I refer to the article “Pulau Ubin will remain in “rustic state” but residents will have to pay rent” (Straits Times, Apr 17).

Have to pay $6 – $35 rent now?

It states that “Kampung residents on Pulau Ubin who have to pay rent from now will pay an estimated $6 to $35 per month in the first year, with 90 per cent paying less than $20 a month. This rent, which is subsidised, will be increased to the market rent gradually over five years to assist the residents.
From the sixth year onwards, the residents are expected to pay between $31 and $205 per month, with 90 per cent paying less than $120 monthly.”

500% increase in rent?

The increase of $6 to $31, $20 to $120 and $35 to $205, being the lowest, 90th percentile and highest rental in the next 5 years, works out to an annualised increase of 32.8, 35.8 and 35.3 per cent, or as much as 500 per cent in 5 years.

“Subsidised” rent?

On what basis did the HDB and SLA come to the conclusion that the rent is “subsidised”?

35% p.a. increase?

On what basis did the HDB and SLA determine the rental and gradual increase in the next 5 years?

Has the HDB or the SLA ever charged anyone ever in the history of Singapore – rents that increase at this whopping rate of 35 per cent per year?

What happens after 5 years?

What will happen after 5 years? Will the rent continue to be increased at about 35 per cent per annum?

Why need to pay rent all of a sudden now?

As some of the residents have been staying there for decades, why impose rent all of a sudden now on them?

If can’t pay?

I saw a video interview on Razor TV with one of the residents, a 75 year-old lady and her daughter, who gave the impression that they have no income and have been living off the land for food and water.

So, what will happen to residents who have difficulty paying the increasing rental? Can they see their Member of Parliament (MP) or approach Comcare for financial assistance?

Have any of these options and processes been made known to the residents?

Forgot to compensate residents for 20 years?

As to “Then (in 1993), the state had acquired land on the island to build recreational facilities, including expansion of the Outward Bound School grounds. As a result, the land which the affected residents occupied became state land. They were therefore entitled to money but also had to start paying rent to remain in their homes.The planned developments were completed, but the 22 households which received the notice in March had not claimed their benefits or paid rent, the authorities discovered in a recent review”, I find it rather strange that none of the 22 households have claim the benefits that they were entitled to 20 years ago, in the last 20-year period.

1 cent rent in 1993?

Can the HDB and SLA explain how such a lapse could have occured? How much were they entitled to – when the State acquired the land? Will they now be compensated with interest for the past 20 years? How and why did the HDB and SLA  fail in their duty to collect rent in the last 20 years? I am also curious as to what was the rent that they were supposed to collect – 1 cent to 3 cents (working backwards at 35 per cent annualised increase from 1993 to 2013, to get to today’s rent of $6 to $35)!

Maybe need another apology?

With regard to”“We acknowledge that the notification could have been more carefully worded and the language updated to reflect the eventual development. We apologise for the anxiety caused to the residents involved” – in view of the above – perhaps another apology may be due to the residents!

Leong Sze Hian

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I refer to the article “Initiative to aid HDB residents settle arrears” (My Paper, Apr 15).

“Dr Hong Hai, the council’s chairman and an MP in the Bedok GRC, suggested listing the names of late-payers on residents’ committees’ notice boards and in the council’s newsletter.

It is appalling to learn in yesterday’s Straits Times that up to 20 per cent of the residents have not paid their conservancy and service charges.

What is most appalling of all is that the delinquent payers are identified a s “educated and well-off residents living in executive flats and four and five-room units”.

But when the reason “may be that they know the law too well and know that we don’t have the by-laws to penalise them”, then it is another story altogether.

However, what they can and should do is to hurry up with their by-laws which will enable them to impose a penalty, preferably on an escalating scale.

Of course, such draconian by-laws will affect genuine hardship cases even more than they will the well-off and educated.”

- Comment: Fast forward to today – are most of those in arrears still the rich and educated like in 1989?

Threats and harsh measures would show that Singapore was still an “immature” society?

