Originally Posted by
propertyguru
I am somewhat ambivalent on this issue, but I should point out that HDB flats are not for sale to foreigners; they are entirely the domain of Singapore citizens. In that regard, it's not subject so much to global forces, just local ones. The HDB's original masterplan was to help all Singaporeans own the roofs over their heads, and I must applaud them for being very successful in the initial years. However, in recent years, it is a fact that many Singaporeans can no longer afford the flats, or it takes too long for them to actually become "owners" of their flats. In many cases, young couples are taking out 30-year loans to pay for their flats.
The comment earlier about housing prices versus food prices is inaccurate as well. Food prices have gone up because of inflation yes. Ingredients are more expensive, rent is higher, utilities too, so the prices of your cup of kopi and your bowl of fishball noodles must therefore rise to allow the hawkers to continue making a living. However, the cost of building HDB flats have not gone up in a manner such as to justify the rise in flat prices. HDB itself has moved away from its policy of pricing flats at a margin above cost, but instead, adopting a market price based on evaluation of apartment prices in the vicinity of the new flats. Such a pricing method is artificial because HDB doesn't have to pay market prices for its land, unlike private developers. The result is that HDB extracts a sizable profit from its developments; it enjoys cheap costs and also high prices engineered by private market forces. It has the best of both worlds in other words.
I am not saying that is wrong in itself. Should the government go further to subsidise public housing so that more Singaporeans can afford their own homes (and bigger ones)? Or what? But what is a fact is that in either event, HDB prices currently are artificially high, and to point to private housing prices as a catalyst is disingenuous, because it is a conscious choice on the part of HDB to peg their prices accordingly. This is a question of public policy, not market forces.