RONALD LEE: Many Singaporeans have been belabouring the high cost of HDB flats, whether resale or BTO flats, for some time now and the recent Public Housing Debate in parliament has further stoked their anger.
While the government has committed to keeping public housing “affordable”, many have been scratching their heads to as why higher subsidies were given to first-time buyers in Budget 2023, as such subsidies have generally resulted in a trend of price increases.
Interestingly, at a 2010 International Housing Conference, Prime Minister Lee Hsien Loong said:
“The HDB flat is not just a shelter but also a key investment asset…over the long term, the value of HDB flats depends on the strength of the Singapore economy. Provided Singapore continues to do well, our flats will maintain their value, and Singaporeans can enjoy an appreciating asset.”
In 2011, then-National Development Minister Mah Bow Tan said in a statement:
“We’re proud of the asset enhancement policy. It has given almost all Singaporeans a home of their own… that grows in value over time.”
Lee’s father, former prime minister the late Lee Kuan Yew said this at the launch of the Tanjong Pagar Masterplan in 2013:
“As Singapore prospers, the value of their HDB homes also appreciate. Home ownership motivates Singaporeans to work hard and to aspire for a better future for their family, to upgrade to better and bigger flats.”
The late Lee is also now infamous for saying that “the value of your flat will only go up, it will never fall.”
The problem with the PAP government’s bold proclamations is that HDB flats, which are sold on a 99-year lease, tend to lose their value around the 60-year mark.
This is due to the remaining lease left, and obstacles faced when using one’s CPF and taking a loan to pay for an older flat.
Somehow, the bubble burst in 2017 when Lawrence Wong, who was National Development Minister at that time, warned that no one should be under the illusion that the value of an HDB flat will increase “ad infinitum”.
That’s when Singaporeans really started to panic – especially those who were feeling the effects of declining prices fetched on their older flats.
The Voluntary En-Bloc Redevelopment Scheme (VERS) was announced in 2018, in which the government said it was committed to buying back the remaining leases on old flats which have about 30 years of lease remaining if owners choose to sell.
However, up to today, there have been scant details given by the MND as to the compensation for VERS, and whether it will apply to all HDB flats.
To the point where even MND Senior Minister of State Sim Ann said this one-liner in parliament when questioned as to whether all eligible HDB flat owners will be offered VERS:
“I am glad of your interest in VERS. Please stay tuned.”
So is it in the PAP’s interest to keep public housing prices high because of the many promises of asset appreciation over the years?
Because in doing so, it would put a great strain on taxpayers who would have to foot the bill for higher and higher subsidies to buyers, and paying for VERS when the time comes.