A rebuttal to PM Lee’s assertion that HDB flats will stay “affordable”
February 1st, 2010 | 
Author: Dear Mr Lee,
I refer to your comments as reported by Straits Times on 27 Jan 2010.
You said that the government has less control over prices in the resale market. You under state the power of your own government. Imagine if the government were to suddenly build 500,000 new flats all over Singapore. What would happen to resale flat prices? They will simply plummet. So by controlling the number of new flats being built, the government indirectly controls the price of resale flats. While the control is not direct, it is no less potent.
Even though resale prices are set by individuals on a willing buyer, willing seller basis, the willingness of a buyer to pay top dollar for a resale flat also depends on the availability or lack thereof of alternatives. It is because there are no viable alternatives, not enough new flats, that buyers are compelled to buy from the resale market.
You said that flats prices fluctuate from year to year. But that’s not the case over the last three years where prices have been shooting up higher and higher and does not seem to be abating at all.
You said that the value of our flats depends on the strength of our economy. But how come flat prices continue to go up even during a recession when the strength of the economy is at its weakest? Isn’t that a ‘daft’ argument?
You said that Singaporeans can enjoy an appreciating asset. But how real is that enjoyment? If I sell my flat at $100,000 profit, some poor buyer will end up making a loss of $100,000. So one man’s enjoyment will be another man’s suffering. Seen as a whole, Singaporeans do not enjoy more than they suffer. This is a zero sum game that contributes absolutely nothing to the productivity of our nation. Instead, it is like the transfer of money over a gambling table in a casino.
You said that the expectations and aspirations of the people have risen sharply. That is not the case. It is the price of flats that have risen sharply. It is not the case of us demanding more now. It is the case of us demanding that things don’t go out of hand.
Thank you
Ng Kok Lim
Posted in 43 Responses to “A rebuttal to PM Lee’s assertion that HDB flats will stay “affordable””
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Good questions. But the PAP will never ever bother to answer….
Mr Ng, your letter is well said and I fully agree with the essence of your points. Its a very different perspective than the perspective of the MM. Its a perspective of the “USER” as compared to the perspective of the administrator. May I bluntly but sincerely say the PAP Government and MM Lee has lost touch with the needs and sentiments of the poorer half of Singaporeans whose “vocabulary” is more on survival than “investments”.
Well done Mr Ng.
Your points are all valid. The only ones who gained are the government. Since they get to collect GST, stamp duty and the such on these transactions. In fact, it will be better for them to have more transaction. Also, these are paper profits. The only way to realise these profits is to downsize your flat or to move further…
Hi Mr Ng
did you send this letter to stitty time? I think the public should be aware of this letter.
It is a case of false demand and supply where the GOV control the supply forcing a false illusion that creates unreal demand. It could either been a deliberate move or HDB, together with MBT was not able to project the new flat requirements. Either reason shown that the GOV is incapable of managing public housing well that has driven up the price on housing, creating inflation on housing cost unnecessarily.
in fact, the gov can and will have control over anything if they wants to -either directly or indirectly!!! the question is whether they want or not? looks like Sgporeans got to use their votes to wake these ppl up!
re: Hi Mr Ng
did you send this letter to stitty time? I think the public should be aware of this letter
You think they will publish such letters, not in MM’s lifetime
Enough said . what if HDB prices are at all time low . Maybe HDB 5 room flat selling at 100k . Will that be ok . I am sure the sellers ( much more than buyers at any given time ) will scream their heads off and question the garman to raise the flat prices . Its never ending .
As a country , rising HDB prices is aways a good sign . The only thing now is while HDB prices have risen .the salaries of those new grads and those who have worked for about 5 years are LOW LOW LOW.
Therefore , the problem is the salaries , not the HDB prices .
If everyone earning 5k per mth , I’am sure they will not complain on the rising prices .
Got it ??? Please address the root of the problem .
If the garman were to bring down the HDB prices , we are all in trouble .
A transaction is a transaction is a transaction.
Willing buyer unwilling seller does not exist, unless coercion is used.
Willing seller unwilling buyer does not exist, unless coercion is used.
Unwilling buyer unwilling seller does not exist, unless third party involved, for example the government, the court.
