Normally, I do not post other matters, apart from finance and investment. This is my very FIRST time. Hopefully, it will be the LAST. However, after reading the mainstream media today, I can't help but feel surprised about Mr. Mah Bow Tan comments, prior to our GE (General Election) results tomorrow.
Please read below and pardon me if I am voicing this out. I am just a normal goody-two shoes Singapore citizen hoping the best of our nation in regards to affordable public housing.
Today Business Times quoted (Fri May 6) from Mr Mah in relation to the point from NSP that a 30 year mortgage period is too long. Mr Mah said that buyers can choose a shorter payment period if they want to. He further elaborate "look at the car parks. It's full each night....do you see only Suzukis and Hyundais? No. You see Mercedes, you see BMWs. So how is all this possible if our flats are supposed to be unaffordable?
I am appalled by his narrow-based comparison:
Point 1 - in the first place, is he implying that all or at least most of the Singapore car parks have Mercedes and BMWs? Look around carefully Mr Mah or perhaps make a visit to Chinatown. How many premium/mid to high-end cars can you see? Are you totally disconnected to plain folks on the ground or just plain pure observation from the top? I know there are people whom needs a car because of health reasons due to high taxi fees. So they get a simple family car to shuttle around, which perhaps is their priority. Does that mean they can afford to buy a resale or new HDB flat?
Point 2 - There are people whom buy cars to shuttle around and get a loan from the bank for monthly repayment, especially if they have relatives from nearby Malaysia. They may get a BMW due to status quo. If so, will they be in more bad debt for paying off the car loan AND the high mortgage. In this instance, could you imply, from your statement above that these people belong to the higher income bracket and hence our flats are affordable, supposedly on the surface they could afford a BMW? So the question is, what is the basis of the above-mentioned comparison?
Mr. Mah mention, in relation to NSP, that NSP offers cheap shelters where PAP provides good homes. And that is the difference. Mr. Mah quotes an example - a four-room flat in Tampines can fetch more than $400,000 today while a new flat cost less than $100,000 25 years ago. Mr. Mah said, but back then, Tampines had nothing". The government invested in the area over the years and raised the value of flats".
While of course residents in Tampines benefit, in the first instance, I thought public housing is NEVER meant to be an investment? It is by all means to be a shelter over our head, a place for us to call home, a place to relax with your loved ones after a hard day of work and a place to look forward to rest after each passing day. Unfortunately, over the years, while capital appreciation is useful, are we now, citizens of Singapore, being positioned to think that HDB flats are meant for short to mid term investment? Are we being told that HDB focuses more on increasing valuation than a comfortable home? If so, why is the space getting smaller and yet the prices appreciate more? Will that literally spill over and impact the private housing prices around that vicinity and thus, become an attractive investment area for foreigners to buy and sell? How about "flipping" for a quick profit? Guess what? who will suffer at the end of the chain? Questions, questions, questions.
To me, the basic provision of a government dealing with housing is to provide affordable public flats to citizens and not to treat it like an asset. I am not sure about how you feel but certainly the statement above made me ponder - as always and nothing new, the true meaning of a roof over our head than an investment vehicle.
Please do not get me wrong. I am not saying the investment around Tampines should be criticized - while I do applaud the facilities and network being built, it makes me think as a commoner, the objective behind the rising prices of HDB flats.
You decide :)