Mah Bow Tan claims that HDB flats remain “affordable” and asks Singaporeans to buy a flat “within their means”
January 14th, 2010 | 
Author: Written by Our Correspondent
For the second time in a month, National Development Minister Mr Mah Bow Tan had reassured Singaporeans again that “HDB is committed to ensuring a sufficient supply of new flats and keeping flats affordable, especially for those setting up their first home.” in a written reply to a question from Madam Ho Geok Choo (West Coast GRC).
Two weeks ago, Mr Mah admitted he had been “caught off guard” by the sky-rocketing prices of resale HDB flats which hit a record high in June last year, fueled partly by the relentless influx of foreigners into Singapore.
Below is a graph illustrating how the rise in the prices of resale flats coincides with the rise in the number of foreigners in Singapore between the years 2000 and 2008, courtesy of Kojakbt, the moderator of 3in1kopitiam:
Due to the ruling party’s liberal immigration policy, foreigners now made up 36 per cent of Singapore’s population, up from 14 per cent in 1990. According to Home Affairs Minister Wong Kan Seng, there are over 20,000 new citizens and 90,000 PRs last year.
As PRs are permitted to buy resale HDB flats in Singapore, their rising numbers had led to an increase in demand for public housing. Propnex CEO Mohamad Ismail estimated that 20 per cent of the buyers of HDB resale flats are PRs. Another real estate agency, C&H quoted a figure as high as 50 per cent.
PRs frequently “spoil” the market by overpaying for HDB flats. An Indonesian PR paid an astonishingly high price of $653,000 for a 4-room resale flat in Queenstown when he could well afford a private apartment. As the prices of new flats are pegged to that of resale flats in the vicinity, this led indirectly to the high launching prices of the Dawson project in Queenstown a few months later.
Despite Mr Mah’s repeated claims that there is “adequate” supply of HDB flats to meet public demand, it appears that his ministry had failed to plan ahead for Singapore’s increased population now a few years ago as evident from the housing statistics provided by HDB in its financial report for FY2008/09.
[Source: HDB Financial Report 2008/2009]
As we can see from the above figures, the number of flats built by HDB for the last three years average about 3,ooo plus a year which is way below the number in the preceding 5 years.
55,515 flats were built between 2001 – 2005, or an average of about 11,000 flats a year. From 1996 – 2000, 158,621 flats were built.
Why are there fewer flats built when the rate of immigration was increased during the same period of time between 2006 – 2008?
It doesn’t take an economist to figure out that the rising demand for public housing in the face of limited supply of flats will lead to inflation in prices with some first-time home buyers missing out on their choice of flats or being priced out of the market altogether.
In two recent sale exercises of BTO and balance flats, they were more than 10 times over-subscribed, an indication of the severity of the housing shortage on the ground.
[Source: HDB Financial Report 2008/2009]
We can see from the above table that there were 9,870 bookings for new flats for only 3,183 units completed in 2008.
Mr Mah also said that “the onus is on Singaporeans to play their part by buying a home within their means.” He had previously castigated first time home buyers who have been complaining about not being able to get a flat of their choice for being “choosy”.
Quoting the affordability benchmark of 30 per cent used frequently by HDB to show that HDB flats remain affordable to ordinary Singaporeans, Mr Mah said a family with a monthly income of $3,000 can buy a flat worth up to $250,000 and spend only 30 per cent of their income every month on the mortgage.
“Similarly, a family with a monthly income of $4,000 can afford to buy a new flat worth up to $333,000 without spending more than 30 per cent a month on the mortgage. This means they can comfortably buy any of the flats offered in the latest BTO projects this month,” he added.
However, Mr Mah fails to take into account the bank interest rates and inflation over the years which will lead eventually to the family spending more than 30 per cent of their monthly income on the mortgage.
Furthermore, after depleting their entire CPF for these over-priced 99-year leasehold HDB flats, they will have little or no savings left for their retirement.
It appears that Mr Mah and his colleagues are unable to comprehend the hardships and sufferings of ordinary Singaporeans, especially first-time home buyers who are under great stress to afford a roof over their heads.
In an earlier statement, Mr Mah even urged home buyers to be “realistic” in their expectations of public housing saying that HDB cannot meet all expectations of home buyers even though the standard of housing has increased over the years.
Singaporeans are paying Mr Mah’s unrealistic salary for him to come out with such unrealistic statements. Perhaps the ruling party should be more realistic of their expectations in the next GE as well.
