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[h=2]High property price can become PAP’s political undoing if it is not
resolved[/h]
September 17th, 2012 |
Author: Contributions
The Housing Development Board’s achievements in the 1960s that put
the ruling PAP into power can become its political undoing if property price
woes are not resolved.
FIFTY years after launching its mass public housing at a
few thousand dollars per flat, Singapore last week made the kind of history few
people wanted to see.
A resale maisonette from the Housing Development Board (HDB), which still
designs homes to help the broad masses, changed hands for a record one million
dollars.
In principle, the rising values should have excited Singaporeans since 85% of
them are property owners, but instead the news created widespread concern.
In recent years, Singaporeans had grown unhappy with skyrocketing home costs
that were aggravated by an inflow of new migrants.
That the pricey apartment was bought by a newly converted citizen from China
added to the fear.
Home values have more than doubled over the past decade, putting them out of
many Singaporeans’ reach.
Singaporeans expect the apartment sale will set new benchmarks for public
housing. Until the million-dollar crossing, several units had been transacted
for S$900,000-plus (RM2.3mil-plus), the last being S$980,000 (RM2.5mil) for a
Bishan unit.
Buyers, both locals and foreigners, are readier to pay more and more for both
private and public properties in anticipation of the government’s continued
open-door policy.
A local reporter said: “You can’t inject two million foreigners into this
small island without creating a huge demand for homes.”
“(This deal means that) Singaporean-born Singaporeans will soon find
themselves pushed out of their homeland by foreigners,” said Patrick.
Others feel HDB prices should not be determined by market forces.
“When the market dictates, this crucial commodity will increasingly move from
the hands of the poor to benefit the rich,” said a polytechnic student.
In land-squeezed Singapore, the demand for property will always grow as long
as there is growth and stability. Adding to it is the stress caused by the
arrival of migrants.
Land, on the other hand, is a finite commodity that rarely increases.
This explains the rising concerns of fresh graduates about being eased out of
the market.
The million-dollar furore has prompted National Development Minister Khaw
Boon Wan to issue a statement urging Singaporeans not to be “traumatised” by
it.
The Penang-born Khaw added: “There will always be units with fantastic views
that fetch fantastic prices….”
Since independence 47 years ago, Singapore’s history has been closely linked
to the state of the city’s real estate as well as the achievements of the
HDB.
Since its establishment in 1960, the HDB has won world acclaim for building
more than one million homes and helping to turn a squatter colony into a
developed city.
Its work is not just bricks and mortar; it has changed and moulded the
lifestyles of millions of people.
Its first apartment was a relatively crude three-room structure sold for
S$6,000 (RM6,000 then), a princely sum in an age when per capita GDP was only
S$1,310 (RM1,310 then).
Today’s new three-room flat costs about S$340,000 (RM851,644), but the
country’s per capita GDP has increased to S$70,450 (RM176,483).
By simple comparison, the hike in public housing prices (at 56.6 times)
appears almost comparable with the increase in per capita GDP growth (53.8
times) between 1960 and 2010.
This, however, may be too sweeping since it fails to take into account the
rising cost of living and the widening economic gap.
The modern generation of HDB housing is, however, no longer the crude version
of the 1960s. Most are ultra-modern in design, albeit slightly smaller in
size.
Recently, the biggest impact has been the large influx of middle-class
professionals and small businessmen from Malaysia, China and India. And HDB
costs have not been spared.
Tan Kin Lian, a failed candidate for the presidential election last year,
said in the past when HDB flats were designed to house the poor, a single
breadwinner could buy it on a 20-year loan.
Now it has to be financed by a double-income family stretching over 30 years,
reflecting its unaffordability, he said.
A naturalised citizen is entitled to buy a cheaper new flat from the HDB, but
it would have meant queuing up for several years and ending up with a different
unit or location.
Singaporeans are generally not opposed to new citizens buying public flats
and enjoying the same rights as locals.
Their anger is directed at the larger body of permanent residents admitted
every year and allowed to buy resale flats, adding pressure on prices.