“RESIDENTS in the Ang Mo Kio area have joined the “half million dollar club” – about 7,400 households there owed their town councils almost half a million dollars in conservancy and service fees, an MP disclosed on Saturday.

Besides the town councils in the Ang Mo Kio area, those in Bedok, Tiong Bahru, Redhill and Bukit Batok also face this late-payment problem.

The other three town councils which had money owing to them were Redhill Tow n Council ($130,600), Bukit Batok (about $230,000) and Tiong Bahru (about $200,000).

Speaking at the Ang Mo Kio South Town Council office, Mr Heng said that if threats and harsh measures were needed to solve the problem, it would show that Singapore was still an “immature” society.”

- Comment: Fast forward to today – Singapore has really “matured” as those in arrears are served legal letters, charged in court, fined or jailed!

Beginning of the end?

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I refer to the article “Lease  buyback scheme leaves retiree $130k richer” (Sunday Times, Apr 14).

Lease buyback?

It states that “His flat, which he bought in 1985, has about 70 years left on the lease. Under the scheme, the HDB bought the unit from him for more than $300,000 and he paid about $170,000 for the 30-year lease.

CPF Life?

Most of the $130,000 net proceeds will be used to top up Mr Kwek’s Central Provident Fund (CPF) Retirement Account, and depending on which CPF Life scheme he opts for, he will receive a monthly annuity of about $700 for his lifetime.

$35,000 cash?

Mr Tan will also get to keep the excess of about $15,000 in cash, on top of a cash bonus of $20,000. He plans to save the money.”

Downgrade may be better?

By downgrading to a same size BTO 3-room at say $150,000 ($20,000 less than HDB’s $170,000 30-year lease) and selling his current 3-room flat in the open market for the same $300,000 that HDB has valued his flat, to derive an extra median Cash-over-valuation (COV) of say $25,000, instead of the Lease buyback scheme, Mr Kwek may be richer by $145,000 ($20,000 price difference between BTO flat and HDB 30-year lease plus $25,000 COV less $30,000 Resale Levy) , instead of $130,000.

$50,000 cash instead of $35,000?

With net cash proceeds of $145,000 by downgrading, instead of $130,000 under the Lease buyback, he can still choose to opt in to the CPF Life Scheme to get the Silver Bonus. The difference being that he would be left with more cash of $50,000 instead of $35,000.

No worry about living beyond 30 years?

He will also not have to worry about himself or his younger brother who lives with him, out-living the 30 years lease under the Lease buyback.

HDB flat continues to appreciate?

Moreover, he may have an increasing asset in his BTO 3-room, which may appreciate to about $648,291 in 30 years’ time, assuming the HDB flat increases at an average of 5 per cent per annum.

Given up all future appreciation under Lease buyback?

In a sense, Mr Kwek’s loss of his current flat’s future appreciation, may be likened to the HDB’s gain, under the Lease buyback.

Assumptions – 2nd timer, MOP, Income Ceiling?

The above is on the assumption that Mr Kwek’s current flat is his first and only HDB flat, and that he has already met the 5-year Minimum Occupation Period (MOP) (he bought in 1985), and has also met the Income Ceiling of $5,000 for BTO 3-room (he is retired).

Alternative options?

I wonder if retirees like Mr Kwek are advised on the alternative of downgrading (in this example to a same size flat), when they enquire about the HDB Lease buyback and Silver Bonus schemes.

Conflict of interest?

As there may be an inherent conflict of interest because of the HDB’s role and financial implications, perhaps retirees could be given independent advice.

Instead of just promoting and educating lower-income Singaporeans about the Lease buyback scheme, perhaps they could also be educated about other alternatives like downgrading.

Financial advice?

I do hope that Singaporeans may get arguably more diverse, comprehensive and better financial advice in the future, on their retirement options.

Leong Sze Hian

P.S. Leong Sze Hian is a Past President of the Society of Financial Service Professionals

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I refer to the articles “HDB will be the price-setter: Khaw” (Straits Times, Apr 13).

$1b deficit?

