Mah Bow Tan claims that HDB flats remain “affordable†and as
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Mah Bow Tan claims that HDB flats remain “affordable” and asks Singaporeans to buy a flat “within their means”
January 14, 2010
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.
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Shorty Mah is not wrong to say that HDB flats remain affordable. It is true it is affordable to him and his PAP gand and elites.
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Time to vote out Mah then.
Bye bye mah bow tan.
This year will be your last year drawing highest pay in the world and talking rubbish to people.
bye bye.
On a last note since you are leaving mah bow tan.
What hapened to GOAL 2010?
This year is 2010 and Singapore is not in world cup!
You failed.
goodbye.
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shorty mah was voted out before but strange and unfathomable why is he still in GRC.
dirty game??
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shorty mah was voted out before but strange and unfathomable why is he still in GRC.
dirty game??
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it is well known that Mabok Tongue is the Chief Liar of the MIW
for a while i thought he wanted to hand over that title to others as there were many pretenders to his title, but looks as if he's fighting tooth and nail to cling on to that title
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Woei, vote him in leh, Shorty Mah is very cute, i like to hear him talking...
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Originally posted by the Bear:
it is well known that Mabok Tongue is the Chief Liar of the MIW
for a while i thought he wanted to hand over that title to others as there were many pretenders to his title, but looks as if he's fighting tooth and nail to cling on to that title
Isn't that smart and clever?? -
Originally posted by the Bear:
it is well known that Mabok Tongue is the Chief Liar of the MIW
for a while i thought he wanted to hand over that title to others as there were many pretenders to his title, but looks as if he's fighting tooth and nail to cling on to that title
Specially hand picked.
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Mah Bow Tan claims that HDB flats remain “affordable” and asks Singaporeans to buy a flat “within their means”
mah, what happened to goal 2010?
We are in 2010 now.
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A rebuttal to Mah Bow Tan’s claims that HDB flat values will always go up
January 4, 2010
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?
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Originally posted by Great1:
Mah Bow Tan’s claims that HDB flat values will always go up
I only know PAP ministers pay will always go up. GSt will always go up. ERP rates will always go up. no. of aliens will always go up. people sick and tired of PAP migrate also will go up.
Singapore will play in 2010 world cup. That's all I know.
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considering Chiam See Tong beat Mah Bow Tan long ago, but Mah became some minister in parliament (wonder why), u can't really expect so much from him anw. i tink the most important issue for singapore now is foreigner influx. coz once we take that out of the equation, alot of problems would be solved. throw one stone kill 2 birds
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Originally posted by DouglasBitMeFingerBoomz:
considering Chiam See Tong beat Mah Bow Tan long ago, but Mah became some minister in parliament (wonder why), u can't really expect so much from him anw. i tink the most important issue for singapore now is foreigner influx. coz once we take that out of the equation, alot of problems would be solved. throw one stone kill 2 birds
But we all know it is beyond us to get these foreigners leave or come sg. -
Originally posted by DouglasBitMeFingerBoomz:
i tink the most important issue for singapore now is foreigner influx. coz once we take that out of the equation, alot of problems would be solved. throw one stone kill 2 birds
Opposition must attack PAP fiercely during elections using this issue and crush and rout them out. PAP must lose.
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Originally posted by Fantagf:
But we all know it is beyond us to get these foreigners leave or come sg.If a government that is anti-immigrant comes to power?
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HDB’s reply on flats for foreigners – a conflict of interest?
Thursday, 14 January 2010,
Leong Sze Hian
In my letter to the Today newspaper titled, “A precious resource”, I had asked why two blocks of flats in Toa Payoh were being reserved for rental to foreign workers from the two Integrated Resorts (IRs). I had said that HDB flats, being public housing – a precious, limited resource, and much in demand – should only be reserved for Singaporeans.The HDB replied to my letter in Today titled, “Priority given to truly needy”.
The HDB’s reply states:
“The flats cited by Mr Leong Sze Hian are vacated flats due for demolition. In the interim, they are being used for short-term rental”.