With an independence history of only 47 years, Singapore is like an infant.
Occasionally, officials still talk of wanting an enlarged population of six to
seven million in 30 years.
“This continuing anticipation of future demand is actually fuelling a reason
to invest in property here,” said a real estate agent. “It’s hard for prices to
come down short of a recession.”
Currently, Singapore is witnessing the modern version of a new immigration
wave hitting the island, proportionately as big if not bigger than earlier ones
in the last century.
But this time the arrivals have not come on refugee ships wearing only the
shirts on their backs.
Instead they fly in on modern aeroplanes, many of them carrying university
degrees and accumulated personal wealth that can pay for Singapore’s expensive
properties.
“Many of them know that putting money into property here has little risk,”
said the agent.
The million-dollar HDB unit is almost certain to hasten the trend for further
hikes. Ironically, it was the HDB’s brilliant achievements in the 1960s that put
the ruling People’s Action Party (PAP) into power.
Today the new pressures of demand and cost could become its political
undoing, if the problem is not resolved.
.
Seah Chiang Nee
Chiang Nee has been a journalist for 40 years. He is a true-blooded
Singaporean, born, bred and says that he hopes to die in Singapore. He worked as
a Reuters corespondent between 1960-70, based in Singapore but with various
assignments in Southeast Asia, including a total of about 40 months in (then
South) Vietnam between 1966-1970. In 1970, he left to work for Singapore Herald,
first as Malaysia Bureau Chief and later as News Editor before it was forced to
close after a run-in with the Singapore Government. He then left Singapore to
work for The Asian, the world’s first regional weekly newspaper, based in
Bangkok to cover Thailand and Indochina for two years between 1972-73. Other
jobs: News Editor of Hong Kong Standard (1973-74), Foreign Editor of Straits
Times with reporting assignments to Asia, Europe, Africa, the Middle East and
The United States (1974-82) and Editor of Singapore Monitor (1982-85). Since
1986, he has been a columnist for the Malaysia’s The Star newspaper. Article
first appeared in his blog, http://www.littlespeck.com.
resolved[/h]
The Housing Development Board’s achievements in the 1960s that put
the ruling PAP into power can become its political undoing if property price
woes are not resolved.
few thousand dollars per flat, Singapore last week made the kind of history few
people wanted to see.
A resale maisonette from the Housing Development Board (HDB), which still
designs homes to help the broad masses, changed hands for a record one million
dollars.
In principle, the rising values should have excited Singaporeans since 85% of
them are property owners, but instead the news created widespread concern.
In recent years, Singaporeans had grown unhappy with skyrocketing home costs
that were aggravated by an inflow of new migrants.
That the pricey apartment was bought by a newly converted citizen from China
added to the fear.
Home values have more than doubled over the past decade, putting them out of
many Singaporeans’ reach.
Singaporeans expect the apartment sale will set new benchmarks for public
housing. Until the million-dollar crossing, several units had been transacted
for S$900,000-plus (RM2.3mil-plus), the last being S$980,000 (RM2.5mil) for a
Bishan unit.
Buyers, both locals and foreigners, are readier to pay more and more for both
private and public properties in anticipation of the government’s continued
open-door policy.
A local reporter said: “You can’t inject two million foreigners into this
small island without creating a huge demand for homes.”
“(This deal means that) Singaporean-born Singaporeans will soon find
themselves pushed out of their homeland by foreigners,” said Patrick.
Others feel HDB prices should not be determined by market forces.
“When the market dictates, this crucial commodity will increasingly move from
the hands of the poor to benefit the rich,” said a polytechnic student.
In land-squeezed Singapore, the demand for property will always grow as long
as there is growth and stability. Adding to it is the stress caused by the
arrival of migrants.
Land, on the other hand, is a finite commodity that rarely increases.
This explains the rising concerns of fresh graduates about being eased out of
the market.
The million-dollar furore has prompted National Development Minister Khaw
Boon Wan to issue a statement urging Singaporeans not to be “traumatised” by
it.
