Dr Ng: Housing problem has been decisively tackled

[Baal]

http://www.tremeritus.com/2014/03/15/dr-ng-housing-problem-has-been-decisively-tackled/

 

 

Dr Ng: Housing problem has been decisively tackled

 

March 15th, 2014 | Author: Editorial

Minister Ng Eng Hen

 

Wrapping up the nine-day debate on the Budget and Committee of Supply (COS) this week, the Leader of the House Ng Eng Hen compared this year’s debate to the one held in 2011.

He said the difference in the issues raised showed there has been significant improvement in some areas:

 

 

MPs were also pleased that the housing problem has been decisively tackled. The results speak for themselves – shorter waiting times, lower costs and greater affordability of housing pushed MND off the hot seat, to the relief of Mr Khaw’s eyebags.

All in all, this year’s Budget and COS reflect a House holding true to the course which the President set when Parliament began in 2011 – ‘to build on our strong foundation together, to give all Singaporeans a better life and brighter tomorrow’.

 

 

Has the housing affordability issue been decisively tackled? Let us see. It is a good thing that Singaporeans have the internet these days.

In Parliament last March [Link], Housing Minister Khaw Boon Wan said more will be done to reduce BTO flat prices relative to income, and to reduce the financial burden of housing on the young:

 

 

We have stopped BTO prices from rising by delinking them from resale prices. We can now pause and see what else we can do to bring BTO prices in non-mature estates to, say, around

4 years of (annual) salary

as it was before the current property cycle started.

One thing is clear. We are committed to restoring and maintaining the affordability of new HDB flats to the vast majority of first-timer Singaporean households. Their Singapore Dream of owning their own flats, like their parents’, is safe. We will make sure of that.

 

 

Notice that Mr Khaw used the term “restore the affordability of new HDB flats” and notice that he also avoids talking about resale flat prices and prefers to focus on new BTO HDB flats.

In an interview with the Straits Times last April [Link], DPM Tharman said:

 

 

Over the longer term, I do think that we will be better off with housing prices being a smaller multiple of incomes for the average person especially.

For the low income group, we’ve got very substantial grants and subsidies. But for the average family, average young family, including those who are in the upper middle income group, and those who go for private condos included, we’ll be better off as a society and as an economy in having a more steady growth of property prices and the multiple of property prices to incomes being somewhat lower.

It’s important for us to keep prices in check so that younger families feel that housing is affordable and don’t have to put so much of their disposable income into servicing their loans. I think that’s the right long-term objective.

 

 

Let us look at a recent BTO launch in January 2014 to see if Mr Khaw has fulfilled his promise. Remember, he said he wants to bring BTO prices in non-mature estates to around 4 years of annual salary, as it was in the past before.

Punggol BTO Jan 2014 [Link]:

 

 

 

 

Typical 3-room:

• Nett selling price less grants = $165,000
• Applicants’ median monthly household income = $2,800
• Price to annual household income = 4.9

 

Typical 4-room:

• Nett selling price less grants = $300,000
• Applicants’ median monthly household income = $4,400
• Price to annual household income = 5.7

 

Typical 5-room:

• Nett selling price less grants = $430,000
• Applicants’ median monthly household income = $6,000
• Price to annual household income = 6.0

 

 

Obviously, Mr Khaw has yet to fulfill his promise to bring down BTO prices in non-mature estates to around 4 years of annual salary.

In fact, if he wants to fulfill his promise, he should be selling the new BTO flats in Punggol now for about:

• Typical 3-room: 4 x $2,800 x 12 = $134,400 (19% discount from current $165,000)
• Typical 4-room: 4 x $4,400 x 12 = $211,200 (30% discount from current $300,000)
• Typical 5-room: 4 x $6,000 x 12 = $288,000 (33% discount from current $430,000)

 

 

 

 

[Xefera]

the discounted prices are probably similar to the prices when HDB first launched the flats in Jurong West area about 6 years ago?

[Toothiewabbit]

My SIL just got a BTO 5rm (10th floor) for 460k. Is this the new "delinked" price the minister is talking about?

[Astrid]

Very well and good - AFFORDABLE public housing for all who can qualify.

No grounds for whining and crying anymore.

 

Why issit everybody must buy condo ... in spite of many on 99-yr leases and OCR.

Think 60+ years left ... and then what?

[Alheych]

expectation management goes a long way in "tackling" the housing problem. before 2011, many people could not see the light at the end of the tunnel, they didn't know when they would ever get a house.

