For a third time in a week, HDB was forced to issue another blanket reassurance to disgruntled Singaporeans that HDB flats remained affordable except this time, the letter to the Straits Times Forum was not penned by its Deputy CEO, but two deputy directors from HDB and URA.
The writers claimed that the government is committed to ensuring that public housing remains affordable to the majority of Singaporeans through “proper targeting of subsidies and calibrating supply to match demand.”
The income ceiling ensures that the Government’s limited public housing subsidies are given to those who need them more. At the current ceiling, about eight out of 10 Singaporean households qualify for housing subsidies.
What was not mentioned that the income ceiling of $8,000 was put in place 15 years ago in 1994 and it does not factor in the fluctuating bank interests, change in income and inflation over the years.
It also does not answer the key question whether a couple will have sufficient savings left in their CPF for their retirement at the end of the thirty year tenure.
They added that those with higher incomes can buy HDB resale flats, where there is a wide range to suit varying budgets. For example, if a household with a monthly income of $10,000 buys a five-room resale flat in a non-mature estate at the average price of $364,000, only about 15 per cent of their income is needed to service the loan.
It is glaring that the two HDB officers are not even aware of the prices in the present market. The prices they quoted are probably garnered from data released 3 months ago. At this moment, it is difficult,if not impossible to buy a 5-room resale flat at this price.
5-room resale flats in prime areas like Toa Payoh, Bishan and Ang Mo Kio are asking for prices close to $400,000 and beyond while those in Yishun and Clementi at around $350,000. This figure is not inclusive of the exorbitant COVs that sellers are asking which can range from between $10,000 to $50,000. A 3-room flat in Toa Payoh was transacted recently with a COV of $70,000! (Lianhe Wanbao, 14 Sept 2009)
The value of a 5-room unit at Duxton@Pinnacle has now shot up to more than $600,000 which is comparable to prices of condominiums in the surburbs. Even similiar-sized BTO flats being built at Punggol are priced at around $350,000. (HDB Infoweb)
The gap between public and private housing have narrowed in recent years. Some larger HDB flats in the central districts command a price higher mass market homes. Surely public housing should be considerably cheaper than those built by the private developers?
The deluge of letters questioning the pricing system of HDB as well as imploring the government to bring down the prices is a reflection of the general scepticism among the populace towards the government’s persistent assertation that HDB flats are “affordable” which are beginning to sound empty, hollow and even amusing for it it is contrarian to reality on the ground.
It is obvious that both HDB and the people are talking about different yardsticks of assessing housing affordability all along. What is deemed affordable by HDB is a mere arbitrary figure which does not translate to affordability to the buyers purchasing the flats.
The government should take active measures to bring down the prices of HDB flats which it is entirely capable of doing so since it enjoys a complete monopoly in the public housing sector instead of repeating its official mantra – “HDB flats remain affordable” again and again like a parrot which few Singaporeans now even bother to listen judging from the barrage of questions and protests going around in the last few weeks.
Source : Temasek Review – 17 Sep 2009
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