Source : Today - 11 Feb 2009
I REFER to the report “No-frills housing, please” (Feb 9).
MP Lim Wee Kiak is right to note that 3- and 4-room flats cost only $15,000 and $20,000, respectively, in the ’70s. In fact, even 5-room flats cost only $27,500 to $35,500 then. How did they all come to cost 10 to 30 times more in a matter of 30 years? Have construction costs and salaries gone up that much?
Not only have prices gone up, the sizes of the flats have shrunk. We’re getting smaller flats for higher prices.
One possible explanation for the higher prices: HDB is now taking the market value (and not just the cost) of the land together with construction and infrastructure costs to determine the prices.
HDB has also farmed out the responsibility of building flats to private contractors under the Design, Build and Sell Scheme (DBSS) where the land is tendered out at market price. Would such contractors sell the flats without making a profit? This could explain the $600,000 to $700,000 prices for flats under this scheme.
Meanwhile, for some 20 years or more, no more 2- and 3-room flats were built, forcing people to buy the more expensive 4-room, 5-room and executive flats and opt for 30-year loans.
Cheong Chee Mun
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