HDB is NOT an Asset

[Arcachon]

As long as it can provide a roof for people to reside, it's considered an asset. Don't need to be rented out

The Late Dennis Ng use to quote the above sentence.

[kane]

HDB flats is an asset as long as govt allow the resale HDB price to rise.
HDB flats become a huge liability for most singapore citizens if HDB property prices become stagnant or even falls!

i've another condition, nevermind the fluctuation in the principal value, as long as there's SERS, HDB is an asset.

[seletar]

It's a good thing that the first property I bought is a new flat directly from HDB, back then it was so affordable that me and wife did not even need to take a loan to buy it, we paid in full with our CPF. And the flat location is good as it is next door to an underground MRT station (1 minute walk). The flat is easitly worth over 3 times what we paid for it. But I cannot bear to sell or rent it for sentimental reasons, instead I use it as a second home so that my kids experience HDB living.

Of my properties, the HDB is the most value for money and an asset. But for the younger generation who are faced with higher new flat prices and even higher resale flat prices, HDB may not be as much of an asset other than a roof over their heads.

[Allthepies]

As long as it can provide a roof for people to reside, it's considered an asset. Don't need to be rented out

financially it is still a liability

[DC33_2008]

It is quite a hefty opportunity cost. Otherwise, you will have at least $2000 monthly income.

It's a good thing that the first property I bought is a new flat directly from HDB, back then it was so affordable that me and wife did not even need to take a loan to buy it, we paid in full with our CPF. And the flat location is good as it is next door to an underground MRT station (1 minute walk). The flat is easitly worth over 3 times what we paid for it. But I cannot bear to sell or rent it for sentimental reasons, instead I use it as a second home so that my kids experience HDB living.

Of my properties, the HDB is the most value for money and an asset. But for the younger generation who are faced with higher new flat prices and even higher resale flat prices, HDB may not be as much of an asset other than a roof over their heads.

[Jonathan0503]

financially it is still a liability

Why would it be a liability if it's fully paid?

Also, even if the flat is bought through a loan, as long as the loan amount is lower than the value (should be the case, else which bank or financial institution will lend you?), it is still an asset

[Allthepies]

Why would it be a liability if it's fully paid?

Also, even if the flat is bought through a loan, as long as the loan amount is lower than the value (should be the case, else which bank or financial institution will lend you?), it is still an asset

Never treat ur home as an asset

[teddybear]

In current economic scenario, only physical home is an asset! Paper money and bonds will get hit with massive depreciation going forward with more QEs (aka paper money printing) coming our way from China, US, Europe and even Japan!

Never treat ur home as an asset

[Allthepies]

In current economic scenario, only physical home is an asset! Paper money and bonds will get hit with massive depreciation going forward with more QEs (aka paper money printing) coming our way from China, US, Europe and even Japan!

As in usually only investment property is considered an asset. Our roof is classified under liability

[teddybear]

Not true. Our roof is also an asset as long as when we sleep in them, they are rising in value every year.
Sooner or later you think you don't need say a 3BR unit and willing to downgrade to small studio after all your children don't live with you anymore, you can still take out extra cash from your existing roof for a comfortable retirement due to appreciating value.

As in usually only investment property is considered an asset. Our roof is classified under liability

[kane]

If the rental rate is higher than the cost of ownership. Should it still be regarded as a liability becausethe alternative to self ownership is even more costly.

[Jonathan0503]

Never treat ur home as an asset

Maybe you might want to check under accounting/financial term, the definition of Asset.

Simplify put, it is something that has future economic value. Economic value can even be intangible or non-quantifiable.

So even if the flat is not tenanted, the owner is still able to derive value out of it because it is providing you with a place to stay.

Think of it as if you don't have this flat, you will need to pay a rent to have a place to reside. So you need to folk out cash

[Jonathan0503]

If the rental rate is higher than the cost of ownership. Should it still be regarded as a liability becausethe alternative to self ownership is even more costly.

Ok, assuming you have a 5-rm hdb costing $500k and taking a worst case scenario where you take 100% loan (not possible but let's just assume u can).

At current interest rate of say 1.5%, annual interest will be $7,500 or $625 per month. How much can u rent out a 5-rm hdb now?

Based on this same example, if say rental for a 5rm flat is around $3k per month, you will need interest rate to be > 7.2% before it becomes a negative return. But what do you think will be the value of this flat and the rental when interest rate is at 7.2%?