It states that “HDB pays market rate for its land and construction costs. Hence, when it prices flats below a market rate, it incurs a housing deficit – now in the region of about $1 billion a year, including other costs such as upgrading.”

Break-down building costs?

In view of this statement, isn’t now a good time to finally disclose the break-down of the costs of building HDB flats?

$2b deficit previously?

I am puzzled by the deficit of about $1 billion a year, because the previous National Development Minister said in 2009 that the deficit was $2 billion.

In this connection, let’s revisit what the previous MND Minister said in 2009 – “Mr Mah’s remarks seem to contradict the statistics provided in the HDB’s latest annual report.

Less flats sold?

According to the annual report, HDB revealed that “the number of flats sold under the home ownership scheme this year was 4,738, which was 7,253 less than last year”.

Less “demand for flats” and flats built?

According to its section titled “Key statistics”, the “demand for flats” was 9,870 Home Ownership flats for 2008/2009, compared to 12,449 for 2007/2008; and the “Building statistics – Dwelling units” was 3,154 in 2008 compared to 5,063 in 2007.

All statistics on flats declined, but deficit increase?

All these numbers show that the number of flats sold have declined, rather than increased.

The number of flats sold under the home ownership scheme declined by 60 per cent, “Demand for flats” declined by 21 per cent, and “Building statistics – Dwelling units” declined by 38 per cent, for the last year.

So, how is it possible then that “the reason for the high deficit ($2 billion) was because more flats were offered for sale last year, compared to the year before”, when the HDB statistics show that flats’ building, demand and sales, all declined substantially last year compared to the year before?

From $1 to $2 and now back to $1b deficit?

Can the Minister clarify his statement on the reasons for the doubling of the deficit from $1 billion to $2 billion for the last year?

As for Mr Mah’s assurance that HDB “sells flats lower than their cost price”, the HDB has not disclosed the breakdown of the cost of building flats, despite letters to newspaper forums requesting for this information, almost every year.

Last time that flats’ costs were disclosed?

The last time this information was disclosed was in 1981, when the then National Development Minister Mr Teh Cheang Wan, disclosed the land and construction cost, as well as the subsidy and selling price, of the various flat types in six districts.

For example, a three-room flat in the central core region, cost $53,700 to construct and incurred a land cost of $40,000, and sold for $57,100.”

Build more flats = lower deficit?

Since “HDB has rolled out 70,000 new flats since Mr Khaw took over”, why has the deficit shrunk from $2 to about $1 billion, when the number of flats is so much more now than the earlier period?

Does this make any sense to you, as it appears that the more flats we build, the lower the deficit?

Removing the wrong Income Ceiling?

As to the article “Radical idea: Remove income ceiling” (Straits Times, Apr 13), we may be barking up the wrong tree by removing the upper income ceiling of $10,000. What we may need to do urgently is to remove the $2,000 income ceiling for 2-room flats, because some cash-strapped families may be forced to buy much more expensive 3-room flats.

With regard to the article “Ex-Harvard prof launches book on S’pore health-care system” (Straits Times, Apr 13) which said that “The Singapore system is unique in that it provides among the best health quality in the world at the lowest cost among any developed economy”, Singaporeans may be looking forward to the current National Development Minister (former Health Minister) doing the same “magical” – “best quality at lowest cost” for HDB too?

Leong Sze Hian

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I refer to the articles “BTO flat prices stabilised: Khaw” (Straits Times, Apr 9) and “BTO flat prices have stabilised, says Khaw” (Channel NewsAsia, Apr 8).

BTO prices stabilised?

The latter article states that “prices of Build-To-Order (BTO) Housing Development Board flats have been stabilised by de-linking them from the resale market. Government subsidies for BTO flats were increased so that they will not be heavily affected by re-sale flat price increases.

For example, in Punggol, three-room BTO flat prices were between S$150,000 and S$210,000 in 2010. They remained the same in 2011 and 2012.

In Sengkang, four-room BTO flat prices were between S$200,000 and S$280,000 dollars in 2010. They increased to between S$230,000 and S$340,000 dollars in 2011 and remained at that level in 2012.”

