My Rambling Thoughts

Depreciating day by day

News: There is still value in older HDB flats

Date: 17 May 2018. Source: CNA.

There is still value in older HDB flats which can be unlocked for retirement, said Minister for National Development Lawrence Wong in Parliament on Thursday (May 17).

Speaking during the debate on the President's address, he said there have been concerns about the impact of lease expiry on HDB resale prices.

Quoting transaction data over the past year, he said that an older 4-room flat with less than 60 years remaining on its 99-year lease would sell for around S$300,000 and a 5-room would sell for around S$400,000 in non-mature estates.

For flats in more popular locations, prices can be significantly higher, he added. "So the transacted price depends not just on length of remaining lease, clearly, but also many other attributes," he said, adding that factors like location, storey height, and the condition of the flat are all relevant.

Whatever the price, the sales proceeds would be "more than sufficient" to purchase a smaller flat, he said.

There is no sugar coating this. Once the lease hits the magic 60 years left, a whole bunch of restrictions kick in and it reduces the appeal of the flat.

The most restrictive rule is the max CPF. For a 30 year old, the calculation is as such: (59 - (55 - 30)) / 59 = 57.6%. He can only use 58% of the max allowed CPF. He won't feel it upfront, but he will need to use cash to pay his installment much earlier.

It'll take another 3 to 5 years before this fact sinks in.

The other rule that age + remaining lease >= 80 years will only be felt when the lease has 45 years left. It restricts buyers to 35 and older. :-O

Will prices come down much? Maybe not. Suppose you buy a 30 year old flat at $700k. Ignoring interest (which is substantial), it works out to be $10k a year, or $833/mth. It is much cheaper than rental.

HDB flat ticking time bomb

News: Old HDB flats: Assets losing their value?

Date: 13 May 2018. Source: CNA.

When Mrs Y L Dong and her family moved into their resale five-room Housing Development Board (HDB) flat 20 years ago, she was certain they had found their ideal home. The Ang Mo Kio apartment may have been 17 years old, but its age did not bother her.

"We have all the necessary conveniences like coffee shops and wet markets nearby. It's a really friendly neighbourhood with a cosy feel and it is also really convenient to get to town from here," she said.

But last year, when she approached a property agent with the intention of selling her flat, the response was poor.

"After realising that the lease of the house was reaching its 40-year mark, most buyers weren't keen at all. They were afraid they might not be able to sell it off in the future," said the housewife who has two teenage children.

"Even though the flat is spacious and opposite Bishan Park and near prestigious schools, no one wanted to buy."

Oops. Lease expiry was never a problem until Lawrence Wong brought it up last year (Mar 24). Then suddenly it was.

Personally, I think HDB will have to extend the lease by 50 years at least due to the high number of expiring HDB lease within the same time frame. However, the Government is purposely quiet on this issue now because it fits in their agenda to force HDB prices down.

It is not well known, but there are loan restrictions once a HDB flat has less than 60 years lease remaining:

  • Can use CPF only if age + remaining lease >= 80 years
  • No CPF can be used if remaining lease < 30 years
  • Max CPF = remaining lease when owner turns 55 / remaining lease at point of purchase

Wow.

Also, banks will typically loan until 35-years lease. In other words, no bank loan if the lease is shorter than that. Also, if the lease has 50 years left, you can only take a 15-year loan.

Let's see who still dare to buy old properties. :-O

What this means is that once a property has less 60 years lease left, it should (i) have a marked discount (maybe 20%?), (ii) start to depreciate (linearly?) yearly.

Wind of Change

First transfer of power since Malaysia's independence (1957).

The people has spoken. Najib is too scandal-ridden.

Two other factors that greatly increase the opposition's chances:

  • For the first time in history, the major opposition parties (other than PAS) banded together. Unity is strength
  • Dr Mahathir

Najib was still expecting the rural Malays to support him, but they did not. It was their swing that made the difference. I attribute it to cost-of-living (GST) and Dr Mahathir.

Mission accomplished?

PS: now is the best time for Najib to find out who are his real friends. :lol:

Go back save my country!

Country in ruins! I have duty, 9th of May, rest for a day.

So you want to design an eyepiece?

The Pentax SMC XW eyepieces. Introduced in 2003. Designed for day-time spotter scopes, but are also excellent for astronomical use. 70 degrees FOV. 20mm eye-relief. Weatherproof body.

Minimize Rectilinear Distortion (RD) at the expanse of Angular Magnification Distortion (AMD) and Field Curvature (FC). 14mm onwards suffer from noticeable FC.

The 2" eyepieces — 30mm and 40mm — were discontinued in 2013. 3.5mm and 5mm EPs were discontinued in 2016.

We can see the common design pattern: a mostly identical main lens group with a smaller lens group for magnification and correction.

The 3.5mm and 5mm EPs have the same main lens group. The 7mm, 10mm and 14mm EPs are the same, but with different thickness and an additional corrector lens. 20mm EP has a yet thicker lens.

The 30mm and 40mm EPs have a totally different design. Both have the same basic design, but the proportions are different.