As the PAP starts with their propaganda campaign on how they care for their citizens, I have decided to write a series on how their policies have screwed our lives. My first piece will be on a hot-button issue: housing.
The current situation?
The issue is one which has divided our nation. Those who have yet to get their own homes find the costs too high and are very unhappy at the government: 9 in 15 youths nowadays are worried that they are unable to afford their own homes and cars. At the other end, those who have seen their property values rise are unhappy about the cooling measures.
While there have been measures to curb property speculation, these measures have resulted in hot money flowing into commercial properties instead, causing business costs to rise which the end-consumer pays for in the form of inflation. In other words, the PAP’s incompetence has affected ALL our lives.
How did it come about?
By letting too many foreigners and building not enough units to house these foreigners, the end results is a disaster which results in a housing market with bubble-like prices. In 2008, the PAP government let in 145,000 foreigners while building only 3050 units of HDB flats. This phenomenon has been continued for 5 years, resulting in housing prices doubling.
Assuming that 4 foreigners need a unit of housing (whether they come in as a family or rent a room), we are looking at a shortfall of more than 30,000 units. The corresponding result is a 10-12% increase in the resale index not including Cash-over-valuations.
Who is affected?
Those who are adversely affected are primarily young couples. As they are unable to ballot for a BTO, they are then forced to get a resale flat at grossly inflated prices. This causes 2 negative effects: first, their cash flows are reduced from high mortgage installments. Worse, they could face negative equity should they sell within the medium-term (for example, buying in 2011 and selling in 2016).
In addition, as the rich are more likely to have one property as investment, they benefit from capital appreciation leading in a wealth divide.
Why the PAP’s remedy is not working?
KBW once said that he would ideally like the price of a new HDB flat to be pegged to 4 years’ salary of an average person. As he later mentioned, this was faced with resistance with people from the ground who are afraid of these changes. As a result, the government has decided to increase subsidies instead to make houses less expensive.
This poses 2 problems: Firstly, where does the money come from and can it last indefinitely? Secondly, as these grants are means-tested, how about those who cannot otherwise afford BTOs but are unable to quality for grants?
Better alternatives by other parties?
The honourable Chiam See Tong once asked about this in parliament, only to be replied that this should not be a cause for concern because there are surplus stocks. The SDP has also proposed that HDB flats be sold at a fixed price in a dual-property system for the poor (where a 4-room flat costs $160,000) that can only be sold back to the HDB. This model is superior and remains true to what HDB is supposed to be: public housing.
Concluding remarks?
This is but one of the areas in which the PAP has failed us. To make matters worse, they have continued to be excessively arrogant and stubborn to change. As Singapore moves progressively towards being a democracy, we should vote more and more opposition in to the point where a coalition government would allow greater debate for more sustainable ideas for the betterment of Singapore.
Joseph Kheng-Liang Tan
*The author is a 21 year-old polytechnic graduate who is currently pursuing his law degree in Australia. Widely quoted for his views, he has contributed extensively in his personal capacity to top socio-political sites such as TRS and TRE. He is also supremely homophobic and would rather vote for the PAP should the opposition send in a homosexual representative.