Related articles:
>> Grace Fu: hard to predict demand for housing
>> Indonesian PR bought 4-room flat at $653,000
>> Mah Bow Tan asks home buyers to be realistic
>> PAP MP blames young couples who cannot get a flat for not planning ahead
>> Home affordability: HDB versus the public
>> Demand vs supply: so many applicants, so few flats
>> Number of applicants exceed number of flats
>> HDB to increase supply of flats
>> Mah: don’t compare with prices in the past
>> ERA: 40 per cent of HDB flat buyers are PRs
Posted in Headlines
50 Responses to “Mah Bow Tan claims that HDB flats remain “affordable” and asks Singaporeans to buy a flat “within their means””
Loading ...
Alex Tan Allan Ooi AWARE Chee Soon Juan Chiam See Tong Claire Lee David Widjaja DBS Dr Allan Ooi Dr Silviu Ionescu Dr Vivian Balakrishnan Foyce Le Xuan highnote5 Hong Lim Park Jack Lin Xinli Jack Neo Jack Neo affair Jack Neo scandal Josie Lau Josie Lau Meng Lee Lee Kuan Yew Lehman brothers Lighthouse Evangelism MAS minibonds Miss Singapore World NTU stabbing PAP Pastor Rony Tan Ris Low Romanian diplomat in hit-and-run Rony Tan S-League silviu ionescu Singapore Singapore 2010 Youth Olympic Games Tan Kin Lian Thio Su Mien Tiger Woods affair Tong Kok Wai Top 8 Vivian Balakrishnan Wendy Chong Y O G Youth Olympic Games
WP Cumulus Flash tag cloud by Roy Tanck and Luke Morton requires Flash Player 9 or better.
Saw a Telok Blangah one room, 35-year old, 2nd floor flat on sale for an “affordable” $157k. I guess Minster of Foreigner Development Mah Bow Tan wants us to figure out how to squeeze a family into this one roomer “palace”.
Mah Bow Tan is an idiot. The ruling party has lost touch with the middle/lower income groups. Their fixation on GDP growth does not always translate into greater good for all Singaporeans. So the GDP is up 5% but the cost of living has risen 10% and my income is stagnant, what’s the point?
Dear Mah Bow Tan,
I think you better ready yourself to be booted out of Tampines GRC and also update your resume, you may need these preparations.
During coming GE rally, people are going to downpour questions on you like no tomorrow.
People are going to ask you why didn’t you take precaution in dealing with the spiralling up of HDB flats. Please don’t give a stupid answer like, “Caught Off Guard”. Makes people wonder what are you doing during office hours.
People are going to ask you regarding, the cost of construction. Which you, your HDB folks as while as the mainstream media have been very very disturbingly silent about these figures. Show us the cost of construction.
People are going to ask you, why is public housing meant for Singaporeans, sold to foreigners?
People are going to ask you for the statistic of the number of Singaporeans unable to purchase these so called “Affordable” flats.
People are going to ask you the statistics on what are the number of housing arrears.
People are going to ask you a breakdown of demo graphics of how many Singaporeans new applicants, PRs and foreigners are trying to buy new flats.
I believe millions of Singaporeans would appreciate if you can spell out the cost of construction of 3 room flats, 4 room flats, 5 room flats and so on, so that we can see how much is HDB really profiting from these spiraling prices.
Singaporeans are looking into the cash flow of HDB and want to see whether 2 billion deficeit is true or not.
Here’s a good chance, to display some character and conscience on your part as well as your Tampinese GRC teams to answer these important questions.
Paying you millions makes Singaporeans look like fools for having you in the Cabinet.
Please stop lying and side stepping issues and giving non-answer, unless you have a politcal death wish… to be voted out.
Go ask him, a relative of mine, a Single Parent, with a Daughter, and earning only $800 a month.
WHICH LOCATION SHOULD THIS RELATIVE OF MINE STAY IN? AFFORDABLE, AND ONLY 30% OF HER INCOME.
Go on, MBT, you idiot who screwed up road affordability last time, and now housing.
@Terence Goh
He says his 3-room flat then was a ‘paradise’…
good stuff,boys.
30% of a SGD3,000 take home household income = SGD900.
The family have SGD2,100 left to juggle with their property tax, (phone, tv, utilities) bills, daily food and transport allowance. For a family of 3 (parents and child), there is nothing left for their own savings or even educational classes for the kid. (Bearing in mind that most schools DEMAND their students to take up tuition classes outside of school hours to keep up with the “pace of learning’.
Maybe Mr Mah is talking about his annual take home pay of SGD2+++Million. 30% of it can settle the HDB unit within 1 year. Of course, he’s being realistic. Its just that over 80% of the Singaporeans are out of touch with the times. Its not his fault, of course that people are poor are just cannot afford to buy his ‘affordable’ government housing.
