Property enters election fray in Singapore

Property has entered the political fray in Singapore’s election season, as Minister for National Development Mah Bow Tan recently criticized the Opposition party’s idea on how to provide cheaper housing.

On April 21, the National Solidarity Party (NSP) released a plan proposing the Government sell new HDB flats to first-time buyers at cost-plus, according to Today. But yesterday, Mr Mah responded noting the NSP has proposed to lower HDB flat prices through cost-plus pricing and under-paying for public housing land.

He said the NSP is opposing the government’s approach of providing HDB flats as both a home and an asset for Singaporeans.

“The NSP is in effect proposing a public rental housing system, since they say flats should just be a roof over the head, without value appreciation. Without the hope of appreciation, housing is then just an expenditure item, rather than an investment – no different from long-term rental,” said Mah.

Opposition candidates are contesting the ruling PAP in 82 out of 87 constituencies – an unusually high number in the election to be held May 7.

Mr Mah said other countries do offer rental housing as their form of public housing but many of these have become slums because they are not maintained.

“Is it really better for Singaporeans’ hard-earned money to go into paying rental, rather than paying for a house they own?” he asked.

Addressing affordability concerns, Mr Mah said the balance between housing affordability and asset enhancement was not an easy one to strike. He said he understood Singaporeans’ concerns about affordability due to the recent rise in prices. The minister said the property boom was happening in many other countries, especially in Asia, because of low interest rates and ample liquidity.

“To address affordability concerns, we have increased the housing supply and moderated demand – we are monitoring this closely and managing carefully – so that we cool and not crash the market,” he said.

Mr Mah reiterated that eight in 10 new flat buyers last year used 25 per cent or less of their salaries to service their monthly mortgage. Most young couples, he said, can put the downpayment for a new flat in about three years after starting work and can expect to service most of their loans with their CPF contributions.

“This is possible because of the large subsidies and grants in place today, to help young couples buy their homes,” Mah said, replying to recent comments from NSP secretary-general Goh Meng Seng. “But Mr Goh claims that paying nothing as a deposit for a new flat, or covering monthly mortgages with CPF contributions does not mean public housing is affordable.”

“If being able to use less than a quarter of your income and no cash to finance your flat is not considered affordable, what exactly does Mr Goh define to be ‘affordable housing’?”

The NSP is contesting Tampines Group Representation Constituency, where Mr Mah is the People’s Action Party anchor minister.

Source : PropertyReport – 29 Apr 2011


Comments are closed.