This does not address the point that I was trying to make in my letter, which was why thousands of needy Singaporeans have to wait for more than a year before they are able to rent a flat, when these IR foreign workers can rent upon their arrival in Singapore.
Shouldn’t these “vacated flats due for demolition”, which were vacated by Singaporeans in the first place under SERS (Selected En-bloc Redevelopment Scheme) and “being used for short-term rental”, be given to needy Singaporeans instead of foreign workers?
Also, why does it take so long (two years) to demolish flats under the SERS programme?
Who is the HDB, whose mission, duty and responsibility, is to provide affordable public housing to Singaporeans, to arbitrarily decide that these flats are not suitable for needy Singaporeans, but suitable for foreign workers?
For every flat rented to foreign workers, there may be needy Singaporeans deprived of it and are living and being homeless at a beach park somewhere in Singapore.
The HDB says that “Mr Leong alleged that foreign workers pay much less than Singapore citizens when they rent flats.” The reality is that Singaporeans have to pay at least $400 to rent a room, compared to these foreign workers who pay as low as $140.
Even under the HDB’s Interim Housing Programme, designed to help needy Singaporeans who cannot get a HDB rental flat, rental starts from $400 a month to share a flat, as I understand it.
If EM Services, the HDB’s managing agent or the HDB itself starts advertising to rent out these two blocks in Toa Payoh to Singaporeans who are willing to share a room/flat, I think they may be taken up in no time.
The fact is that there is no rental scheme available to Singaporeans to rent a shared room/flat from $140 in the open market.
According to EM Services’ web site, it was founded as a joint venture between the HDB and Keppel Land Limited.
Is there a possible conflict of interest?
The HDB’s letter says:
“EM Services Pte Ltd, HDB’s managing agent, rents these vacated flats at prevailing market rates with no special rental concession or subsidies. Current market rent is about $1,500 per month for each flat”.
The HDB also says:
On the other hand, HDB provides highly-subsidised rental flats under the Public Rental Scheme to eligible Singapore citizens, with rents as low as $26 per month.
Clearly, one would make more money renting the flats for $1,500 than renting it for $26 under subsidised HDB rental schemes.
The HDB should not on the one hand be the sole provider of rental flats to needy Singaporeans, and yet also at the same time have an interest in a company that rents HDB flats to foreigners for a profit.
With regards to the HDB’s statement that “[those] who are assessed to require housing urgently are given priority allocation”, why are foreign workers given priority over Singaporeans for these two blocks of flats?
HDB says that it “will be building 7,500 units of new one-room and two-room subsidised rental flats in the next three years to cater to Singapore citizens who are in financial difficulties.” Is this not an admission by the HDB that many more Singaporeans are in financial difficulties in respect of housing, despite its consistent rhetoric that HDB flats are affordable? (“80% pay flats with CPF”, ST, Jan 13).
There were:
- 30,770 HDB loans in arrears over three months as of September 2009,
- An estimated 50,000 plus in arrears over three months in their Service and Conservancy Charges (S & CC)
- About 77,200 households in arrears on their television licence fees which is only $110 a year (“Why viewers must pay fees on time”, Today, Jan 5).
Looking at the above statistics, is it any wonder that despite more than 40,000 rental flats now, another 7,500 will be built in the next three years?
The HDB should have built more rental flats much earlier, so that Singaporeans do not have to be so angry now over this issue of HDB flats being rented out to foreigners.
The HDB says:
“Mr Leong also alleged that foreign workers do not have to wait when they rent a flat, but Singapore citizens do. This is also misleading and untrue. The facts cited by Mr Leong are no different from flats available for open market rental.”
If what the HDB says is true, it should tell us where and how a Singaporean can rent a flat for $140.
The fact is indisputable that these foreign workers get a flat to stay upon their arrival in Singapore, whereas thousands of Singaporeans are waiting to rent HDB flats.
The HDB then asserts:
“Any person, Singapore citizen or otherwise, can also rent similar flats from the open market without waiting.”
Can the HDB please give us a listing of such “similar flats” in the open market which are being rented out for $140?