People should reflect on why they cannot afford and not him or his team. Mr Mah and his team are always right.
No money, can always borrow from the banks. Banks don’t lend? There’re always loansharks. That’s why the government came out to ‘regulate’ the loanshark sector so people can have access to them and not suffer ‘undesirable’ actions for defaults, if that happens.
To each his own…that’s the logo these days.
news of a 2 rm flat sold at 245000, still “affordable”?
(even though the standard of housing has increased over the years.) – definitely not,newer built flats has more defects than older built flats, due to shoddy workmanship(because of low cost labour) and low cost material used.
Monthly payment (over 30 years) for a 250k flat is 1000.85K (if zero downpayment made)
Monthly payment (over 30 years) for a 250k flat is 900.76 (if 10% downpayment made)
Monthly payment (over 30 years) for a 250k flat is 800.68 (if 20% downpayment made)
3000 monthly income gave rise to 1035 CPF contribution, of which 690.345 goes to ordinary to pay for the flat.
That leaves 2400 a monthly take home. In all 3 scenario, the person would have to pay at least another 110 to service the housing loan for the next 30 years.
if that person is above 35, he would have to fork out more.
That leaves about 2290 a month take home effective if I don’t add it all the town council charges and hdb taxes.
For a single income family, how is 2290 sufficient? say he has 3 other members and a mother to take care of? Everyone get 400 a month?
For the next 30 years?
This is a joke.
I forgot to add.
Transport in Singapore is very expensive.
Looking at the figures, there is a reason why singles stay single in Singapore.
How to afford living in Singapore?
The only way to make HDB affordable is to kick MBT out of office.
Aiyoh! Why is this idiotic nerd deliver utterances again and again without proper facts and figures? May be the university of nsw had conferred this nerd wrongly, instead of First Class Honor in Industrial Engineering, it should be First Class Honor in Utterances of Rubbish!
What types of assurances he is giving to born and bred Singaporeans when the BTO flats in Dawson is costing close to half a million for a FOUR-ROOM-HDB-FLAT and the hdb-4-room flat in Duxton Square can elevate with DOUBLE increments within 3 years since the day the project was launched! Is this his definition of affordability when the salaries for the man-street-men or simply working class people have only increased marginally over the years yet with exorbitant elevation of prices in the most humble housing sector?
It is better for him to SHUT-UP and KEEP-QUIET than to further annoy the already disgruntle citizens whom have not only need to support their aging parents, school age going children, competitions from fts/prs for jobs so as to remain gainfully employ, last but not least take-up “affordable-public-housing-mortgages” stupidly defined by this nerd and finally, slave for another solid 30 years to pay off the 99 years lease-hold flats; mind you, just a humble flat, not land and, no ownership of the property but just a lessee.
Just a gentle reminder, I told you already, why must hdb takes care of born and bred Singaporeans since these people are too feeble to content as hdb has the sole prerogative in Singapore to provide “lowest rung of housing–most humble cover over one’s head” to needy Singaporeans!
With the solid 60% credulous voters who support the ruling party blindly, what can the needy Singaporeans do but to settle to the destitute home for the homelessness or simply sleep at the neighborhood parks or camp at the beaches and finally, waiting for the eviction cum arrest by the Singapore Police Force.
It is really, really sad and shame to be a born and bred Singaporean whom forefather help unselfishly in building-up this mercenary and soulless country with his blood and sweat at the same time multiply the state coffer to such a gigantic sum of hundreds of billions of US$ by paying taxes diligently and assiduously over FIVE solid decades! But, now those steadfast and hard striving forefather’s off-springs end-up not only losing of jobs cum gainful employment to the fts, prs and worst cheap foreign slaves; but resulted in living in abject poverties and destitute conditions.
Where is the justice? Only god knows!!
Dear friends
Just to share with you about costs here:
I recently received a brochure from SP Setia Bhd Group the builder of the Orion Link Bungalow at Bukit Indah located in the heart of the Iskandar Malaysia (JB). The cost of a link bungalow on freehold land is S$375,000. The land area is 3,000 sq ft and the built-up area is 2,800 sq ft. Let us assume 50% to be land cost and 50% to be construction cost, it will cost only S$187,500 for a 2,800 sq ft of built up area. We really need to know how the govt is pricing its HDB flats. It creates a false conception that HDB flats are greatly subsidized when they are priced sky high.
Seriously, are the ruling elite actually living in Singapore? Or even from planet Earth?
Where do they come up with these ideas and statistics?
