‘The issue here is cash over valuation.’
MR JASON ZHENG: ‘As a young couple, my fiancee and I cannot compete against buyers with access to cash, which is what most sellers ask for now. I have failed in my attempts at half-yearly sales, so the only option is resale flats. The issue here is cash over valuation (COV). The HDB discourages it because of financial prudence, and refuses loans to cover it. Yet most sellers demand substantial COV. Given the situation, why not ban COV? Alternatively, let HDB loans cover COV.’
Undersupply
‘Should the HDB build 19,000 flats a year instead?’
MR STEVEN YEO: ‘How did the HDB determine that building 8,000 new flats a year is sufficient to meet demand? There are seven applicants for each new flat. For example, there were about 24,000 marriages last year, which means only one-third of newlyweds will get a new flat. The other 16,000 must buy resale or private property. If 80 per cent of the population qualify for subsidised flats, should the HDB build 19,000 flats a year instead?’
Three-room flat
‘What percentage of income will a single Singaporean earning $2,500 a month pay?’
MR LOO FOOK KAY: ‘The HDB said a household with a monthly income of $10,000 uses only 15 per cent to service the loan on a $364,000 HDB flat. As the cheapest three-room flat costs about $200,000, what percentage of income will a single Singaporean earning $2,500 a month pay to service his loan?’
Missing factors
‘Home affordability fails to factor in opportunity costs.’
MR HOON TZE MING: ‘Home affordability, when computed based on a cost-to-income ratio, fails to factor in opportunity costs associated with access to employment, quality of public schools and environmental conditions. For example, a flat in Woodlands may be ‘affordable’ according to traditional calculation, but opportunity costs like transport cost and travel time are not factored in. The HDB might consider adopting the Massachusetts Institute of Technology Centre for Real Estate’s Housing Affordability Index, which takes these factors into account.’
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