3-room increased 25%?

You can see from the above that there is no mention of 3-room flat prices in Sengkang.

In this respect, according to the table in the first article mentioned above, 3-room flat prices increased from $120,000 – $170,000 to $150,000 – $190,000, from 2010 to 2012.

Therefore, the cheapest 3-room flat in Sengkang increased by 25 per cent, from $120,000 to $150,000, from 2010 to 2012.

So, how can we say that BTO flat prices have stabilised?

Benefit of selective disclosure?

Given that not all BTO statistics were disclosed, and with the benefit of just selecting three estates to show that prices have stabilised – is this the best that one can come up with to draw this conclusion?

Moreover, these are 3-room flats which lower-income families generally apply for, which have increased by such a large quantum, when “BTO flat prices have stabilised”!

No 2-room or studio flats?

I was curious as to why there is no mention of 2-room or studio flats?

So, I decided to try to check on their prices from 2010 to 2012.

2-room increased 22% in 20 months?

“Lo and behold” – the cheapest 2-room flat in Sengkang increased by 22 per cent, from $68,000 (June 2010) to $83,000 (January 2012).

Studio increased 20% in 2 years?

For studio flats, the cheapest one in Choa Chu Kang increased by 20 per cent, from $64,000 (January 2010) to $77,000 (January 2012).

So, how can we say that BTO flat prices have stabilised?

Studio increase 23% in 8 months?

If you think the above increases of up to 22 per cent in the 20-month period from June 2010 to January 2012 is bad enough, wait till you see the November 2012 BTO’s cheapest studio in Toa Payoh at $116,000 – an increase of 23 per cent from $94,000 in March 2012 in just 8 months!

So, once again, how can we say that BTO flat prices have stabilised?

Poorest Singaporeans’ flat prices increased the most?

Since 2-room flats are generally for the lowest-income families, and studio flats are generally for retirees who may need to downgrade in order to get some cashflow to retire, why do we allow these flats’ cheapest prices to increase by up to 23 per cent (studio) in just 8 months or up to 22 per cent (2-room) in just 20 months?

Meaning of stabilised?

Perhaps the HDB’s definition of “stabilised” may be quite different from the dictionary’s!

Leong Sze Hian

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I refer to the article “DBS targets HDB flat buyers with new home loan” (Straits Times, Apr 1).

No more Housing Withdrawal Limits?

When I checked the CPF web site’s housing withdrawal limit calculators, I discovered that they no longer apply to HDB flats.

Until today, HDB resale flat buyers on bank loans were previously subject to restrictions on the use of CPF to pay mortgage payments, such as the 120 per cent of the purchase price or original valuation, whichever is the lower rule.

How many affected?

I understand that thousands of HDB owners have been affected by the withdrawal limits on the use of CPF over the years.

This may yet be another flawed policy which may have caused undue financial stress to thousands of families, over the years.

How many families have been affected by this policy?

How many may have lost their homes?

How come no public announcement?

Shouldn’t a public announcement be made immediately on this change in policy?

Refund cash by replacing with CPF?

For those affected who had to use cash instead of CPF to pay for their mortgage, will this policy be applied retroactively, so that they can use their CPF now to get the cash paid refunded to them, if they choose to do so?

Bank loan delinquency statistics?

As to “Ms Lui also noted that while there have been some cases of repossession, these are rare.

She encouraged bank customers to discuss options with the bank should their financial situation change. “We are here for the long term, and we want to help our customers. If our customers come to us, we can work out a six-month or 12-month plan to help them through difficult times,” she said”, one difference between a HDB Concessionary loan and a HDB bank loan, may be that there are no publicly available statistics, as to how many HDB bank loans have been in arrears or foreclosed, since banks were allowed to offer HDB loans from 1 January, 2003.

HDB had said in a newspaper forum reply that they do not have statistics on HDB bank loans or foreclosures, although a Parliamentary reply several years ago was able to give the delinquency statistics for HDB bank loans.

Still called Concessionary loan?