1. Singapore homes are affordable?
2. People are earning an average of $2,400.00?
3. Jobs are available? (http://www.asiaone.com/Business/News/Office/Story/A1Story20100113-191670.html)
How can a man who is a Millionaire Bureaucrat understand what we are facing? Or does he think that everyone earns the same as him? At his salary, of course it would seem to be affordable.
This is a sick demented joke from the ruling elite.
There is also this issue:
if they build so much, and if the ft leaves en masse, they will leave behind a pile of shit for s’poreans.
That’s a nice article.
Your article shall be more complete if we consider an additional 1million people vs less than 100 thousands dwelling units built from 2000~ 2009…
—-
Assuming 0% non-residents growth (~900k in 2007), 1% citizen growth (~3.13m in 2007), our total population shall hit 6.5m in year 2052 (at 1% PR growth), 2047(at 2% PR growth), 2041 (at 3% PR growth), 2037(at 4% PR growth), 2033(at 5% PR growth) and 2030(at 6% PR growth).
a. Our PR population growth was at 6% in 2008.
b. Our total population stood at 3millions (in 1990), 4millions (in 2000), 4.99 million (in June 2009).
Our total population shall hit 6.5 million much sooner than earlier thought (according to MBT, 6.5million is a long-termed populaton planning parameter stretching for 50 years, year 2057 to be exact).
too bad for the next generation. Their parents better be rich or else they are 100% screwed big time
ill gladly camp at Changi Beach than pay obscene amount for a pigeonhole.
I think the formula for predicting housing demand is flawed becos the current method that HDB increases the supply of housing is by BTO. ie they build new flats only if people request/book for it. compared to the times where HDB builds first and then lets the people book it as the project is on the way.
However, there is an increasing number of people that are not eligible to but new HDB and have to turn to the resale market (eg. PRs and ppl earning >$8000) Hence, the supply and demand do not match because the yardstick to measure is different in both case. Hence now we see the trend of rising HDB resale prices.
hi there
1. what’s the definition of affordability to the horse?
2. pay public housing from the cpf for some 25 and 30 years.
3. and after that, manage to “secure’ a roof over our heads.
4. with little much left for retirement and to maintain a quality lifestyle.
5. or to borrow here or there to make up the difference.
6. is this the quality of life we voted for man?
7. i will never trust some horse’s mouth!
8. pinnacle@duxton is an eyesore.
Weil Ng, 14th Jan, 12.16pm
Hmmm…….the Logo??…
I think should be …………” we were finally struck by the Lighting and died without knowing what happened? “
“I think you better ready yourself to be booted out of Tampines GRC and also update your resume, you may need these preparations.”
Don’t kid me. If you want the voter to kick out Mah, you got to kick the Lee first. It is the Lee that put Mah in charge to earn large profit at the expense of the citizens for the Leegime. For your info, Mah has lost his election before and still stay on as minister because Lee want him to make money for him. You want to kick out this asshole, kick the Lee’s family and PAP first.
Well,I think the government can monitor the demand situation
if they want to.
Afterall,we are not that big a country and the foreign influx is really wihtin their control too.
What is truly missing in action,despite all the talk,is SINCERITY and CARING for native-citizens.
It’s the same old story but look how fast they can act on certain matters like rasing GST in a downturn that haven’t been
upturn steadily?How about ERPs,is there no smarter and more honest citizen-centred solutions?
So much for sending our “sons and daughters’ on overseas scholarships with hard-earned taxpayers’ money.
I am very sure out there in the WWW, there must be an article that will show the population in Singapore in 1970, 1980, 1990, 2000 and 2010 versus the number of HDB flats available by type, and thus give a projection to the “liveability” of Singapore
I am also very very sure this statistic will show houses are growing damn slowly compared with population exponentially. I know this is for sure because otherwise, Straits Times and HDB will already by harping on this figure!!
Can someone compile this please?
As long as there is a chance to vote , we will kick his ass . This is not an option ..
We are actually paying millions to these ministers for their lousy planning?
pls dont said Mah Bow Tan is an idiot. He is just living in his own world which doesnt exist in this world
1. How many private condos and landing property MBT owns in SINKaPoor alone?
2. Is he – MBT – accusing us of buying flats beyond our means? Since he said they are affordable and HDB DOES HAVE “Income range and limits”. MBT may like to tell us if they are congruent with flat prices he kept increasing?
3. Does he MBT mean we should to buy smaller flats and then no big flat to sell for downgrade upon retirement or better when retrenched BEFORE retirement age?