HDB Flats are Not Assets. They have expiry dates. Millionaires will continue to tell you you are sitting on an asset. Well, tick tick tick. Times up, BOOM. Your asset will blow you up.
ok , let the garmen bring the HDB prices down 50% . Those first time buyers buying direct from HDB can sell their flats ( after 5 or more years ) at 10% profit only .
Those applying direct from HDB , are you happy ???
Those who already own HDB flat , are you happy ???
@ Onn@hotmail.com
Remember HDB motto is to provide public housing for the Singaporean to have a roof over thier head and not for speculation and made money out of it. If the price of 5 Room flat cost 1 million, can you pay with your $5000 salary? Come on and be more realistic, this is public housing and not private property.
I want to sell my 5 room at bedok for 800k but want to buy another 5 room direct from HDB at 250k , can ??
This is not a zero-sum game.
Asset values appreciating meant higher property taxes. The various fees that are accountable for the final sales also contribute to the government’s pockets.
So definitely, asset values appreciation is a must…in the eyes of the government.
Those who sell high must also buy high, so where is the gain? Like it or not, what goes up, must come down, and when it is too high, the bubble is just waiting by.
Hey, ka@hotmail.com on Mon, 1st Feb 2010 11:58 am, you have also not addressed the issue of first time buyers (including couples or singles) who have never gain and cannot afford to buy at this ridiculous prices. Many of them have parents to care for, among other never ending costs. So my question here is: Is it not the the duty of MBT to make HDB flats really affordable to these people?
actually the current market situation is unlikely to change? How to change? If you bought yours at 300K with 80% financing. How much do you want to sell in 5 years time? With a profit? So it can only go up. The question is how much and how fast.
Of course with foreigners buying up its not going to make it any easier.
Remember the excess glut of unsold flats in ‘ulu’ places like Sengkang, Punggol before 2003-4? Probably explains why the scums in white had been so aggressively importing foreigners to convert these flats into cash for Hole Jinx to gamble!
ok, new garman policy is no one can profit from selling HDB flats . You think you will be really happy ? Sure or not ?
Its like buying shares and cannot profit . You want this to happen ??
After 20 years , your 200k that you paid for your flat is still 200k hor , want this to happen ??
@ kangaroo@hotmail.com
“After 20 years , your 200k that you paid for your flat is still 200k hor , want this to happen ??”
Yes
mr ng
1. i am not a supporter of the PAP government, lest you go speculating about some conspiracy theory.
2. your arguments are illogical and weak.
You said that the government has less control over prices in the resale market. You under state the power of your own government. Imagine if the government were to suddenly build 500,000 new flats all over Singapore. What would happen to resale flat prices? They will simply plummet. So by controlling the number of new flats being built, the government indirectly controls the price of resale flats. While the control is not direct, it is no less potent.
my respond: build 500 000 new flats and have the entire property market come crashing, followed by the financial sector?
Even though resale prices are set by individuals on a willing buyer, willing seller basis, the willingness of a buyer to pay top dollar for a resale flat also depends on the availability or lack thereof of alternatives. It is because there are no viable alternatives, not enough new flats, that buyers are compelled to buy from the resale market.
my respond: no alternative? there are more empty new HDB flats than there are demand for them. more importantly, it was due to the exuberant en-bloc situations over the past 3 years that created huge demand for resale flats. do you want PAP to ban en-bloc?
You said that flats prices fluctuate from year to year. But that’s not the case over the last three years where prices have been shooting up higher and higher and does not seem to be abating at all.
my respond: again, en-bloc situation.
You said that the value of our flats depends on the strength of our economy. But how come flat prices continue to go up even during a recession when the strength of the economy is at its weakest? Isn’t that a ‘daft’ argument?
You said that Singaporeans can enjoy an appreciating asset. But how real is that enjoyment? If I sell my flat at $100,000 profit, some poor buyer will end up making a loss of $100,000. So one man’s enjoyment will be another man’s suffering. Seen as a whole, Singaporeans do not enjoy more than they suffer. This is a zero sum game that contributes absolutely nothing to the productivity of our nation. Instead, it is like the transfer of money over a gambling table in a casino.
my respond: mr ng, which school did you go to? zero sum game?
