Dear Fatum,
You are mixing a lot of issues into the thread.
First of all, you say your HDB flat is cheap. Good for you but I
guess if we have not been making noise about HDB issues, you will
be paying $240K to $290K for a new 4 room flat from HDB. If you
don't believe, check out the prices of HDB in 2008 and 2009.
Besides, whether the new HDB flat is cheap or not, depends on your
income. As I can see that you are a graduate, naturally you don't
feel the pinch of paying $200K for a new 4 room HDB flat. But
please note that there are many people earning much lesser than you
are.
HDB is a MONOPOLY in the new flat market. It is a government
agency or stats board with an aim of providing affordable housing
to Singaporeans, not a private entity that is profit orientated. As
I have explained before, you cannot look at HDB alone but the whole
set of socialist system that were set up when PAP took power in
1959.
You must look at HDB along with the Land Acquisition Act (back
in the 1970s and 1980s). Take them together, you will realize that
it is a modern Land reform or Land redistribution system. i.e. we
empower the government to acquire land at cheap dirt price so that
it could redistribute land in terms of cheap and affordable housing
to the masses. In fact, prior to the government amending the act in
2007, it has acquired almost 80% of land in Singapore at dirt cheap
prices. But the social contract is that the responsibility of
providing cheap or even subsidized housing for the masses lies on
the government of the day. PAP government cannot just have their
cake and eat it. They are shirking off their responsibility slowly.
In fact, if we look at the costing, they might even have made
profits from HDB sales basically from the land costing they imposed
on the HDB flats.
PAP's most important political capital of the early years is
Land redistribution via Land Acquisition Act and HDB. Those people
whose land are being acquired may grumble but they knew that the
government did put their land for good use... HDB flats for many
other Singaporeans. But now, with the change of policy direction to
one of "HIGH HDB PRICE POLICY", this is no longer true. This is the
crux of the matter.
Thus, you must look at things as a whole, not about the
comparisons between countries blindly. Just like you complain about
the high taxation of Canadia. You are only telling half of the
truth. You are enjoying world class health care at dirt cheap
prices because of the government subsidies. Your children will
benefit from the lots of subsidies including education if you get
married there. Not to mention the social welfare and security you
enjoy when you retire or lose your jobs.You pay high taxes but in
return, it is the social contract that the Canadian government will
take care of you as well.
You may pay less tax in Singapore but when you lose your job,
you are on your own. Health care prices are rising, not to mention
the indirect taxes like COE, GST and high prices here (eg.
increasing education cost). There are no free lunch in this
world. You said that your friend bought a house for $480K but what
lease? HDB is 99 years and it is a basic public housing. $480K is
for a landed house? Of what size? In Singapore, you could well pay
$480K for a 5 room HDB flat or executive flat in matured estate.
HDB, lease hold without strata titles. That's the deal you are
getting.
Sometimes, we will need to compare apple to apple, orange to
orange. The only consolation right now is that the HDB loan rate is
2.6%. But you must also remember that CPF only pays 2.5% for
Ordinary Account balances to citizens. This is fair play. However,
you may still end up with a standard bank loans if you used up your
entitlement of this favorable rate; especially so if you think you
can buy and sell your HDB flats to earn money.
Canadian has pension for their old age because they pay high
taxes and that is why they need worry about their retirement
financing. i.e. they don't need to pay CPF. But in Singapore, CPF
IS SUPPOSED TO BE YOUR RETIREMENT FUND! If you use almost all of
your retirement funds in CPF for HDB mortgage as well as medisave,
how are you going to survive? You won't have a retirement funding
and this is why PAP say that you can sell or "monetize" your HDB
flat for retirement. Do Canadians need to sell their house for
retirement? ;)
I am against housing to be over priced which end up with people
throwing all their retirement funds into the mortgage payment. If
the Canadian needs a mortgage of 40 years to pay off their mortgage
but that is their problem, not Singaporeans. Of course, their
children can help to pay off the loans and they don't need to sell
the house for retirement.
Besides, I believe Canadians have lots of choices for
housing. They have huge land mass and they could choose to live at
the country side or further away from the city area which houses
could be very cheap. But Singaporeans do not have such luxury. HDB
flats are the CHEAPEST housing available here and if this form of
housing also become higher cost due to PAP's intention of
implementing HIGH HDB PRICE POLICY, then Singaporeans will have no
other better alternatives.
You should try to compare the CHEAPEST housing you can get in
Canada and compare it with Singapore's HDB flats. This will be a
more appropriate comparison.
Your assumption of exponential growth of housing needs is
totally flawed. You are assuming people like you and me will not
die one day. ;)
We are having an aging population. Without the influx of FT and
PRs, the housing demand will increase initially but fall after the
peak of the aging population has been crossed. So, please don't
assume that housing needs will increase forever unless the ruling
party keep increasing the population size by importing foreigners.
