A rebuttal to Mah Bow Tan’s claims that HDB flat values will always go up
January 4th, 2010 | 
Author: By David See Leong Kit
[The following letter was rejected by TODAY for publication and emailed to us by the author himself this morning for publication on our site.]
Your report “Asset that keeps growing“ (TODAY Dec 30) highlighted Minister Mah Bow Tan’s simplistic and optimistic view that HDB flat values will always go up.
Home prices in Singapore have become “ridiculously-high” for private property and “sky-high” for HDB flats.
Is it financially prudent for our young couples to start their marriage saddled with huge housing debts for something as basic as a roof over their heads?
The broader issue is that land-scarce Singapore must have proper policies to promote an “orderly” property market that is sustainable by economic growth, real demand and especially rising incomes. Such a market with gradual capital appreciation will benefit many Singaporeans from successive generations.
Whereas a “speculative” property market of sky-high prices is largely driven by speculators out to make a quick buck by “flipping a property”. But when the Property Bubble finally burst, both speculators and genuine home owners will be hurt by rapidly falling property values.
During our 1994 Property Bull Run, prices of both private and HDB properties were rising at 30% per annum for three years in a row. But since when has our economy as well as our salaries grow at such a phenomenal rate?
Our 2007 Property Bull Run lasted only nine months, cut short by the US sub-prime housing bubble turning into a Global Financial Crisis that brought recession and job losses to Singapore. But during that nine months, average freehold property value in our East Coast area doubled from $700 psf to $1400 psf.
A property may be “an asset that can be monetised”, but it can also end up as a millstone around one’s neck. High property prices will affect the average Singaporean as follows:
> As a home-buyer. Is it wise to sink so much of your hard-earned monies in a brick-and-cement house with little left over for your children’s upbringing, your own healthcare and retirement needs in old age?
> As an employee. If your employer has to pay high office rent out of its operating budget, can it afford to pay you a better salary,increment and bonus?
> As a consumer. If a shopkeeper or supermarket operator has to pay high commercial rent, will it not charge you higher prices for goods and services?
Finally, two pertinent questions for HDB flat-owners:
Are there not more important things in life, such as good health, close family ties and well brought-up children than this materialistic addiction to “HDB Upgrading Carrots” and “my HDB flat is worth a lot”?
Should you die suddenly from an accident or heart attack, can you take your high-valuation upgraded HDB flat along with you to the next world?
Posted in Letters
12 Responses to “A rebuttal to Mah Bow Tan’s claims that HDB flat values will always go up”
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first,you get us out of jobs and now ,are you trying to make us live on the streets?
mr mah,the PRs are the ones enjoying your antics cos they benefit from it…they are quietly laughing at you and us!
now,you may not care as you are not among the ‘citizens’ who suffer but wait and see,the laughter of these foreigners would only get louder when it comes to your turn later?
“Finally, two pertinent questions for HDB flat-owners:
Are there not more important things in life, such as good health, close family ties and well brought-up children than this materialistic addiction to “HDB Upgrading Carrots” and “my HDB flat is worth a lot”?”
The above question is irrelevant if I am about to buy my first HDB flat for my own stay. Even if I am staying in a HDB flat that has gone up in value, I cannot be too happy too unless I sell it off and stay with a relative.
So don’t assume that everyone is happy that the prices of HDB flats have gone up. And we are not in this race, we just want to have a sheltor above our heads.
Is therea cheaper alternative to HDB flats?
@sotong head
you really are not sotong for you have wisdom.
the rich.and that includes top civil servants who help ministers formulate ‘clever’ policies would be glad to hear what mr mah has echoed what the mm has said.
yes,only the rich and the elites benefit for most,if not all,of them have more than that “one roof over their heads”.
for us, we can only benefit if we choose to uproot or if they
allow,live on the streets along well-covered ORCHARD ROAD where
you won’t get drenched if it’s raining?
屋主刚拿钥匙便登广告 达士岭出租一房要价千元
一些屋主准备出租整个单位，开出的四房式组屋租金高达3000元，如果成功，以此价格出租的单位相信将是全岛租金最高的组屋之一。
吴淑贤 报道
新房子的钥匙才拿不久，本地最高组屋达士岭（The Pinnacle@Duxton）的一些屋主已迫不急待刊登广告出租房间，一个房间的租金要价高达1000元，比隔一条马路的广东民弄（Cantonment Close）组屋贵了300多元。
一些屋主准备出租整个单位，开出的四房式组屋租金也高达3000元，如果成功，以此价格出租的单位相信将是全岛租金最高的组屋之一。
有价无市乏人问津
不过，正是因为开价相当高，欲出租的组屋单位似乎有价无市，推出市场约两三周以来仍乏人问津。
RH Housing房屋经纪林淑玲目前在替一对年轻夫妇出租达士岭的房间，开价1000元。以组屋而言，她承认这样的价格“偏高”，不过相信达士岭有其独特的号召力。
她说：“组屋地点非常适中，而且又是全新的，高楼单位还可以看到市区景色，吸引力非凡。”
据知，屋主原本为照顾年迈父母，决定暂时不搬进达士岭居住，并向建屋发展局申请出租整个组屋单位。这个位于20楼以上的单位当时开价3000元，吸引了七八对夫妇洽询及参观，不过还是没有出租出去。
屋主后来也改变初衷，决定只出租一个房间，可是整千元的要价似乎已让有兴趣者却步，并未吸引任何人洽询。
网上刊登的价格
主要是试探市场
