Let us ask ourselves which agency has the authority over the sale of HDB flats. Is it the SLA or the HDB? The SLA stands for the Singapore Land Authority while the HDB stands for the Housing Development Board. Any buyer of HDB flats has the right to buy resale flats, EC units, original flats, and DBSS flats from any developer two times only.
HDB is Singapore’s public housing authority. The approval for land ownership under the Residential Property Act is being taken cared of by the SLA. All interested buyers for HDB properties are required to directly inquire and coordinate with the HDB agency. The SLA manages the land sale system for the public except the HDB units. However, the SLA makes sure that the sales of lands including HDB are being conducted in a transparent manner and in most competitive public tenders.
An increase in the prices of DBSS will pave way for the BTO to increase their prices also. This would potentially create future expensive HDB flats. The implication would be forming a certain kind of minimum pricing for the land that would serve as the basis for prices of other types of housing units. The only factor that we can see causing a disruption to the pricing is the wrong interpretation of the supply and demand situation. Had there been correct interpretation without commercial implications, the pricing would be fully considering the cases of the local consumers alone.
Often, the newly weds became the victims of mistaken interpretation and wrong solution or approaches of the government about HDB housing income ceilings because it greatly affects their eligibility to become eligible buyers of the HDB flats. If you are newly weds trying to create better life together, there could be difficulties in meeting the total income ceiling requirement. If the aim of the government is to provide access to better and affordable housing loans, the plight of the newly weds must be considered. Where will these couples go?
It was suggested by one of the commercial property buyers that the income ceiling should be compared and reviewed against the current take home pay of the newly weds to be more realistic in its approach. The Prime Minister should take into consideration the real time take home pay. Can the newly weds afford the high income ceiling rate? If they cannot afford it, there could be potential problems that may arise from their inability to meet the income ceiling requirement that the government should look into.
The idea of controlling people and telling them to marry late is never a good idea. It would be difficult to tell couples when to marry. Controlling other people do not usually, work because it carries negative perceptions and most of them will not accept or follow. The demand for housing will always rise when population increases. Besides, there is always the foreigners and permanent residences migration pattern to study.
Higher income ceiling does not solve the problem but creates other problems. If we are to look at the total income of the couples or singles per month, then we can tell that it is not advisable to raise the income ceiling. The high cost of living in Singapore is another factor to consider. Can the Prime Minister do something to regulate the cost of goods sold in the local market or groceries?
Most people wait for about 2 to 3 years to be able to purchase a BTO flat. The prices will greatly affect their budgets. How do we solve this problem? One suggestion is to raise the income ceiling by category. Of course, the foreigners and Permanent Residence individuals need to pay more than the locals. For example, if the income ceiling of the Singaporeans will be $12,000 then the foreigners and PR’s would then be $15,000 on resale HDB. At present, there is no income ceiling for resale HDB.
This will create a diversion tactic for PR’s to consider purchasing private properties and the Singaporeans to be prioritized for HDB resale flats sale. This is a great technique to give time for PR’s and foreigners to think about buying private properties, which will decrease the demand for the HDB flats considerably. What is the goal of the Singaporean government? This matter needs a review of their priorities.
As far as the overall situation is concern, I would say that the increase for the new HDB flats is not appropriate. The population that will suffer is most likely the locals from the domino effect of the price increases. The idea will close the gap between the prices of the HDB flats and the current resale HDB flats. The best way is to facilitate the completion of the construction of the HDB flats and not raising the income ceiling.
The price schemes should be focused on the locals especially the newly weds or even the singles. The DBSS private developers and other property buyers should be the last priority. The best approach is to survey the income structure of the consumers for the HDB flats and see if they are able to cope up with the income ceiling.
One may think of imposing more restrictions on the paper requirements. Increasing the pricing will result to more complications than good outcomes. It is the responsibility of the government to manage the health of the locals, one method of which is to provide better access to affordable housing programs such as the HDB. Closing the gap between the resale and new HDB prices will result to an orderly market where the locals will be prioritized for the HDB flats and the Permanent Residents or foreigners will be offered the private property.
The economic goals of the sale for the HDB land might have been the main reason for the disruption of supply concerning HDB flats from 2006 to 2010. This should be a good model on ways identifying consumers for specific categories of real estate properties, regulating pricing, and balancing supply with demand.
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