Since, HDB bank loan interest rates have always been below the HDB’s 2.6 per cent interest rate, isn’t is a misnomer and somewhat misleading to continue calling it a HDB Concessionary loan?

HDB loans financial assistance?

I understand that borrowers who have difficulty paying their HDB Concessionary loans can typically get financial assistance from HDB by way of paying nothing, interest only or reduced monthly mortgage payments for six months, or up to a year upon review.

They can also see their Member of Parliament (MP) for assistance.

Bank loans got financial assistance?

In contrast, what is the typical process for defaulters of HDB bank loans? Do banks apply their typical penalty interest rates and late payment penalties for HDB loans too, like their private property loans?

Why majority take HDB loans?

Perhaps some of the above are the reasons why the majority – “Last year, two-thirds of the 59,000 HDB home buyers took the HDB loan” – still take HDB Concessionary loans despite the higher 2.5 per cent interest rate.

10-year cap on interest at 2.5%?

With regard to “The POSB HDB Loan will have its interest rate capped at the Central Provident Fund’s (CPF) Ordinary Account rate, which is 2.5 per cent, for 10 years” and “However, when compared to other bank loans in the market, analysts says the new POSB loan starts at a higher interest rate.

But at higher %?

“It’s anywhere from 0.3 per cent to 0.6 per cent higher than what’s in the market rate, but the compromise is there is an interest rate cap at the CPF Ordinary Account level” (“POSB to offer new HDB loan option from April 1“, Channel NewsAsia, Mar 31) – the risk may be that mortgage interest rates may be persistently higher than the HDB Concessionary loan’s 2.6 per cent during the balance 20 years of a typical 30-year mortgage.

Risk of higher % in the future?

Although mortgage interest rates are at near historical lows now, one should note that they were over 10 per per cent in the early 1980s and I understand that historically they have averaged at around 4 per cent.

Weigh all the risks?

As a volunteer doing financial counseling, I have come across hundreds of families who lost their homes because they were unable to service their mortgage.

No April Fool?

Note: This is not an April Fool Day’s joke.

Leong Sze Hian

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I refer to the article “‘Home for annuity’ scheme for single, aged Taiwanese” (Straits Times, Mar 18).

Taiwan life annuity

It states that “A 70-year-old man whose home is assessed to be worth NT$10 million (S$420,000) will receive up to NT$34,800 (S$1,460) a month until he breathes his last.”

Singapore – $926 – $977 life annuity?

Comparing the above with the HDB Lease Buyback Scheme, I estimate that a similar 70-year-old man who has a 3-room HDB flat valued at $323,000, may get a CPF Life Scheme monthly life annuity of about $926 to $977 (assuming that the retiree qualifies for the LBS Bonus of $20,000), according to the CPF Life Estimator calculator.

Taiwan – $1,123 life annuity?

The equivalent life annuity for this example in Taiwan for a $323,000 flat instead of the Taiwan example’s $420,000 is $1,123 ($323,000 divided by $420,000 times $1,460).

It would appear that Taiwan’s scheme pays about 18 per cent more a month than Singapore’s HDB Lease Buyback Scheme – $1,123 versus $926 – $977.

Rate pegged to 10-year government bonds?

Singapore’s CPF Life scheme is also subject to the uncertainity as to what the average yield of 10-year government bonds plus 1 per cent may be in the future. All CPF Life annuity payout projections are based on the assumption of 4 per cent, which is based on an average yield of 3 per cent on 10-year government bonds plus 1 per cent. Currently, the average yield of 10-year government bonds plus 1 per cent is less than the 2.5 per cent floor rate (which is the lowest rate payable on CPF Life and the CPF Retirement Account).

In fact, since the former 4 per cent rate was pegged to the average yield of 10-year government bonds plus 1 per cent, from 1 January 2008, the rate has always been below 4 per cent.

There is no guarantee that the current minimum rate of 4 per cent, which has already been extended a few times, will continue to be extended from 1 January 2014 and beyond.