HSR经纪王有裕也在房地产网站刊登广告，尝试以2500元出租达士岭的一个四房式单位。然而，当记者拨电洽询时，他说，价格有下调空间，位于十多楼的单位能以2200元出租。
王有裕说，网上刊登的价格主要是要试探市场，而市场反应一般，因此他相信2200元的租金较合理。况且，组屋才落成不久，租户并不能租下整个单位，因此这样的租金已相当高。
要是只出租一个房间，他认为600元到700元的租金较能让人接受。他以百胜楼培英街（Bain Street）组屋为例，指那里的一个房间刚以大约700元出租。组屋虽然并不新，但地点同样方便，可步行到白沙浮。
在他看来，达士岭固然是全新的组屋，不过第一年的居住环境未必非常理想。这是因为组屋设施未完全竣工，许多单位也将开始装修工程，以致这组屋区可能沙尘处处。
博纳集团(PropNex)经纪张志华则根据屋主指示，尝试要以3000元出租一个四房式单位，但至今无人问津。他也同意，定得太高的租金或许吓跑了一些有兴趣的公众。
“不过，屋主是以将近50万元买下这单位，总不能以太低的价格出租吧？”
张志华说，要是有人想租下整个单位，按照行规须支付一个月定金、一个月租金以及经纪佣金（介于半个月到一个月租金），屈指一算就是将近一万元。他坦言，一般的上班族或许拿不出这么多现金，只有外籍专业人员较有能力这么做。
建屋局去年第三季数据显示，位于市区和红山的组屋租金最高，市区四房式单位租金中位数是2200元，五房式是2400元。
博纳集团提供给本报的数据也相似，广东民路四房式组屋的租金中位数介于2250元至2350元。
根据建屋局规定，屋主不能马上出租整个新组屋单位，受津贴者须住满五年，不受津贴者则须住满三年才能出租整个单位。屋主事先也须取得建屋局同意。
受津贴组屋指的是直接向建屋局购买的组屋，或向该局申请公积金购屋津贴购买的转售组屋。
然而，屋主可出租空余的房间，事先也无须征询建屋局同意。但屋主必须继续住在屋子里，并根据所购买的屋型遵守房间的出租顶限，避免屋子过于拥挤或对邻居造成不便。
三房式组屋顶多只能出租一个房间，四房式、五房式和公寓式组屋则最多可出租两个房间。
组屋的租户人数也有限制。三房式组屋最多只能住6人，四房式、五房式和公寓式组屋则顶多可以住9人。
HDB is supposed to help the citizen to own a house and not to make supernormal profit. If the trend is to continue, many Singaporean will be priced out eventually as the wage cannot catch up the hike in property price. What is the point of economic growth when people has decreasing purchasing power ? In the past, we worry about poor economics growth but today we are equally worried when the economics growth is exceptionally good. LHL deserved to be voted out because he will harm the country further if he is to continue to stay on as PM. A new PM is needed regardless of whether PAP stays in power!!!
I am a Singaporean holding Singapore citizenship. My cousin and his wife are both PR.
They have 2 children and they migrated to Australia 1 year ago.
Yet they still bought a HDB flat and rent it out. They are now in Australia enjoying Australian’s welfare and living.
In Singapore they too still enjoying the high rental income which is far more sufficient in paying the mortgage .
So Singapore making who rich ?
The government is supposed to keep housing affordable. Instead it embarked on a policy of jacking up house prices without the concommitant increase in our wages. It is simple. Let in a few thousand PRs and these will rush in to buy resale flats or new flats if they marry Singaporeans; without a commensurate supply of flats.
For the government, this creates a false sense of financial well-being for the current owners at the expense of future home-makers who have to buy their first flat. Second, it gives them an iron-cast reason to raise property taxes, at the expense of current flat owners. Very simple .. let in a flood of immigrants!
The government is no longer able to create real wealth for its citizens. In fact, the flood of immigrants from poorer neighbours has forced our wages down. I believe the real reason for the flood of immigrants at a time of worldwide recession is to garner support among the new voters since it has on its hands Singaporeans who are disillusioned by a non-performing government.
The policies of this government are disparate and disjointed. It has as many forummers said created ‘wayang’ and not delivered real benefit to the people.
Singaporeans will continue to suffer under the current government. This is a known fact. With a new government, there is still a chance of a better deal for the citizen; with the current one, it is a one way traffic.
Potong Pasir is an example. It is a much better run constituency than the PAP constituencies, inspite of the obstacles the government places on it. So it is time for change!
Yes , the resale prices are getting out of reach for first-timers. A 4rm resale flat cost more than 300k in Woodlands. you need 20 percent from CPF and substantial cash upfront known as cash above valuation and the monthly repayment is about 1k for 30 years.He needs to slog many years to pay for a roof over his family’s head!
I fully agreed with all that is written by David See in his letter.
I am just wondering what has Mr Horse Tan have to say about all this.
Although it has been frustrating that the actual cost of flats are not being reviewed, but I’m sure many readers are able to ask any normal contractors or their architect friends the rough cost of building an average HDB unit, and I’m sure there will be shocks, great angry shocks.
Go to many property exhibitions/showrooms, what are sellers/agents saying these days? Are they promoting dreams of owning homes or are they usually promoting speculative potential investment returns creating false sense of urgency?
Hi all,
You guys might want to take a look at this graph: HDB Resale Index vs # of PRs in Singapore.
http://i50.tinypic.com/5z1n5i.jpg
Dear Mr Mah Bow Tan,
Stop trying to comment something you don’t understand.
Before you comment sayig HDB prices will always go up. If thats they case, i would dare you to set our currency to gold standard or raise interest rates to 20% tomorrow lets see if your HDB prices still rockets for the next year.
Please know your role. You are a politician not an economist. Don’t blind us with “land-scarce” comment. Try stopping any foreigners into Singapore and let our population drop and tell me again if it will continue to rise when you are putting 12,000 units up for sale very single month for the next 2 years.