4. If that is PAppies’ true and worthy intention, WHY then did GCT during his PM tenure, lower the Eligibility Income Ceiling for larger HDB flats from 4 to 5 Rooms to Executives? Wasn’t this ENCOURAGING people to buy BIGGER THAN they can afford too then AS GCT was PROMOTING Property UPgarding for Swiss Standard Of Living (1986/7?) wasn’t he?? ANOTHER OF Pappy GOOF? And so…
5. KO-LAI-LO! Meaning “There they go again” in Hokkien!
Let him talk cock sing song………every dog has its day.
Sorry hor, they are paying themselves out of the taxpayers’ kitty – in malay they say – suka suka – that means it loosely translates as you wish lar. Why? Cos in a one-party system anything goes. Who is going to question, who is going to check Le me be blunt lar – they are taking Singaporeans for a ride and now that they are abit weary of what is or could happen during elections – they are desperate and one good eg – the FT policy. Falling birthrates and economic contribution – excuses, lies and lies. That in itself is enough. HDB – has it ever been truthful? Who is going to verify the pricing? We have been sold out and sold out BIG time.
My answer is always this lar – cos of the one-party rule – everything is going awry for Singaporeans.
This guy is still trying his best to cover his incompetency (or maybe someone else) by blattering nonsenses as if Singaporeans are fools. Must well spend more time praying that he’ll not lose by much in the next GE
HDB = Hole Damn Big or Tua Kang
By voting afew more oppositions in the parliament will Not change anything.
The only way to change the situation is to change the government.
No one or any political party is indispensable.
if you see it this way..
flats r getting smaller n smaller each time they build… soon not many can afford to pay for a 5rm flat.. then they will start building 3 & 4 rms.. n the area gets smaller but the prices dun chg much.. soon we will be like japan.. $1m for a 5rm flat, takes 2 generations to pay off the debt and guess wat retire with no savings…
As far as i can remember, Tampines GRC has always enjoyed strong PAP support and it is doubtful that MBT will be booted out in the next GE.
at this rate, we will be sleeping at the road side soon!
Correction:
3,000 per mth = 36000 pa.
250000/36000 = 6.94 times of annual income.
According to international standard, if the price over annual income is greater than 5, it is very unaffordable.
Mah Bow Tan, stop fooling the citizens !!!
MBT thinks that the citizens are fool and will accept whatever rubbish that come out of his mouth !!!!
PM should be booted out as well because he is MBT’s boss!!!
DUDE HE CAN’T CHALLENGE OUR CALCULATIONS AND FIGURES SO HE KEEPS INSISTING THAT IT IS AFFORABLE, HOPING THAT IT’LL BE ENOUGH TO CONVINCE US BY BEING CONFIDENT. BUGGER, LETS JUST FIREBOMB HIS HOUSE AND FORCE HIM INTO HDB.
I m very angry with MBT. My family and friends, who were pap voters, will not be voting for him this time.
MBT is like a bad brand. Anything with MBT on a shirt will Lay Long for a penny.
Mah Bow Tan, you must be questioning the IQs of Singaporeans when you said those words.
Let’s see whether the Singaporeans living in Tampines stand up to your test in this coming elections.
I can’t wait to see…
Too bad no chance to vote….2 years ‘Walk Over’ liao….gei tio
why did we have the worst financial crisis in the last 50 years and the price of HDB did not fall significantly?
Yeah right. $245k for a 2 room flat is “affordable”. If you worked it out according to floor area specs and ratios, it means the owner paid close to $50k for a jamban.
Who are we kidding? Property prices have hit new highs in the most absurd of ways, and I now suspect there is a price floor being maintained (for whose benefit, the sellers, or…?)
Of course, now that we opened this can of worms, some wise-ass FT or PAP supporter will start posting up comments like “thank God I don’t live in a HDB because of GOOD KARMA” or something like that.
Disclaimer: I don’t live in a HDB, but does that matter? Ultimately, ALL property types, even a bloody kelong, would become unaffordable. Get real, minister.
Either he is very incompetent or he is deliberately jacking up prices so he can walk away with a bounty in bonuses.
MBT, we are not stupid and we know your game!
@anonymous
The worse financial crisis has no ‘collation’with the high price of HDB housings!!
Is there a conflict of interest if he is allowed to invest in Singapore properties while being the Minister of National Development? Should he be made to disclose publicly his and his immediate family’s property ownerships? This is just like an insider in a publicly listed company having to disclose whenever they buy or sell shares. We should push for that.
to just citizen
>> u mean “correlation”
so why is there no correlation? all asset prices goes down except HDB prices, what does that mean?