Mah not giving full picture of costs: Low
By Kor Kian Beng
WORKERS' Party (WP) chief Low Thia Khiang yesterday accused National Development Minister Mah Bow Tan of not giving Singaporeans the full picture on housing costs.
He maintained that his party's proposal to lower new flat prices would have 'minimal impact' on resale prices.
The Hougang MP cited two reasons: The number of new HDB flats is relatively small, and they are subject to a minimum occupancy period of five years before they can be sold on the resale market.
'So, how much can the price of a new flat affect the resale market price, and to the extent that he is saying that it is going to be a big impact? I think he is misleading the public,' said Mr Low, speaking to The Straits Times in an interview.
The opposition leader was responding to Mr Mah's criticisms of the WP's manifesto unveiled last Saturday. It proposes to lower new HDB flat prices by pegging them to the median incomes of Singaporeans. Now, it is tied to resale market prices, and then discounted.
Mr Mah warned the WP's proposal would lower the value of Singapore's one million homes in what he called an 'asset-devaluation policy', as opposed to the People's Action Party's (PAP) asset- enhancement policy.
He explained that the housing markets are interlinked, and so a reduction in new HDB flat prices would have an impact on the resale flat market.
The government subsidy on new flats, he added, already adds up to $1 billion yearly, as he criticised the WP for being irresponsible for not saying how it plans to pay for cheaper flats.
Mr Mah, whose ministry oversees the Housing Board, said the WP should state if it wants a larger subsidy or government spending to be cut in other areas because 'you can't get something for nothing'.
Yesterday, Mr Low fired back, saying it is not a subsidy, but a discount based on market prices, which would fluctuate over time.
He also responded to Mr Mah's comments that the HDB already operates at a loss, and so lower prices would further reduce its revenue.
Mr Low believes land costs make up the bulk of the board's expenses in building flats. And if that is lowered by the Singapore Land Authority, HDB would not have to suffer such a loss, and the savings could be passed on to first-time home buyers.
The key is if the Government is prepared to collect less money from land sales. 'It is a question of taking your money from the left pocket and putting in the right pocket. So, let us know what is the land cost,' he pressed.
The money from land sales on long lease is not included as part of the budget for current government spending, but goes into the reserves, he added, citing a previous official reply in Parliament.
The WP's proposal, he stressed, is driven by its concern that new public housing could become unaffordable for young Singaporeans.
Even though some Singaporeans have benefited from their homes rising in value, he wondered about its sustainability.
'Can the Government tell us how much more you can enhance your asset 20 years down the road? There is always a threshold in terms of property, right?' asked Mr Low.
'Perhaps 20 years down the road, maybe HDB flats will cost you more than $1 million.'
He also stressed that asset enhancement is largely meaningful and useful for investment, but not for homes that people live in. He said it means little unless homeowners sell their homes, but that could mean trade-offs, such as downgrading to smaller homes. And if the property bubble bursts, they would be left with negative assets, he said.
Mr Low asked: 'Can the PAP Government guarantee us that this will never happen down the road? Can they provide the guarantee?'
By Kor Kian Beng
WORKERS' Party (WP) chief Low Thia Khiang yesterday accused National Development Minister Mah Bow Tan of not giving Singaporeans the full picture on housing costs.
He maintained that his party's proposal to lower new flat prices would have 'minimal impact' on resale prices.
The Hougang MP cited two reasons: The number of new HDB flats is relatively small, and they are subject to a minimum occupancy period of five years before they can be sold on the resale market.
'So, how much can the price of a new flat affect the resale market price, and to the extent that he is saying that it is going to be a big impact? I think he is misleading the public,' said Mr Low, speaking to The Straits Times in an interview.
The opposition leader was responding to Mr Mah's criticisms of the WP's manifesto unveiled last Saturday. It proposes to lower new HDB flat prices by pegging them to the median incomes of Singaporeans. Now, it is tied to resale market prices, and then discounted.
Mr Mah warned the WP's proposal would lower the value of Singapore's one million homes in what he called an 'asset-devaluation policy', as opposed to the People's Action Party's (PAP) asset- enhancement policy.
He explained that the housing markets are interlinked, and so a reduction in new HDB flat prices would have an impact on the resale flat market.
The government subsidy on new flats, he added, already adds up to $1 billion yearly, as he criticised the WP for being irresponsible for not saying how it plans to pay for cheaper flats.
Mr Mah, whose ministry oversees the Housing Board, said the WP should state if it wants a larger subsidy or government spending to be cut in other areas because 'you can't get something for nothing'.
Yesterday, Mr Low fired back, saying it is not a subsidy, but a discount based on market prices, which would fluctuate over time.
He also responded to Mr Mah's comments that the HDB already operates at a loss, and so lower prices would further reduce its revenue.
Mr Low believes land costs make up the bulk of the board's expenses in building flats. And if that is lowered by the Singapore Land Authority, HDB would not have to suffer such a loss, and the savings could be passed on to first-time home buyers.
The key is if the Government is prepared to collect less money from land sales. 'It is a question of taking your money from the left pocket and putting in the right pocket. So, let us know what is the land cost,' he pressed.
The money from land sales on long lease is not included as part of the budget for current government spending, but goes into the reserves, he added, citing a previous official reply in Parliament.
The WP's proposal, he stressed, is driven by its concern that new public housing could become unaffordable for young Singaporeans.
Even though some Singaporeans have benefited from their homes rising in value, he wondered about its sustainability.
'Can the Government tell us how much more you can enhance your asset 20 years down the road? There is always a threshold in terms of property, right?' asked Mr Low.
'Perhaps 20 years down the road, maybe HDB flats will cost you more than $1 million.'
He also stressed that asset enhancement is largely meaningful and useful for investment, but not for homes that people live in. He said it means little unless homeowners sell their homes, but that could mean trade-offs, such as downgrading to smaller homes. And if the property bubble bursts, they would be left with negative assets, he said.
Mr Low asked: 'Can the PAP Government guarantee us that this will never happen down the road? Can they provide the guarantee?'
