Pricing Flats According to their Value

Ensure fairness for all buyers and across generations

The prices of HDB flats are always a subject of much public interest. In
my conversations with young couples, a common question I hear is:
“Why are HDB flats so expensive? Prices today seem much higher than
what our parents paid in the 1970s and 1980s!”
I can understand these concerns, especially from those looking to buy
their first homes. Yes, flat prices have increased over the years. But, in this
commentary, I will explain why this has happened and, more importantly,
why rising flat prices, if supported by economic fundamentals, is in the
overall interest of everyone – home owners and home buyers.
Providing a Home and Asset
Home ownership versus rental: Governing is about making choices
and trade-offs. Which policy will bring greater benefit to the people?
What are the implications and costs to taxpayers? In public housing,
governments have to make a fundamental choice between home
ownership and rental models. Most countries have chosen the rental
option. Tenants pay subsidised rents, but own nothing.
Singapore decided early on to promote home ownership. We subsidise
public housing so that each family can own, rather than rent, their home.
The flat becomes a store of value that can appreciate over time as the
country develops. We are the only country in the world that has made
affordable home ownership a major pillar of its public housing policy.
Resale at market versus cost – Unlocking value: Having chosen
home ownership, we must then allow the true value of the flats to be
recognised and realised.
Again, we have a choice. Do we require the flat to be sold back to HDB at
a fixed price, or do we allow it to be sold on the open market? We have
chosen the latter. We let the market determine prices but keep a close
watch to temper excessive exuberance, where necessary.
Today, every HDB flat has an open market value which its owner can
realise, after staying in it for a minimum period. The value of HDB flats
today reflects Singapore’s growth and prosperity since the 1970s.

https://www.mnd.gov.sg/Reflections%2...a%20Nation.pdf