“This is in line with the Government’s announcement made in September 2012 to maintain the 4 per cent per annum floor rate for interest earned on all SMA monies and Retirement Account monies until the end of 2013.” (“Interest rate for CPF Special and Medisave Accounts to stay at 4% from April to June” (Straits Times, Mar 18)

Stay until death vs 30 years?

Also Taiwan’s scheme allows the retiree to stay until death, whereas the HDB Lease Buyback Scheme is only for 30 years.

Nobody alive after 30 years will be homeless?

In this regard, according to the HDB’s web site – “There may be cases where the flat owner outlives the 30-year lease. Such cases will be dealt with on an individual basis and appropriate housing arrangements will be provided to those flat owners who are not in a position to pay for the lease extension.

No elderly flat owner will be left homeless if he/she outlives the 30-year lease of the LBS flat.”

In this connection, of course the probability of living beyond 30 years is very low for the subject media article which used the example of a 70-year-old man.

If the retiree is younger, at say 63, as in the HDB web site’s example, the probability of living beyond 30 years may be higher.

So, unlike Taiwanese retirees who can stay until they die, Singaporean retirees have the uncertainity of “Such cases will be dealt with on an individual basis and appropriate housing arrangements will be provided to those flat owners who are not in a position to pay for the lease extension”.

Lifetime Reverse Mortgage?

I understand that in the typical Lifetime Reverse Mortgage schemes in other countries, the residual marker value of the home less annuity withdrawals and accrued interest, is also returned to the deceased retiree’s estate.

Leong Sze Hian

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I refer to the article “JTC gradually phasing out scheme for housing foreigners: Lee Yi Shyan” (Channel NewsAsia, Mar 12).

Public housing rent to foreigners since 1997?

It states that “the scheme was started in 1997 to address the lack of affordable housing for foreign talents.

He said in those days, HDB owners could only rent out rooms and not the entire flat, to locals and foreigners alike.

But this has changed since 2003, where HDB has allowed the rental of entire flats to both Singaporeans and foreigners.

Gradual phase-out of SHiFT?

Mr Lee said: “As rental supply increases, JTC has been gradually phasing out SHiFT through the sale of flats to eligible buyers, meeting HDB’s home ownership rules. JTC expects to continue to run down the stock of the remaining SHiFT flats as the tenancy agreements expire.”"

No statistics?

The above reply in Parliament may be quite meaningless, as it is devout of even a single statistic.

For example, at its peak, what was the total number of flats rented out to foreign talents by JTC?

This may give us a better picture of the extent to which needy Singaporean families queuing for a HDB rental flat may be deprived of public housing that were given to foreigners instead.

How much revenue has JTC received from such rentals since 1997?

What is the rental charged to foreigners relative to the “from $26″ rental for HDB flats charged to Singaporeans?

As to “But this has changed since 2003 – as rental supply increases, JTC has been gradually phasing out SHiFT through the sale of flats to eligible buyers”, when did JTC start phasing out SHiFT? – From 2003?

Can we have the statistics as to how much the SHiFT rental flats have been decreasing over the years? And also, how many SHiFT flats were sold to Singaporeans “meeting HDB’s home ownership rules”?

With regard to “JTC expects to continue to run down the stock of the remaining SHiFT flats as the tenancy agreements expire”, can we have the statistics as to how many flats’ tenancy agreements are expiring and when are the expiry dates?

When will the scheme be totally phased out?

Public housing to foreigners, not Singaporeans?

In respect of “He was responding to a question in Parliament by non-constituency MP Lina Chiam, on whether the government would consider suspending the scheme, to address the housing concerns of Singaporeans who cannot afford HDB flats.

Mrs Chiam had suggested renting these housing units currently under the scheme to them”, the fact that the HDB had just announced that it would increase the number of rental flats from 50,000 to 60,000 (“Government to increase supply of rental flats by 20% to 60,000“, Channel NewsAsia, Mar 11), shows that there may be many needy Singaporean families who need rental flats.

This shortage of HDB rental flats to meet the demand and needs of needy Singaporeans has been going on for decades. So, why did we and arguably are still continuing to rent much needed public housing to foreigners?

