Saturday, October 24, 2009

Your Insights

Last week, we asked if private property owners should be allowed to buy resale Housing Board flats, and if the $8,000 household income ceiling to qualify for housing subsidies should be lowered to prevent ‘buying distortions’. More than 30 readers responded. Eight said that private property owners should be banned from buying flats, while another four thought otherwise. Eight readers wanted the $8,000 ceiling raised instead of lowered.

‘The Housing Board should increase the income ceiling for Design, Build and Sell Scheme flats to cater to the ‘Sandwich Class First-Timers’ who can afford them and need a home. Now people buying these flats are first-timers in their early 20s who are paying through their nose.’

Ms Jessy Teoh in an e-mail

‘If private property owners can buy resale HDB flats, lower- and middle-income Singaporeans – especially singles – will find it difficult to do so. Under HDB rules, singles cannot buy new HDB flats, so they are the ones who suffer the most.’

Ms Toh Siew Peng in an e-mail

‘Public housing will be out of reach for future generations of citizens if it is viewed as an investment asset as all investments are expected to appreciate in value. And if we allow permanent residents to purchase public housing, future prices of public housing could become nightmarish.’

Mr Andrew Michael Teo in an e-mail

‘I asked HDB if it was possible to set income rules in a way which allows the sandwich class to buy flats of a minimum amount, so that we do not compete with the majority. But HDB has not acknowledged that it is willing to look into it. It is neglecting a pool of Singaporeans like me. If you have an income lower than $8,000, you have a chance to buy a new flat, and three to five years later sell it to make a profit from the sandwich class!’

Ms Christine Goh in an e-mail

‘It is almost pointless to compare median incomes with monthly instalments based on 30 years as this is arbitrary. To push this ratio down to appear affordable, HDB could lengthen tenures. In countries like Japan, housing is so expensive that payments can be passed from one generation to another.’

Mr Andy Wee in an e-mail

‘The fact remains that flats have become less affordable. Income growth has not been commensurate with that of property value, or the cost of living for that matter. Singaporeans have to bear a bigger loan with longer tenure and more overall interest paid to banks for a roof over their heads. Ironically, this generation has to work longer and be content with smaller flats compared to previous generations and would most probably have to sell their property in order to retire.’

Mr David Ng in an SMS

‘Instead of pricing new flats at a subsidised price, price them at their market rate and provide a grant to first-time buyers so that the process is similar to that of buying a resale flat. This will provide the transparency to facilitate comparison between prices of new and resale flats.’

Mr Chua Teck Chee in an e-mail

‘To help those who need the subsidies most, HDB could introduce a step-down system in which grants are given based on household income. Those at the $8,000 ceiling could be given the lowest subsidy, say $5,000, which will rise to a maximum of $60,000 to $80,000 for the lowest-income owners. This would be similar to the way road tax is calculated – based on the car’s engine capacity.’

Mr Paul Nah in an SMS

‘Private property owners should be allowed to buy HDB flats because it would support HDB resale prices and the value of Singaporeans’ main assets.’

Mr Cheong Chung Hor in an SMS

Source: Straits Times, 24 Oct 2009

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