 

when khaw boon wan took over, he swiftly moved many of these people onto the "waiting list", and these people can now see the hope. the actual number of flats hasn't increased yet, but people are already being appeased.

 

does this take skill? of course, this is politics. but if people like mah bow tan can't even manage people's expectations, it's no wonder why he had to go.

[Tiger1]

Maybe yes BUT that creator of this mess IS still around! He shd also be decisively removed from the parliment as well. Cannot meh?

[Watwheels]

Sir, yes sir! Whatever you say lor.

[Blackyv]

Maybe yes BUT that creator of this mess IS still around! He shd also be decisively removed from the parliment as well. Cannot meh?

How can you ask miw remove their blue eye boy?... Very inhumane you know...

My SIL just got a BTO 5rm (10th floor) for 460k. Is this the new "delinked" price the minister is talking about?

Their answer will be if it's not, be prepared to pay 550k for the same unit.... hehehe...

[Celicar]

Cannot. Because Year of the Mah. So you Bao Tan gugu for wish to come true.

Maybe yes BUT that creator of this mess IS still around! He shd also be decisively removed from the parliment as well. Cannot meh?

 

[Optramagnum]

Actually our MND is very efficient and kind to citizens already. If you have a job, chances you can own a flat. You compare our region countries like China and Hong Kong? The parents must take mortgage loan so that their children can buy flats for themselves. This debt is pass down from generation to generations.

[Tigerwoods]

solving a problem messed up by others I give 5 Praises.

 

Solving a problem messed up by Kakilang ...

I give nothing.

[Wt_know]

MND was doing a great job > everyone should have a roof until the "asset enhancement" idea got overhyped > no $1M no talk

 

Actually our MND is very efficient and kind to citizens already. If you have a job, chances you can own a flat. You compare our region countries like China and Hong Kong? The parents must take mortgage loan so that their children can buy flats for themselves. This debt is pass down from generation to generations.

 

Edited March 16, 2014 by Wt_know

[Voodooman]

It is Price over FORWARD annual salary, stupid.

 

Actually 5-6 times still ok lah, EC already 7-8 times, BTO cannot be too cheap, otherwise we are raiding the reserves.

[Albeniz]

Problem has been "decisively tackled".

 

Very tired of hearing all these self-proclaimed successes.

[Alheych]

Problem has been "decisively tackled".

 

Very tired of hearing all these self-proclaimed successes.

 

indeed, this is a self-proclaimed success.

 

but looking at objective factors, it's apparent that even the opposition no longer takes issue with housing during this year's budget debate. instead, the focus has shifted to transport and healthcare. i think there is indeed some basis for claiming success.

 

just hope that they don't let this become cyclical and few years down the road find themselves with not enough flats again.

[Hydrocarbon]

Very well and good - AFFORDABLE public housing for all who can qualify.

No grounds for whining and crying anymore.

 

Why issit everybody must buy condo ... in spite of many on 99-yr leases and OCR.

Think 60+ years left ... and then what?

 

Face lor.. Keeping up with peers / relatives..

 

I rather stay HDB near MRT (Bishan / Toa Payoh / AMK / within Circle Line) than condo in far flung areas (for same price or lesser). Less maintenance too.. Toa Payoh best, want pool go SAFRA, want gym go SAFRA (can see girl some more! Like the ad, haha)

[Astrid]

 

Face lor.. Keeping up with peers / relatives..

 

I rather stay HDB near MRT (Bishan / Toa Payoh / AMK / within Circle Line) than condo in far flung areas (for same price or lesser). Less maintenance too.. Toa Payoh best, want pool go SAFRA, want gym go SAFRA (can see girl some more! Like the ad, haha)

Agree ... Holland Drive / Avenue HDB (old estate) in D10 prime CCR ;-)

[Wt_know]

let me quote "cheap is no good, good is no cheap" ... govt says one

aiya ... even sell bto 4-room at $200k also wont tap into reserve la

the major cost of bto is land cost and land cost is 'perceived' cost ... the land can be priced at $10M $100M or $1B

if the land is priced at $100M and sell to hdb at $50M then lost $50M lor ... but not actual money hor

if every land even ulu ulu at sengkang and punggol is priced at orchard .... hdb/sla/govt lose billions of dollars la

hearsay, jurong is the next orchard liao ... lol

 

It is Price over FORWARD annual salary, stupid.

Actually 5-6 times still ok lah, EC already 7-8 times, BTO cannot be too cheap, otherwise we are raiding the reserves.

 

Edited March 17, 2014 by Wt_know