You said that the expectations and aspirations of the people have risen sharply. That is not the case. It is the price of flats that have risen sharply. It is not the case of us demanding more now. It is the case of us demanding that things don’t go out of hand.
my respond: i am saying that HDB has done a perfect job but your arguments are all fallacious. you do not make any sense at all.
without HDB, may i ask where will you be putting up now?
HDB flat prices increment in the long term has to be in tune with real income growth + inflation which depends on GDP growth.
From HDB resale price index, from 4Q 1998 to 4Q 2009, index has jumped from 100 to 150.8, compounded annual growth rate of abt 3.7% p.a.
GDP has increased from $138 billion to $251 billion, a compounded annual growth rate of abt 5.5% p.a.
sounds ok, no bubble. But, what if GDP growth don’t trickle down to many who are home dwellers?
median household income (1998)3692 median household income(2008) 4950
compounded annual growth rate abt.3% p.a.
3% compared to 3.7 %, any bubble,hard to tell,maybe? what if we can get growth statistics for lower 20% houshold income, i am sure their growth rate is lower than 3%,maybe even stagnant or negative. to them, surely the hdb price growth is a bubble.
after 2o years , interest likely to be 100k already . Selling at 300k is just break even
“You said that the value of our flats depends on the strength of our economy. But how come flat prices continue to go up even during a recession when the strength of the economy is at its weakest? Isn’t that a ‘daft’ argument?”
This is a very powerful question that will make any gahman any M impotent !
Sissy Lee and gahmen,
you are shooting yourself in the foot again. Whenever you open your mouth, you make a fool out of yourself.
“You said that the value of our flats depends on the strength of our economy. But how come flat prices continue to go up even during a recession when the strength of the economy is at its weakest? Isn’t that a ‘daft’ argument?”
PM Lee is trying to say that the HDB prices will shoot to the roof if the economy is weak . This will balance the GDP growth else everything will be negative and he will loose face .
@kangaroo@hotmail.com on Mon, 1st Feb 2010 12:52 pm
“After 20 years , your 200k that you paid for your flat is still 200k hor , want this to happen ??”
After 99 years, how much do you think the HDB will pay for the return of your flat?
‘Chee humped by me, siam’ said “Singaporeans can enjoy an appreciating asset”, so I say let it appreciate for 99 years first before I bequeath to my grandchildren.
Pay & pay don’t pay don’t stay simply as that
IS the HDB supposed to by “affordable” or “investment”? I just don’t see both can co-exist without hurting the others. When the prices are heavily inflated, it is good investment but bad affordability. If it is really affortable, then there will be less chance of making money out of it.
So is it “affordable” or “investment?”
Mr. Ng Kok Lin – I really do not know where the PM and MM and Minister of National Development get their logic. Consider this:
1. If I own a HDB apartment and live in it, I cannot sell to realize the price increase as long as I live in it. So where is the gain?
2. Assuming again that I have 3 children living with me and they each aspire to own their own flats. It makes no sense for these young mobile educated professionals to own a flat in Singapore because:
a. They have now to cough out S$ 100,000.00 more if they are in a hurry to buy re-sale units. Private housing is just too expensive.
b. To wait for a new-build flat would take too long and rental in the meantime is too expensive even for a Singaporean professional.
c. Migrate to another county and Singapore will lose valuable assets – which the PAP does not seem to care. We spoke of the talent drain but nothing has been done about it by this PAP government.
d. The HDB flats are already too expensive to start with compared to those in many cities e.g. Perth or Vancouver. For a similar amount, one can get a good abode say in Australia or Canada.
So this is a quad-edged problem.
3. The world has just gone through an economic crisis and has barely recovered. Singapore is similarly affected. It is most unusual that property prices in Singapore have risen during this time. Explanation is simple – it is because of the extraordinary high demand for housing due an increase in the influx of migrants without similar increase in quantity of flats available. Yet the Minister of National Development expressed surprise at this.
4. Whatever little gains Singaporeans make over the past one year of economic recovery cannot compensate for this increase in flat prices.
HDB, incoming immigrants and Singaporean migrating and minimum wages are issues are all interrelated. The government needs at least one or two coordinating Ministries if they are serious in wanting to tackle these problems.
We have a useless MM who does forecasting, a SM (we don’t know what he does!) who is all the time visiting other countries duplicating the work of the Foreign Minister, another SM who is Coordinating Minister for National Security (we also do not know what he coordinates).