Instead of saying that “Mr Leong’s friend can contact HDB for advice on housing options if he is truly in financial difficulties”, may I suggest that the HDB go and ask the homeless who are currently staying at places such as the parks in Singapore?
http://theonlinecitizen.com/2010/01/hdbs-reply-on-flats-for-foreigners-a-conflict-of-interest/
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Originally posted by Great1:
Mah Bow Tan’s claims that HDB flat values will always go up
Soon, we will have housing loan plan which will stretch to 50 years, and your next generation will be liable to continue paying after you die. -
Originally posted by ztreyier:
Time to vote out Mah then.
Bye bye mah bow tan.
This year will be your last year drawing highest pay in the world and talking rubbish to people.
bye bye.
On a last note since you are leaving mah bow tan.
What hapened to GOAL 2010?
This year is 2010 and Singapore is not in world cup!
You failed.
goodbye.
no leh, i thot we played in world cup qualifying round mah,....how can you said he failed??? -
Yes, it is still affordable to all, except a few who complain here only. And that is peanut to Mr Mah.
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Sure affordable!
Take longer loan lah.
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or work harder and longer hours, take up a few jobs to service your loan, still affordable mah
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We are Singaporeans, race should not matter?
Friday, 8 January 2010,
Leong Sze Hian
From 2 January, the race of new born children has to be indicated on the birth certificate.Parents who are of different races, can choose either the race of the father or mother for their children.
Before the child turns 15 and gets his identity card, the race can be changed with the consent of both parents.
So, what are the implications of this policy change?
Every year or two, Members of Parliament would bring up the issue of their residents who are affected by the HDB Ethnic Quota policy.
When the ethnic quota is reached in a HDB block, the ethnic group members who are affected may encounter difficulty in selling their flats, or see their flats’ resale price some 10-plus to 20-plus per cent lower than their neighbours’.
Imagine you buy a flat at the same price as your neighbour, but when you try to sell the flat years later, the price of your flat may be much less.
For example, if the market valuation of a flat is say $400,000, a flat-owner who may be affected by the Ethnic Quota, may only be able to sell for say $320,000, a difference of $80,000.
In the years to come, and if HDB prices continue to increase, the differential due to the Ethnic Quota may be in the hundreds of thousands in the future.
The probability of being affected by the Ethnic Quota may not be very high, as I understand that only about 25 per cent of HDB flats have exceeded the quota.
You can enter the block number and street name, in the HDB’s web site to check whether the Ethnic Quota has been reached.
I asked a friend who works in a Family Service Centre (FSC), and she told me that there were only about five Ethnic Quota households who could not service their HDB loans last year, in that particular constituency.
There are 36 FSCs in Singapore.
In this connection, I understand that the only exception to the Ethnic Quota rule which is applied to both HDB flat sales and rental, are the HDB blocks that are entirely rented out to foreign workers.
The monthly contribution deducted from workers’ salaries to help fund the various self-help groups like the Chinese Development Assistance Council (CDAC), Eurasian Association, Mendaki and SINDA, range from $0.50¢ to $1, $1 to $7, $2 to $10, and $2 to $16, depending one one’s salary.
One can choose to contribute a different amount or opt-out.
The tuition and financial assistance schemes vary amongst the different self-help groups.
The tertiary education financial assistance offered subject to means-testing, may also be different for an ethnic group.
Race is fundamentally about one’s heritage, ancestry, culture and future generations.
Should parents and children have to consider the merits or demerits of “benefits” in their “race”?
Will there come a time in the near future, when some people may for all practical purposes say that they belong to one race, only to identify with another with their identity card when they apply for a HDB flat?
After all we are all Singaporeans – should race matter at all?
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Picture from Greenridge Primary School.
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Breakdown of the monthly contribution rates to the self-help groups:
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truly multi racial society.
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A TWO-ROOM Housing Board flat at Jalan Kukoh, off Chin Swee Road, was sold for $245,000 two months ago.
For Singaporeans who can't even afford a two-room flat, HDB can advise them to buy a large family camping tent as a home and camp outside Parliament House.