In this connection, with about 1,600 vacated SERS flats that  have been leased to private operators to manage, of which a portion are allocated to needy Singaporean families at subsidised rates under the Interim Rental Housing (IRH) scheme, why not tell us how many public housing flats (HDB, JTC, SIT (Singapore Improvement Trust), etc) in total are leased to private operators to rent out for a profit? How many public flats in total are rented out to foreigners? (“HDB “takes no profit” from interim housing?“, Jan 9)

Leong Sze Hian

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Strong financial literacy can mitigate the financial problems that many Singaporeans may encounter. In this programme launched by SPP Secretary-General Mr Chiam See Tong, we will help participants understand and make informed financial decisions.

Topics

1) Managing inflation

2) Investing prudently

16 March 2013 (Saturday)

3 – 6 pm

Venue: SPP Headquarters

1 Siang Kuang Avenue, Singapore 347919 (Sennett Estate)

Free admission – register online at http://sppfinancialliteracy5.eventbrite.com

For further enquiries, please email: media@spp.org.sg

http://www.spp.org.sg/spp-financial-literacy-awareness-programme-5th-intake/

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I refer to the article “BTO prices will not rise with resale market: Khaw” (Straits Times, Feb 1).

BTO de-linked from resale prices?

It states that “National Development Minister Khaw Boon Wan today made clear that he has de-linked the prices of new flats sold by HDB from the resale flat market.

He has done this ever since he took over the housing portfolio in 2011 to ensure that Build-to-Order (BTO) flats remain affordable despite the rising resale market, he said.

Speaking to reporters at the HDB hub on Thursday morning, he noted that BTO prices across HDB’s new launches in the past 18 months have been stable, although prices of resale flats have been steadily climbing.”

Why only announce now?

Since the prices of new flats have been delinked from resale prices since mid 2011, why did we wait more than one and a half years to tell Singaporeans of this significant policy change?

Why wasn’t such good news announced before the Punggol-East by-election?

In a reply in parliament in November, it was said that “the overall BTO prices have increased by 12 per cent since January 2009.

This is despite the 34 per cent increase in the HDB Resale Price Index (RPI) over the same period.”

So, why was this “delinking of prices” policy change not mentioned in November in the parliamentary reply?

The parliamentary reply seems to imply that new flats’ prices have been moderated against resale prices, rather than delinking.

Breakdown of BTO prices?

We should be given a detailed breakdown of BTO prices since mid 2011, instead of just a statement that “BTO prices across HDB’s new launches in the past 18 months have been stable, although prices of resale flats have been steadily climbing”.

Affordability index should decline?

Also, the HDB’s affordability index which is first-timers buying flats in non-mature estates using about 23 per cent of their monthly income to pay for their housing loans, seems to have been creeping up from about 21 per cent.

If new flats’ prices have been kept “stable”, and presumably first-timers’ incomes have been increasing, shouldn’t the affordability index be declining?

“Chicken rice” analogy?

As to “This means that the subsidy that the Government is giving for the construction and sale of new flats has been growing”, allow me to use the “chicken rice” analogy.

If the restaurant has been increasing the price of chicken rice to $5, and you also increase your price to $3, even though your cost is $1, you then say that you are giving a subsidy of $2 to the customer.

All of a sudden now, you say that you will delink your price from the restaurant’s price, and will keep your price “stable” at $3.

Are you giving a subsidy or still making money?

Breakdown of construction and land costs?

Anyway, now that new flats’ prices have been delinked, isn’t it the right time now to disclose the breakdown of the construction and land costs?

Pay for extras?

I saw a posting in a newspaper forum page discussion thread which said “but HDB remove some standard finishing from some BTO flats. Previously for premium BTO flats, floor tiles/wooden flooring is included in the purchase price. But now buyers have to top up for floorings, bathroom equipments and even partition walls. After adding all these optionals, it is definitely more expensive to own a flat now than 18 months ago. And HDB have the practice of marking up prices at subsequent re-launches even though they are exactly the same units”. Of course, I am unable to verify what was said in this posting.

Leong Sze Hian

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