I refer to the article \u201cWP\u2019s housing proposal irresponsible, says Mah\u201d (ST, Apr 15).<\/p>\n
The report says that \u201cNational Development Minister Mah Bow Tan yesterday called the Workers\u2019 Party (WP) \u201cirresponsible for proposing cheaper HDB flats without explaining how it planned to pay for them.<\/p>\n
In my view, there may be no need for the WP to do any explaining, because what it may simply mean is that the HDB may make less profits, if HDB flats are priced lower.
\n
\nMr Mah claims that \u201cthe government subsidy on new HDB flats already adds up to $1 billion a year\u201d.<\/p>\n
Without the break-down of the costs of building flats, actually nobody knows how much exactly is the subsidy or whether there is any subsidy at all?<\/p>\n
If the WP wants a larger subsidy, does it plan to find it by cutting government spending in other areas, Mr Mah says, because \u201cyou can\u2019t get something for nothing\u201d.<\/p>\n
Mr Mah asks:<\/p>\n
\u201cIs it going to come from education?\u00a0 From healthcare?\u00a0 From defence?\u00a0 They didn\u2019t say. \u00d3r if they say it is not going to come from any of this, are they going to raise taxes?\u00a0 Or are they going to dip into the reserves?\u2019 he said in his first response to the opposition party\u2019s housing proposals contained in its manifesto.\u201d<\/em><\/p>\n In my opinion, the main cost or subsidy component \u2013 depending on who you believe \u2013 is the land cost charged to every HDB flat.\u00a0 Therefore, even if HDB flats are priced lower, there may be no need to fund it by cutting other government spending.\u00a0 The outcome may likely be just a reduction in the land sales revenue of the Government, which in any case is not reported as forming part of the Government\u2019s revenue in the Budget.<\/p>\n Thus, in my humble view, the Minister\u2019s questions may be irrelevant.<\/p>\n <\/strong><\/p>\n Resale prices will crash?<\/strong><\/p>\n \u201cThe WP\u2019s proposal to peg the prices of new HDB flats to median incomes of households that qualify to buy them, instead of to resale market prices, would also lower the value of Singapore\u2019s one million homes,\u201d Mr Mah warned.<\/p>\n I think since it takes about five years for a Build-to-Order (BTO) flat to be built and another five years Minimum Occupation Period (MOP), for flats to be available in the resale market, the short-term impact on resale prices may be minimal, and in the longer term, may help to cool the over-heating in the resale market.<\/p>\n In other words, the likely outcome may be a more gradual and moderate rise in prices in the future.<\/p>\n So, I do not agree with the Minister\u2019s assertion that the WP\u2019s proposals are part of an \u201casset devaluation policy\u201d, as opposed to the People\u2019s Action Party\u2019s asset enhancement policy. This is because the lessons of history tell us that it may be less risky to have moderate price increase than to have rapid price rise like what is happening now. Such rapid rise in prices may likely cause the property bubble to burst eventually, like it did in 1996, which led to a 14-year property bear market in Singapore, with prices falling by almost 50 per cent by 2003.<\/p>\n Mortgage arrears and negative equity?<\/strong><\/p>\n Mr Mah also asks: \u201cWhat happens to those people who want to sell, who are in mortgage arrears?\u00a0 It will be negative equity.\u201d<\/p>\n In this regard, the Minister has raised very pertinent questions. So, shouldn\u2019t he tell us how many HDB loans and HDB bank loans are in arrears over three months?\u00a0 How many HDB flat owners who couldn\u2019t pay their mortgage during the bear market of 1996 to 2010, lost their homes, CPF savings, cash utilised, or were made bankrupt, because of negative equity?<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" I refer to the article \u201cWP\u2019s housing proposal irresponsible, says Mah\u201d (ST, Apr 15). The report says that \u201cNational Development Minister Mah Bow Tan yesterday…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-82","post","type-post","status-publish","format-standard","hentry","category-hdb"],"_links":{"self":[{"href":"http:\/\/leongszehian.com\/index.php?rest_route=\/wp\/v2\/posts\/82","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/leongszehian.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/leongszehian.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/leongszehian.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/leongszehian.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=82"}],"version-history":[{"count":0,"href":"http:\/\/leongszehian.com\/index.php?rest_route=\/wp\/v2\/posts\/82\/revisions"}],"wp:attachment":[{"href":"http:\/\/leongszehian.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=82"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/leongszehian.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=82"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/leongszehian.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=82"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}