210/month for a 4 room flat as "rental". And this can be used to house both your family when you are young as well as pass to one of your kids when they get old. I am not sure where else in the world you can have such a "great deal" for renting a decent area for $210/month.

As for the savings, it is entirely possible.. but only if you a graduate who works hard (meaning you have a decent starting income) and are willing to be very thrifty. I was trained as a Chemical Engineer and by the time I was 30, have saved more than $200k alone (without help from the Mrs). I also paid off my HDB within 10 years cos' I like to have zero debt when I am in F.I.R.E.

Too many millenials want to have their cake and eat it too.... Think "$15 avacado toast" when Yakun Toast at 1/4 the price would do just fine, you get my point.

One always need to think 20 years ahead and plan accordingly.

When I was starting out in 97/98 when I was 25, the Asian crisis started.. I looked out 20 years and saw middle aged men in their 40s losing their jobs left and right... and have no ability to finance their lifestyle, that's why I plan my whole lifestyle in the last 20 years with the single goal in mind that I will not need to work at 45 if I don't want to.

Now if you look at those in their 65, they barely have enough moneh to make ends meet even if they survived working successfully from 25-60... all their assets are tied in houses... which they cannot liquidate easily... also they spent their whole lifetime paying for it... they suffer from endowment bias... hence they cannot and unwilling to sell and fund their retirement... that's y you have ppe. going on newspaper complaining that they have zero cash flow at 65... while living in the landed property.. 🤷‍♂🤦‍♂

Their whole identify during their working years is "I stay in private property which shows I am better than most ppe... and have achieved more"... if they have to sell now, the whole carefully crafted and protected identity will crack... this in pyschology is known as cognitive dissonance... so they will never do that... cos' to do that is to admit that they have failed.

Another very long post from me. Thanks for reading it.

Regards, TBL


Tuesday 9th of January 2018


Thanks for sharing your thoughts. It seems chemical engineering back then was much better than it was now. I do believe there is a whole class system involve when it comes to private property. It used to be less prevalent, now its more, especially when you get into the 30s working in an MNC.Funny i also sometimes look at the HDB in that rental concept.


Monday 8th of January 2018

I'm biased ... I think most of the online gripes are by millennials ... most Gen X'ers have either made it good or at least OK. Hell, many Gen X'ers were able to pay off their 1st HDB within 5-10 years (I did it in less than 3 -- many people said I was stupid to do so). This is based on my own experience, colleagues, friends, as well as millennial classmates (I attended a PGDip programme recently at a local polytechnic).

Actually there shouldn't be any confusion over HDB flats...

1. Can it appreciate? Depends. It can appreciate ... it can also depreciate. For a mature property market like S'pore is today, home prices basically follows the overall inflation/deflation metrics and economic performance of the city. As long as there is a positive bias to S'pore's economic performance over the long term, HDB flats have high probability for price appreciation over medium term of say 20-30 years. Pretty much like stocks.

If you're talking about outsized returns ... then for a mature property market ... you need to get it when there is a big market dislocation ... just like mature stock market. Not so easy when you're talking about matrimonial home, unless you're prepared to make a lot of domestic & social sacrifice that 99% of people cannot (e.g. delay marriage or stay with in-laws or buy the cheapest possible flat when prices are high). Note that price dislocations can occur on the upside as well as downside i.e. bubbles.

2. Do HDB flats go down to zero? Of course. That's what leasehold means ... same meaning as what the British bequeathed to us since before WW1. However do note that HDB flats are leasehold on flat, and NOT leasehold on land. Which severely limits what HDB buyers can do to mitigate the negative effects of very old flats e.g. >50 years old.

As for CPF, I've always believed that govt made a big mistake by allowing it to be used for private properties & resale HDB. Just to solve a recession & help out the banks and property developers...


Tuesday 9th of January 2018

Agreed in general. the Gen X got it better than the Gen Y. But that's kinda the trend globally, if you see how the Gen Y/millennials in US are suffering post financial crisis. Perhaps, the issue is not just the financial crisis, but how technology has started to make much of the middle income jobs more obsolete.

Just to add, i think they are 31 last year (2017), means they got their keys in 27 (2013) and probably participated in the BTO 3 years earlier (i.e around 2010). HDB resale prices spiked up significantly in 2009 onwards, so the house they gotten would probably have been ~40% more expensive now. This does not include the BTO "discount" that was given by the government If you account for the lower salary increase over the years, a house bought 7 years ago is certainly way more affordable compared to a fresh graduate today, in a price/annual pay ratio.

Technically, i believe they started saving since 2010 when they won the BTO. This is what almost all the friends i know have done, which meant they had 7 years to save up for that SGD 230,000. I also believe, given how thrifty they are, they probably were teaching tuition during university and saved up even before marriage. Assuming SGD 3000 per month x 13 month (1month bonus) x 2 person x 7 years = SGD 546k. Having SGD 230k of savings is less than 50% savings rate. Besides, as a private tuition teacher, he probably don't pay taxes. And the article is further unclear if the 230k includes the OA in their CPF.

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