HDB flat prices: Affordable to who?

Written by Ng E-Jay
16 December 2009

Minister Mentor Lee Kuan Yew said at the [email protected] handover ceremony last Sunday that HDB flat prices can be expected to keep on rising as long as the economy continues to grow.

He also said that the “HDB will continue to build affordable homes of good quality, so that each generation of Singaporeans will continue to have a stake in the nation“, which is somewhat of an irony given that the [email protected] flats are the priciest in the whole of Singapore, fetching up to $650,000 (source).

In his address, MM Lee said that the movement towards a market-based pricing system for HDB flats has allowed HDB prices to move in tandem with the economy, thus unlocking the value of HDB flats and allowing citizens to share in the fruits of the nation’s growth.

In reality, such a market-based pricing system is flawed as it subjects HDB flat prices to volatile swings in the private property market. It also makes a mockery of the Government’s position that HDB flats are subsidized for citizens because by allowing HDB flats to rise in tandem with private property prices without any upper limit, the HDB still makes a tidy profit even after the subsidy and first time home buyers have to bear the brunt of a market escalating out of control.

The Government has sought to make home ownership the cornerstone of nation building. In the past few years however, the huge influx of immigrants as well as unregulated foreign fund inflows have contributed to the escalation of property prices, gradually pricing born and bred Singaporeans out of the market.

In 1963, the then Prime Minister Lee Kuan Yew threatened voters that if he was not elected, the two Duxton Plain rental block of flats then under construction would not be completed and voters would have a “bleak future”. (Straits Times, “Flat prices will rise but still be affordable“, 14 Dec 09)

Today, voters are being threatened with lift and flat upgrading programmes that can be withheld at will if Opposition candidates are voted in, despite the fact that they are taxpayers like all other Singaporeans.

Today, the [email protected] stands in place of the basic 10-storey rental housing blocks built in March 1963, not as a shining example of the success of home ownership, but as a testament to how the PAP Government has gradually lost its sense of responsibility towards citizens over the years.

9 comments on HDB flat prices: Affordable to who?

  1. $650 000 over 30 years means about $1800 per month. Even if one takes a concessionary housing loan from the HDB, the total housing debt would balloon and we would be paying more than $2000 per month. Affordable indeed. Uniquely Singapore!

  2. Take up rate is 100%. Apparently, ppl find it affordable(despite the hefty price). I am confident these lucky owners will one day thank pap, if they had not already,for handing them a lottery ticket.

  3. Typical for room flat: SGD$270,000 – $300,000.
    Government already earns alot with this cost price of the flat.
    Average Singaporean citizen will not be able to afford this. Thus have to get bank loan with average 2% interest per annum.

    Per year, citizen pays bank/government interest SGD$300,00×0.02 = $6000.

    Citizen has to take up to 30 years loan.

    $6000×30 years = $180,000 (purely interest fees)

    Total amount Citizen paying for the house = $300,000 + $180,000 + misc fees etc = about $500,000.

    $500,000 divided by ( 30 years x 12 months ) = $ 1388 per month.

    Citizen has to pay bank/government almost up to $1400 per month for 30 years.

    Crazy isnt it?

  4. >> PAP say:

    – In 2000, although the Total Breakeven Cost of a HDB 5-rm new flat was around $120,000, we will not “help” first-time buyers (young couples) by selling to them at such a “cheap price”.

    Instead, under our “market-based pricing policy”, we will set the Selling Price of the 5-rm NEW FLAT at $200,000 — which is $30,000 lower than the $230,000 prevailing Market Price of a similar 5-rm RESALE FLAT.

    This way, HDB can then proudly say your new flat is “HEAVILY SUBSIDIZED with a so-called MARKET SUBSIDY of $30,000″.
    To tell the truth, there is actually NO CASH SUBSIDY given at all — and the HDB is really making an OBSCENE PROFIT of $80,000 for each flat sold !!!

    [ You have no choice but to accept that we need to suck the people’s hard-earned monies through such cunningly-clever political trickery — so as to pay for our OBSCENELY-HUMONGOUS million-dollar salaries/bonuses/Pension/CPF/other perks ]

    [ Our definition of “affordability” is based on a loan period of 30 YEARS i.e. you will have to “work like dogs” for 30 YEARS to pay off the loan on your “obscenely-priced brick-and-cement pigeon-hole”. ]

    >> S’POREANS say:

    At the next General Elections, WE will stiffen our resolve to VOTE AGAINST THE PAP and on account of the $2m Minister Mah Bow Tan for such political trickery !!!

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