PM Lee, the public should not tell you how to run the government like we do not tell SIA how to fly and operate an international airline. PLEASE DO BETTER !!!
how many times must i shout to make those PAPies listen!!!?
HDB public housing SHOULD BE FOR CITIZENS ONLY!!! If you are really attracting those real foreign talents they can easily afford to live in private housing and not fight with us for these govt flats. Unless of course we are not attracting the right kind. The answer is obvious.
Go chinatown – one miserable DBS ATM here, long lines!! bad Chinese New Year!!
http://andrewmichaelacquisition.blogspot.com/2010/01/effects-of-mass-influx-of-foreign.html
I did not know we have so many SMs. How many do we have?
Perhaps use the following equations to gauge the value/affordability of HDB flat:
1] Can your children pay off $500,000.00 in 20 years?
2] How much was the accumulated interested base on just 3%?
3] So how much do you think your children should resell after 5 years or 10 years? [after 20years the value is likely to be below $500,000.00] taking into consideration interest paid.
Looks like we are making a slave out of our children?
Since when did the mission of the HDB change to an investment institution?
I thought the goal of HDB is to provide affordable housing to the dafts. Please do understand dafts have little or no knowledge of investment otherwise how they lost in structured products. A flat is not meant to make profit – it must be affordable base on combine income vs type of flats payable in not more than 15 years. Finally how much is left in the CPF at age 65.? This is affordability.
To thomas lim
Need to respond to your post as you obviously is incapable of understanding the thrust of the letter.
“my respond: build 500 000 new flats and have the entire property market come crashing, followed by the financial sector?”
Mr Ng may have exaggerated the example but his point is that HDB can influence resale price. I go further to challenge that if HDB were to declare an immediate and indefinite freeze on new HDB prices, I bet resale price rise will stop in its tracks.
“my respond: again, en-bloc situation.”"
Huh? have you been paying attention? Have you noticed the huge influx of foreigners (PRs)? Have you not read about realtors confirming as much as 50% of buyers of resale flats are PRs? Only MIWs would dare to come out and say that he had a hunch its due to locals – is he braindead?
“my respond: mr ng, which school did you go to? zero sum game?”
Perhaps Mr Ng could have expressed this idea better in saying that if you are like the 80% singaporeans staying in HDB, you only own 1 flat. You sell high, you buy high. You can’t realize your profit unless you emigrate or move in with your kids. If the price rises and you have 2 kids, you lose more as a family.
Perhaps you do not want to understand. Which school did you go to? Perhaps they didn’t provide you the notes and hence critical thinking is beyond you. Too bad. MIW love your kind.
He has a first class honors in mathematics from Cambridge. I hope he can come out with some good mathematics to explain HDB prices.
Good Folks,
I think the higher ups in the PAP should look at this…
http://www.peterparkinsonsprinciples.blogspot.com/
and re-think really deep about where we all are heading…the end of a cliff or a better tomorrow for all.
Its amazing that 1st world singaporeans could stare into the eyes of fellow citizens daily like this question does not exist.
LOL
Good morning gentlemen,
Please don’t forgot the Lee’s owned Sillypore. We are cattle, livestock to them. They can do what they want, we complain , give suggestion. End result, things are still done their way. No need explaination to us because they assume we are too simple minded to comprehend their masterplan. Only by joining them, and being part of the govt elite can u benefit. If they are paying u an annual wage of 1 million SGD, will u still voice out against them ? Those who are born rich will not understand the common folk’s problem. In my NS days, I had one b@stard rich man’s son asking me whether I had spare change for a 500 dollar bill. Flaunting his parent’s wealth as if he is already earning money. Their karma is better than us like some young PAP member said.
There are PRC families who bought our resale flats & then rent out the spare rooms & even living rooms, to other PRC workers.
They do not need to work, just collect rent on per head basis (can u imagine one 3 room flat can sleep how many PRC workers?)
