Tag Archives: HDB Prices

Go back to basics for affordable flats

Posted on 29 Sep 2009 | Comments Off on Go back to basics for affordable flats

WHAT does ‘affordable’ mean?

With rising home prices hitting headlines in recent weeks, Singaporeans are falling over themselves trying to pin down affordability.

The Government, which built its reputation housing a nation, has defended its record. It says that public housing is affordable because new home owners use less than 30 per cent of their income to service their housing loans.

While this is persuasive, public scepticism has been just as strong. The gap exists because there is no agreement on what ‘affordability’ means.

The Government feels flats are affordable because those who applied for them will not be paying through their noses. But this, however, does not take into account home seekers priced out of these flats in the first place.

Many home seekers, meanwhile, feel aggrieved because an HDB flat that does not require a long commute to work is getting out of reach.

Furthermore, a study by National University of Singapore economists Tilak Abeysinghe and Gu Jiaying published last year found that the buying power of people’s lifetime earnings in 2007 was lower than it was in 1990 when tracked against the prices of HDB resale flats. By this measure, the prices of HDB resale flats have become less affordable. Continue reading →

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Don’t blame insufficient land release for property price surge

Posted on 27 Sep 2009 | Comments Off on Don’t blame insufficient land release for property price surge

I REFER to Monday’s Forum Online comment by Mr James Tan (’High price of flats, not affordability, is the issue’) that ‘URA did not release sufficient land to build HDB flats in a timely manner, causing pent-up demand and a sudden surge in prices’ and that ‘in the 1970s, a typical three-room flat in Marine Parade, a choice location, cost about $9,500. Today, a typical flat can fetch as much as $300,000 in the new towns’. That is a 3,000 per cent increase over 40 years.

However, the increase in flat prices is primarily due to Singapore’s growth and prosperity as well as inflation. In 1970, Singapore’s per capita GDP was US$914 and last year it was US$37,597 (S$53,000), and increase of 4,000 per cent. And, of course, good old inflation: If you remember, in old cowboy movies where a dollar coin was made of gold, they would bite it to make sure it was genuine.

Land in Singapore is limited, and I believe the Urban Redevelopment Authority has so far managed supply and demand very well to maintain price levels. One possible problem ahead is that, as younger Singaporeans are better educated, better paid and more affluent, will the older generation be left behind?

Calvin Yong

Source : Straits Times – 26 Sep 2009

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