Saturday, September 26, 2009

'We are creating our own housing bubble.

WEDNESDAY'S editorial, 'Watching HDB price behaviour, sensibly', suggested that the sudden spurt in private property prices since July has boosted HDB values.

That may be true but may not the reverse also be true, that is, that HDB values have also boosted private property prices?

In some HDB estates, the prices of four- and five-room flats have risen by $100,000 or more over the past six years. How

will this not affect property prices in general?

The HDB says its flats are highly subsidised, which I understand to be more a case of discount on commercial prices.

However, as there is no developer of public housing except the HDB, from where are such commercial prices drawn?

The editorial made another excellent point, urging buyers to exercise their democratic right not to pay a premium by considering non-prime townships.

Perhaps the democratic right would be better exercised by demanding that the HDB build more smaller flats so buyers are not saddled with a lifetime of debt.

Buying small and then upgrading to a bigger flat later when you can comfortably afford it should be a safer way for buyers.

At the rate that housing prices are moving, we are creating our own housing bubble.

Coupled with the culture of easy bank loans and credit cards, it makes thinking Singaporeans wonder why the Government is allowing these harmful practices, even as the United States government is trying all ways to dampen such practices.

Chia Hern Keng

Source: Straits Times, 26 Sep 2009

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