“Drastically lowering BTO prices without regard for land costs will end up hurting S’poreans: Sim Ann” (ST, Dec 12)
“Drastically lowering prices of Build-To-Order (BTO) flats, to the extent of disregarding land costs, would only end up hurting all Singaporeans instead of helping them, said Senior Minister of State for National Development Sim Ann.”
Comment:
Arguably, aren’t we in a way, “hurting” more and more S’poreans “instead of helping them”, when BTO prices keep hitting record highs?
Also, we are not talking about “drastically” reducing prices, but rather a gradual reduction in the land costs component, over time in the future
“As state land forms part of the nation’s reserves, not paying back the fair market value of the land would, in effect, run down the value of the reserves, “to the detriment of current and future generations”, said Ms Sim in a Facebook post on Sunday evening.”
Comment:
Since the land is eventually returned to the state at the end of the lease (99 or 15 to 45 years) – we are not running down the reserves
Moreover, there is an estimated total of $1.84t (Official Foreign Reserves $388b (US$282b Oct 2022)+ Temasek $403b (Mar 2022)+ GIC $1,046b (US$744b est.)
– So, a gradual reduction in the quantum derived from the Sale of Land revenue ($11.2b FY2022 estimate), may only have a minimal impact on the further growth of the above-mentioned total of $184t
“Ms Sim said any further increase in housing subsidies must be weighed carefully against other urgent spending priorities, as it would mean reducing spending on education, healthcare and security.
Taxes may have to be raised to pay for the higher housing subsidies, she added.”
Comment:
The so-called “housing subsidies” may in a sense, be just an accounting entry and concept, to reduce the price, after charging land at market rates
Why can’t we simply reduce the land costs charged to reflect the so-called subsidies?
If this is done – there may be no need fo charge this so-called subsidies, as an expenditure to the Budget
“Ms Sim said BTO flat prices have been kept affordable for Singaporeans, going by objective measures.
The majority of flat buyers use about four to five times their annual household income to pay for their BTO flats, compared with the eight to 20 times in other global cities.”
Comment:
Are we comparing with the private housing “in other global cities”, or their public housing?
“As such, many BTO flat buyers service their mortgages entirely via their Central Provident Fund contributions with little to no cash outlay, while using less than 25 per cent of their monthly income to pay for their housing loans.”
Comment:
This narrative may be flawed, as those who can’t afford won’t buy & those who can’t afford to pay after they bought, would have given it up – so, with this sort of flawed reasoning – it is always affordable!
“She added that the Government is sympathetic to the needs and concerns of Singaporeans, especially those starting families, and will continue improving its policies to “smoothen the home ownership journey”.”
Comment:
It is bad enough that all the CPF & cash utilised, may become 0, at the end of the typical 99-year lease, instead of the “asset enhancement” narrative for decades – it may be further aggravated by ever increasing record BTO prices
“Experts back Govt’s stance on including land cost in BTO pricing but urge more transparency on subsidies” (Today, Dec 12)
