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Mr Mah, Housing Minister or Property Agent?

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You can’t be straddling two boats with a foot on each. 

Are you not on the wrong ball with your fixation on ‘Asset Enhancement’ of HDB flats? It is a great disservice to both current HDB residents and new buyers of HDB flats.

Here is why:

HDB residents wanting to upgrade because their families have outgrown their small flats or whose financial position have improved, would not thank you for making their next HDB purchase much more costly and as a result difficult to reach. A two-decade mortgage repayment has now ‘blossomed’ overnight into three decades. Now who needs that?

Market prices tend to be relative. So even if you can sell your existing flat for more,   you would also have to pay more, possibly much more with inflation, for your upgrading.   So-called asset enhancement cuts both ways. This is a no brainer.

For the great majority, the HDB flat they buy is likely to be their first and last home purchase. Asset enhancement makes not an iota of difference to them or their physical condition or surrounding. So we have a situation which benefits mostly the investors, local and PR, and some who genuinely are able to upgrade from the heartland to private properties. But, don’t forget, whoever they sell their HDB flats to are the ones who have to carry the inflated prices.

At the end of the day the upward spiral of prices can only work to the detriment of Singaporeans who depend on the HDB for a roof over their heads. Already, many have voiced their concern  aloud that given the current trend, HDB housing may well be beyond their reach when their turn comes. At best it would be a lifelong burden just to pay off HDB mortgages. That is a prospect that nobody relishes given the many opportunity costs that it would demand.

There is a conflict of interest as minister in charge of the HDB (public housing) to involve yourself in a way that pushes the prices of HDB flats skywards. The gold standard measurement for your job says it should be precisely the opposite. Bluntly put, asset enhancement, should be none of your business as housing minister. Your job is to provide decent, good public housing at the lowest prices consistent with stated govt public housing objectives.

On it being a retirement fallback, imagine this scenario:Hundreds, perhaps even thousands, of aged Singaporeans well into their twilight years would be calling for their nest eggs according to ‘gameplan’ at about the same time (we are, after all, an ageing population, no thanks to a stop-at-two population control policy which turned inimical because the govt failed to keep track). Simple law of supply and demand would dictate prices. Their flats would have aged too which would affect asking price as well. Is it inconceivable that the much vaunted theoretical nest egg could possibly shrink by then to the size of a quail egg? Hopefully, it would not turn into a ‘duck egg’ because of the glut of ‘eggs’ in the market!

Prices of HDB leasehold flats cannot go up forever. It is a fundamentally flawed premise because even the value of leasehold private properties would fall when the ‘end’ is near, so to speak.

If HDB have set the correct pricing policy (providing buyers with GENUINE subsidies) it would have discharged this part of its responsibility admirably, of providing truly affordable public housing.

After decades of silence and mealy mouthed dodging, the truth is out that the so-called HDB subsidy is in truth a PAP govt myththere is no real subsidy, there never was. HDB’s ‘subsidy’ is actually little more than a paper exercise. From what could be gathered, HDB merely pegged its prices x% points below ‘market’ prices and tell the world that it is providing ‘subsidized’ housing to its citizens. It is also a puzzle how HDB is able to do this, since it is unique, with no parallel private property development comparable with it.

The correct nomenclature for what HDB is doing is the word ‘DISCOUNT’. A Discount is very simply a price reduction from a perceived or asking price. This accurately describes what the HDB is really doing. On the other hand, a SUBSIDY involves an act of altruism, an act of giving financial aid or grant where the giver pays from his own pocket some of the cost to help you.

But, in the case of HDB flats, the govt actually made millions if not billions of dollars of profits from selling them to Singaporeans who bought them using their CPF.

 To mollify the discontent and unhappiness generated by escalating HDB prices, the govt floated the nebulous idea of ‘Asset Enhancement’ – feeding people’s greed by dangling an illusory pot of gold at the other end of the rainbow. 

At the heart of the present runaway galloping prices of HDB flats is this blurring of the line between HDB housing and private property development. To date the govt has done precious little to positively address the plight it created for thousands of families esp. low income families caught in the vicious grips of unemployment, reduction in wages, high inflation  ultimately affecting their ability to service the mortgages.

 N.B. The author has no affiliation with any political party. He was an admirer of the PAP until it became evident that it has changed beyond recognition and no longer bear any semblance to the party that he had originally once admired. He feels it his duty to point out that the country is going down the drain if current trends continue unarrested.



  1. S.Mohan says:

    Very well written. I wonder how many Singaporeans realize it and translate into votes. Now , awareness is much better than ever but I still doubt the monkey brain of Singaporeans. They lament and complain incessantly but when come to vote they behave idiotic. They still fear about PAP tracing their votes. After seeing so many people voting freely and nothing happened. So LKY have done a fanastic job in brain washing this fruit cakes. Hope they realize before it is too late.

  2. Alan Wong says:

    I think what you have brilliantly written has nailed them right in the coffin. Our PAP govt is simply turning all our govt agencies, stat boards and restructured hospitals all into these money-grapping monsters under the name of public service.

    Just look at the way how revenue are being generated/collected by agencies like LTA (COEs, ERP), URA & HDB (Land sales), MOM (Workers Levies), CRA (Gambling Levies), etc.

    They give us S$40k housing grant but at the same time they put in a couple of S$100k mark-up (my guess is just as good as yours since they won’t dare to reveal us the actual figure) for the land cost per unit. And then they BRAG to the whole world that our public housing is second to none.

    What a joke for taking all of us for a ride !

  3. […] So: Mah Bow Tan is “Proud” of the Asset Enhancement Policy – Thetwophilo’s Blog: Mr Mah, Housing Minister or Property Agent? [Thansk Lee] – My Sketchbook: Master or servant? – ST Forum: Affordable housing is Govt’s […]

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