We have already lowered our housing expectations, Mr Minister

The current housing situation is not a result of Singaporeans having unrealistic aspirations, but a shortage of flats due to poor planning in accommodating the surge in population in recent years. In fact, compared to previous generations of Singaporeans with similar education and income levels, many young couples have already drastically lowered their housing expectations.

I wrote a letter to TODAY newspaper in response to a commentary by National Development Minister Mah Bow Tan last Saturday. An edited version of the letter was published on Thursday (21 October 2010) on TODAY Online under the title, What do newlyweds want in a flat? Below is the original letter which I submitted. The sentences in bold were left out by the paper.


I refer to the commentary by Mr Mah Bow Tan (“Buying a flat? Choose wisely”, TODAY, October 15).

His quip about how some Singaporean men propose to their future spouses with the offer of an HDB flat application aptly reflects the strong desire among couples to own a home of their own once they get married. It is therefore regrettable that in the past few years, public housing prices—and hence these dreams—have soared out of reach from so many young couples.

Mr Mah contended that with growing affluence and education levels, Singaporeans no longer want only basic housing. He defines basic housing as simple and functional one- to three-room flats, as opposed to larger four-room, five-room and Executive flats. Mr Mah also distinguished between standard flats and premium flats—the latter referring to flats with better designs, better finishes and in better locations, like the Pinnacle@Duxton and Waterway Terraces at Punggol.

Although Mr Mah stated that that premium flats form only a fraction of the new flats offered, I question why there is a need for HDB to build premium flats in the first place. Why is it so important for a public housing agency to “set new benchmarks for waterfront living for public housing”, or to built flats in prime downtown locations? How does this achieve the purpose of providing affordable housing for the masses?

While Mr Mah is right that Singaporeans’ expectations have changed, they have not changed so drastically that they are now expecting condo-style living for their HDB flats. This is evidenced by the fact that every launch of new developments by HDB in the past year has seen massive oversubscriptions, even for those offering only standard flats. In addition, resale flat buyers are paying huge cash-over-valuation (COV) premiums for even old, basic flats in mature estates like Queenstown.

The current situation is not a result of Singaporeans having unrealistic aspirations, but a shortage of flats due to poor planning in accommodating the surge in population in recent years. In fact, compared to previous generations of Singaporeans with similar education and income levels, many young couples have already drastically lowered their housing expectations.

HDB should focus on building more basic, functional flats and sell them at truly subsidised prices, in order to meet the urgent housing demands of many young couples. As a taxpayer-funded agency, HDB should not be trying to set design benchmarks—or worse, boost their profits like private developers do.

Gerald Giam

Author: Gerald Giam

Gerald Giam is the Member of Parliament for Aljunied GRC. He is a member of the Workers' Party of Singapore. The opinions expressed on this page are his alone.

13 thoughts on “We have already lowered our housing expectations, Mr Minister”

  1. I fully agree with you, Gerald. Mah Bow Tan was caught off guard, did not have discussions with his cabinet colleagues about the changing demographics and migrant influx, and failed to properly plan ahead to ensure sufficient demand.

    The ‘best brains’ in the country could not even communicate with each other. Now the PM is covering his failure to properly lead and manage his cabient team by announcing the building of 22 thousand new flats.

    My fellow Singaporeans, if this is the result of the Government utilising ‘all available political talent’, the country is sunk for sure.

  2. Locals driving up home sales (?) OR One in Four home sales is a non-Singaporean

    “Most of the private home buyers in Singapore are still made up of local Singaporeans, with permanent residents (PRs) comprising 13 percent and foreigners 12 percent of total sales in the second quarter.” … Straits Times reporting on Mah Bow Tan revealing the figures in Parliament after several MPs asked if foreigners and PRs were driving up property prices in Singapore. This is half a truth.

    PR 13% + Foreigners 12% = 25% !!!

    Out of 4 home sales, ONE is non-Singaporean! And this is a far cry from previous statistics on property transaction over the past 10 years. Straits Times and Mah should show trend analysis of Foreigners’ transactions over the years, and PR transactions over the years for a more complete analysis. Every incremental transaction by non-Singaporean drive up demand — this is standard economics of supply and demand. If there are less 25% transactions, the prices will drop naturally.

    Suppose in 2 years’ time, PR percentage went up to 23%, and Foreigners percentage went up to 22%, using the archaic reporting approach, the Straits Times and Mah could still conveniently play with statistics and argue that Singaporeans (55%) is driving up home sales.

    I understand this is an election year, but please state the facts from the viewpoint of Singaporeans and non-Singaporeans. The fact is, what we are experiencing in reality, that our property market has gone sky high, and now most Singaporeans (exclude the rich ones) are finding it impossible to own private properties. Imagine more than SGD 1 million for 3 bedroom condo at non-prime areas!!! Compare this with property prices just 5 years ago.

  3. Yes. What’s done is done. The important thing now is that the Minister puts in place a plan to ensure that there is sufficient supply over the forward estimates to 2015, especially if the government expects to continue bringing 100K foreigners into the country.

    A good percentage of these foreigners will be highly skills, eventually become PRs, may bring their families over and could add to local Singaporean demand. So, looking at the supply of new HDB flats to be built on the yearly basis will so give Singaporeans an indication on overall demand, considering that the Minister appears to favour a ‘Just-in-time’ aproach to supply of HDB flats.

  4. @Daniel Lee

    I’m not too sure that “a good percentage of these foreigners” will be highly skilled. From what had happened in the past few years, it appears that the govt had just let in foreigners just for the numbers’ sake. It was a very short-sighted policy, of which our society is still paying a price for. I’m afraid that PAP govt is guilty of gross mismanagement this time.

  5. We are personally facing this problem. My husband is 33 and I am 28 and we are told to wait for 5 years for our BTO to be ready. We want to start a family but why are we being punished this way. We can’t afford the high COV of resale flats and we are trapped by their incompetence. Please contest more so that we could vote against their misactions and slow response.

  6. @Singaporean – Labour inputs are the best way to grow the GDP, which appears to be the PAP’s overriding concern. Not surprising, since their bonuses are linked to Singapore’s GDP growth.

    @Facing this problem – BTO scheme is the best way to reduce HDB’s risk (of oversupply). Once again, the interests of Singaporeans are secondary.

  7. Hi Gerald,

    Firstly, thank you for responding to the commentary by Mah. It is important to be critical and question this series of, imo, PR articles by MND/HDB, so that the real important issues are not obscured by PR bs and/or feigned ignorance. I remember reading this article “Buying a flat? Choose wisely” and was utterly unimpressed by its non-relevance. Mah is basically saying: Singaporeans aspire to better housing and, look at Punggol Waterway & Duxton, HDB is providing a wider range of flats than before … and please choose wisely. Given the dire public housing situation first time house buyers are facing, I think it is reasonable to expect Mah to at least comment on the situation. But of course, that did not happen in this article.

    Providing a wide range of flats (range) and providing enough flats (supply) are separate issues. It is important for politicians such as yourself to repeatedly focus on the right issues and to propagate your voice to a wider group of people. Keep it up and once again, thank you!

  8. @another Thanks for your comment. My article actually *was* in response to “Buying a flat? Choose wisely”.

    If you like what I wrote, perhaps you could share it with your friends via email or on Facebook (if you’re on it), so you can help them understand the issues better. Thanks for your support!

    I was *shocked* to read this. In the “Types of Passes” table on this page, it reads “Employment Pass – for those in Professional, Managerial, Executive or specialist (i.e. Technicians) jobs”.
    No wonder our PMETs so stressed, traffic MRT stretched, housing rental/purchase demand sky-high prices, …

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