The rent is enough to Relax in our Singapore. When they had enough of fun, they can sell the flat back to Singaporeans & make another nice tidy sum & go back to PRC.
thomas lim,
your arguments are illogical and weak.
you have not answered the the writer’s question. if 500,000 new flats were built, would resale flat prices continue to stay put? unless you answer the question, you have no case.
furthermore, during the crisis months, the stock market plummeted while property prices continue to rise. so the correlation between stock market and propert market may not be as tight as you have suggested them to be.
where do you get the facts? what is the number of empty new flats? what is the number of applicants?
it is good that you recognise that en-bloc is also contributing to the problem. but have you ever thought of what is causing the en-bloc problem? if there is no horde of foreigners coming in, en-bloc for who? so the root of the problem is still the same. there are too many foreigners coming in in too short a time.
i think it is not a matter of which school mr ng went too. because if these are beautiful arguments, it doesn’t matter which school he comes from. they’re still beautiful.
zero sum game is not too difficult to understand. you probably would have come across it if you had ever been to school.
what you say counts as nothing unless you can prove it. HDB has not even done a satisfactory job let alone a perfect one. and there is more than enough evidence to prove it. what have you got to prove?
if you can’t prove that mr ng’s arugments are fallacious, then you have no right to claim that they are fallacious. it only shows that you have no substance to back your claim.
there could be one of two reason why they don’t make sense to you. one, you refuse to accept the logic. two, you are too ‘daft’.
taiwan doesn’t have HDB, do you see taiwanese living on the streets? without HDB, alternative organisations, private and public would take its place and possibly do a better job.
Onn@hotmail.com,
you are talking about a sudden drop in flat prices. but that is not the situation we are in now. the situation we are in now is the sharp, sudden increase in flat prices. mr ng is simply saying too high is evil. he didn’t say too low is good. you are right in saying that too low is evil too. so to avoid both evils, we should neither have it too high or too low. control is therefore important, which is exactly what mr ng is asking for.
so rising HDB prices on its own is not necessarily a good sign. whether it is good or bad, can only be judged in comparison to how well the people are doing.
which is exactly what mr ng has always been saying in many of his other letters.
if you can recognise that when HDB prices go down, there will be people who will be in trouble. surely you can also recognise that when HDB prices go up, there will be other people who will be in trouble.
Onn@hotmail.com,
even if salaries keep up with housing prices, it still doesn’t change the fact that it is unfair that the buyer is paying more for nothing to the seller in a rapidly increasing property market.
OR I can say is that we have to get REAL.
Like some guys commented.
Up – existing owners happy..(parent happy)
Down – existing potential buyers happy.(children happy)
We had been advised to buy within our affordability.
Affordability – got money buy bigger unit 0r smaller unit in matured estate like Queenstown,Marine Parade,Toa Payoh etc..
Not enough budget – buy units in outskirt areas – Pasir Panjang,Chua Choo Kang, Punggol n may be Lim Chu Kang down the road.
Solutions : built plenty of houses n don’t wait for orders.
Waiting for orders, two to three years down the road to get your house …population increases again coming from FOREIGN TALENT and unskilled WORKERS .(2.5mio to 4mio and we expect to see 6mio) 60,000 flats to be built yearly? Hopefully HDB done their planning correctly orelse when we see the population increase first…HDB has to scramble for more houses to cater for them. Worst still,some suggested to have restriction on holding period which would caused prices to shoot even higher due to shortage of supply. Rental will shoot up too as foreign worksers are unable to buy in the secondary market for a period of time after becoming PR .They are our pillars of support for continuing economic growth.
So my thinking is …just buy the one we can afford as no matter where you look at it…population will continue to grow as we need enough people to replace the old folks too and they live longer nowadays. Moreover, shortage of land like Singapore…and may be reclamation of land down the road is more difficult as other countries also seeing a depletion of theirs are also facing the same problem.
At best..price may dip a bit or stablise at this level as demand continue to be there as we see more HDB upgraders and en-bloc sales rich people to snatch up hot and favourite units.
The longer we wait…more people coming in to join the crowd …we get squeeze even further…
So do we continue to talk and ask HDB to built without orders to the tune of 1 mio units. For that I am sure, HDB prices were definitely down…my parents will be crying..for those who bought at high levels will be crying to service their loan and the result would see 2 – camps again. Father and Son.
Read this old speech by Goh Cock Talking on gracious society.
Looking back, do you feel you have been coned?
http://stars.nhb.gov.sg/stars/tmp/gct19900530.pdf
The Statement of the Year!
Which the PAP millionaire club doesn’t and probably could never understand.
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