“Changing land pricing to cut cost of HDB flats risks destabilising entire property market: DPM Wong” (ST, Feb 26)
Instead of trying to make sense of all the complex arguments in the Parliamentary debate on HDB, with yet another commentary to the numerous ones that have been proposed – I shall try to simply explain, what I see as arguably, the crux of the issue, in a nutshell, by using an analogy
The record HDB BTO and resale prices, are like a runaway train, which has to be slowed down, before it derails
So, instead of an abrupt cut in the speed of the train by 50% (large reduction in the land costs component), perhaps what we need to do is to gradually reduce the speed (land costs component), and see what happens (the reaction of the markets and the people)
In this connection, the bear market in HDB resale prices from 2013 to 2021, cited in the debate as “HDB resale prices fell for six consecutive years from 2013 to 2019”, is relatively “nothing”, compared to the huge bear market, from 1996 to 2008
(12 years bear market, from 99.6 4th quarter 1996 to 99.4 3rd quarter 2008. At its lowest point at 69.1 3rd quarter 2002 – it had decreased by 30.6%)
(8 years bear market, from 149.4 2th quarter 2013 to 150.6 3rd quarter 2021. At its lowest point at 130.8 2rd quarter 2019 – it had decreased by only 13.4%)
In the final analysis, keeping the status quo, fundamentally, of the current HDB policies, i.e. not doing anything significantly different, may be the greater risk to the sustainability of our HDB system