The Penang-born Khaw added: “There will always be units with fantastic views
that fetch fantastic prices….”
Since independence 47 years ago, Singapore’s history has been closely linked
to the state of the city’s real estate as well as the achievements of the
HDB.
Since its establishment in 1960, the HDB has won world acclaim for building
more than one million homes and helping to turn a squatter colony into a
developed city.
Its work is not just bricks and mortar; it has changed and moulded the
lifestyles of millions of people.
Its first apartment was a relatively crude three-room structure sold for
S$6,000 (RM6,000 then), a princely sum in an age when per capita GDP was only
S$1,310 (RM1,310 then).
Today’s new three-room flat costs about S$340,000 (RM851,644), but the
country’s per capita GDP has increased to S$70,450 (RM176,483).
By simple comparison, the hike in public housing prices (at 56.6 times)
appears almost comparable with the increase in per capita GDP growth (53.8
times) between 1960 and 2010.
This, however, may be too sweeping since it fails to take into account the
rising cost of living and the widening economic gap.
The modern generation of HDB housing is, however, no longer the crude version
of the 1960s. Most are ultra-modern in design, albeit slightly smaller in
size.
Recently, the biggest impact has been the large influx of middle-class
professionals and small businessmen from Malaysia, China and India. And HDB
costs have not been spared.
Tan Kin Lian, a failed candidate for the presidential election last year,
said in the past when HDB flats were designed to house the poor, a single
breadwinner could buy it on a 20-year loan.
Now it has to be financed by a double-income family stretching over 30 years,
reflecting its unaffordability, he said.
A naturalised citizen is entitled to buy a cheaper new flat from the HDB, but
it would have meant queuing up for several years and ending up with a different
unit or location.
Singaporeans are generally not opposed to new citizens buying public flats
and enjoying the same rights as locals.
Their anger is directed at the larger body of permanent residents admitted
every year and allowed to buy resale flats, adding pressure on prices.
With an independence history of only 47 years, Singapore is like an infant.
Occasionally, officials still talk of wanting an enlarged population of six to
seven million in 30 years.
“This continuing anticipation of future demand is actually fuelling a reason
to invest in property here,” said a real estate agent. “It’s hard for prices to
come down short of a recession.”
Currently, Singapore is witnessing the modern version of a new immigration
wave hitting the island, proportionately as big if not bigger than earlier ones
in the last century.
But this time the arrivals have not come on refugee ships wearing only the
shirts on their backs.
Instead they fly in on modern aeroplanes, many of them carrying university
degrees and accumulated personal wealth that can pay for Singapore’s expensive
properties.
“Many of them know that putting money into property here has little risk,”
said the agent.
The million-dollar HDB unit is almost certain to hasten the trend for further
hikes. Ironically, it was the HDB’s brilliant achievements in the 1960s that put
the ruling People’s Action Party (PAP) into power.
Today the new pressures of demand and cost could become its political
undoing, if the problem is not resolved.
.
Seah Chiang Nee
Chiang Nee has been a journalist for 40 years. He is a true-blooded
Singaporean, born, bred and says that he hopes to die in Singapore. He worked as
a Reuters corespondent between 1960-70, based in Singapore but with various
assignments in Southeast Asia, including a total of about 40 months in (then
South) Vietnam between 1966-1970. In 1970, he left to work for Singapore Herald,
first as Malaysia Bureau Chief and later as News Editor before it was forced to
close after a run-in with the Singapore Government. He then left Singapore to
work for The Asian, the world’s first regional weekly newspaper, based in
Bangkok to cover Thailand and Indochina for two years between 1972-73. Other
jobs: News Editor of Hong Kong Standard (1973-74), Foreign Editor of Straits
Times with reporting assignments to Asia, Europe, Africa, the Middle East and
The United States (1974-82) and Editor of Singapore Monitor (1982-85). Since
1986, he has been a columnist for the Malaysia’s The Star newspaper. Article
first appeared in his blog, http://www.littlespeck.com.
