‘Be careful what you wish for’: Lively debate on keeping public housing affordable and accessible

She urged the Government to take a calculated risk and build in advance, rather than just build to order.

Mr Sitoh Yih Pin (Potong Pasir), however, urged caution.

He cited a period after the 1997 financial crisis when there was a surplus of Housing Board flats, resulting in walk-in selections where people could walk in and purchase flats at a lower price than those who had queued and paid for them.

Omitting land cost in BTO prices unwise

Mr Vikram Nair (Sembawang GRC) said Mr Leong’s suggestion to have BTO flat owners pay the land cost when they sell their flats would create severe market distortions.

“Under Mr Leong’s proposal, the upshot is that for everyone who chooses to sell their flats, they will now be required to pay land costs – something they were not previously required to – which will be a huge lump sum payment at the time of sale,” said Mr Nair.

This would cause more people to end up paying more for their flat at the time when they sell than they currently do when first purchasing the unit from the HDB, he said.

Ms Phua asked how Mr Leong’s suggestion to exclude land cost from BTO prices would be financed, and what impact the move would have on other national spending priorities such as healthcare and education.

By not considering land cost in BTO flat prices, Mr Leong is “proposing a very big valentine gift of a double subsidy to every Singaporean who’s interested to buy, and I wonder how this will be financed and traded off against other national needs”, she said.

Mr Sitoh said Mr Leong’s proposal would send property prices downwards.

“Be careful what you wish for,” he said, adding that lowering BTO flat prices drastically could impact the resale market and cause property values to nosedive.

Retirement adequacy

Associate Professor Jamus Lim (Sengkang GRC) said most HDB home owners use their Central Provident Fund (CPF) savings to finance their mortgage, which conflates two competing ideals – growing retirement savings as much as possible to ensure retirement adequacy, and keeping public housing as affordable as possible. Tying these objectives that run counter to each other together requires grants to align them, he added.

Escalating home prices in turn require the Government to keep enhancing the grants it gives out, which allows prices to run away even further, in a never-ending, self-reinforcing cycle, Prof Lim said.

“If one is able to offload one’s flat before its price collapses – as it must, eventually – then we can retire comfortably.

“But then, the one holding the bag is a fellow Singaporean, someone who bought your resale because they needed the space for a growing family, and couldn’t afford to wait for a BTO,” he added. 

Addressing such concerns, Mr Murali Pillai (Bukit Batok) highlighted that people can use only their Ordinary Account in their CPF to fund housing instalments.

“The Special Account is preserved, the Retirement Account is preserved,” he said.

Mr Murali added that while Singaporeans may pay through their CPF to own a flat, they can recoup this amount if they sell their home, which may go towards funding their retirement needs.


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