Monday 2 August 2021

Suggestion to HDB

The HDB flat is the epitome of Singapore's success as a nation. It grew out of necessity after gaining independence and has not looked back with beautiful and functional flats spread across the island, some even winning awards! But within the nuances of policy lie a list of issues facing this generation. Among these, some 99 year leases are due soon, the wealth distribution effect is uneven, long queues are forming at BTO etc.

The mission of HDB is to provide affordable flats for the masses and that's been widely achieved. The crux of the matter here is what's meant by "affordable"? I think if the policymakers can resolve this, then subsequent issues will naturally have their solutions. At the moment, one of the condition for buying a new flat is the income threshold. That itself caps the limit on how much loan a couple can afford which in turn sets the upper ceiling of how much a flat should be priced. I would suggest tweaking the income eligibility by referencing the household median income as well. Lower the income threshold if need be. In that way, new flat prices would not be too expensive and remain accessible to majority of citizens. Regardless of asset value enhancing factors, new flats should use that as the benchmark. Another consideration would be to do away with showcase projects such as Pinnacle at Duxton to ensure no flat would become overly priced.

What about those people who are caught with higher income but yet unable to own a private property? My opinion is to scrap the Executive Condominium scheme and instead allow them to buy a HDB flat as priced above. The catch is, more stringent conditions would have to be imposed such as gains tax, cap on CPF usage and/or longer minimum occupancy period etc. Resale flat buyers should also be subjected to similar requirements.

Therefore, land with higher value should be allocated to the private sector that in turn will cater to the high income earners at prevailing market conditions. This create opportunities for real estate companies to find innovative ways to attract buyers while helping the government to pocket more due to higher land price. HDB can focus to build affordable flats within a certain price range that can address new entrant concerns while ensuring no one makes a profit disproportionately when it's sold. The aim is to allow a HDB flat to be purchased or recycled within a price range while allowing private housings to be based on market forces.

Tip: Balvenie 12 Doublewood, fine and smooth oak

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