Source : Sunday Times - 15 Mar 2009
I am writing in response to the current pricing of newly launched Housing Board flats.
The HDB has always maintained its policy of pegging the prices of its new flats to the prevailing market prices, and then subsidising these flats so that they are slightly below the market rates.
However, with the prevailing financial crisis and the anticipation that prices in the property sector will fall further, the prices of recently launched build-to-order (BTO) flats by the HDB are still too high.
Although new flats are normally markedly cheaper than resale ones, now some resale flats cost about the same as new flats (’Punggol resale flats close the price gap’, March6).
The implication is that new flats are overpriced and this reflects the HDB’s near-sightedness in not considering the future slide in property prices.
Especially for BTO projects, which take three to four years to complete, the successful bidders are paying for the flats at the current inflated prices and not the expected deflated prices in three to four years’ time.
It would be fairer if the flats were priced by taking into account the average pay increase/decrease for the last three years and projected increase/decrease for the next three years for the bottom 60per cent of Singaporean income earners, as well as the price trends in the private property sector.
We must not forget that the HDB serves mainly low- to middle-income Singaporeans, and should therefore keep pace with their spending power.
Donny Teo
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