And this is precisely part of the problem now; HDB resale market
faces higher prices due to the huge increase in PRs.
A public housing policy coupled with a leasehold land will make
sure that there will be no shortage of housing for Singaporeans
unless the government of the day mismanage the population policy by
importing excessive foreigners. This is the key point.
Goh Meng Seng
Mr Goh,
I see you've grafted large bits from the featurette at your
party's website, did you write that as well ? 
As to country-to-country comparisions, would your eyes let you
see, what your doesn't doesn't want to see ? True, high taxation
brought about so called "free" health care, but socialist medicine
there is not what it appears to be. Older forumers remember the
time when I fell sick there, and delirious with fever, made my way
down to a clinic there and was told the doc couldn't see me cos he
has met his union-dictated quota of patients for the day. Or would
you read about canadians who travel to other countries for
"non-life-threatening, but certainly very debilating conditions"
like a hip replacement ?
But don't you find it ironic that someone who's never lived and
worked there is trying to tell me that the place I have lived for
half a decade is indeed much better than I thought ? You find it
amusing? My personal decision to return wasn't that simplistic of
course, as some of the friends I've made here in the forum would
know, but that is my personal business. True, there's a social
safety net that I've seen most often go to the lazy, parasitic bums
of that society, thanks to high taxation, but, since you also
acknowledge that Singapore's taxes are much lower, why should you
harbor the sense of entitlements for such things too ? Apples to
apples, oranges to oranges. Is it reasonable to expect to have your
cake and eat it too, in this case ?
And, do you think it's realistic to compare what you can get for
the same amount of money in a land scarce place like Singapore to a
land rich country like canada or australia where they can just
build upon the urban sprawl and extend the suburbs ever outwards ?
The landed property I live in currently (my parents, not mine),
costs more than 2 million now, that same amount of money can get me
a landed four times as large in vancouver, but it would hardly get
me my cousin's apartment in NYC, nor, I think, a house in hong kong
or shanghai. Heck, but it would buy me an entire estate complete
with a plantation just across the causeway ! On the other hand, the
baseline housing unit may be an attap shack in malaysia, the
smallest HDB in Singapore, and a shanty tenement in hong kong, a
cottage in the canadian midwest, and a highrise apartment in
toronto, Do you think it is reasonable to expect compare categories
of properties like this as a value guage ? Apples to apples ?
I think not.
Next, let's examine costs. After so much chest thumping about
the High HDB Prices. What then, in your opinion. is an "affordable"
price for a public housing unit then ? for a 3 room ? 4 room, 5
room, EC unit ? True enough, I concede that for some people, the
prospect of paying $200+k for a brand new 4 room HDB flat is a
daunting prospect, but can you put a figure on universal
affordability, and not fob it off as "affordability being relative"
? So what do you think is an acceptable price for you, for, say, a
4 room brand new HDB flat ? Would I hear the same gripe from you,
as I'd expect from some other forumers who've been participating in
this thread here, even if the price was say, 150k ? or even 100k ?
50k ? 10k. Let's keep in mind that we are looking at brick and
mortar buildings to be built after the sand ban from the
neighbouring countries here, not paper leng chus people burn for
their ancestors eh.
And at the risk of sounding snobbish, there ARE much cheaper,
smaller sized BTO flats on offer right now, some of them costing
considerably less than $100k. Or has our expectations of public
housing evolved from a "roof over our heads" to the stage where a
certain miminum unit size is seen to be an entitlement ? In the
early days of the HDB slum clearing and rural resettlement was the
key goal, so masses of spartan, 1 to 3 room units were built. I was
chatting with my father-in-law the other day, the gentleman's first
HDB unit was a 1 bedroom unit at old airport road, and that's where
my fiance was made. How times have changed, isn't it ? How did we
end up at the stage where even young couples starting out are
determined to squeeze into a 4 or 5 room flat, even when their
personal finances clearly doesn't allow it. And when their personal
financial situation becomes the fault of someone else other than
themselves, don't you think there is something clearly wrong with
the attitudes of such people ? Don't you, as a politician and a
concerned citizen, feel something is wrong ? Or would it be just a
political opportunity ? Public policies cannot rectify individual's
lack of fiscal responsibility after all.
So onto the CPF. And you're right, the CPF is our retirement
fund, it is our money. So what's wrong with the idea of using our
money to pay for our flats ?
Let's use a simple analogy here.
I earn $1, twenty cents go into a kitty that I won't see for
thirty years. if I am allowed to take out 10 cents for every dollar
I earn to pay for a place, why not ? Does it not make sense to pay
for the house out from the kitty, so I'll have more current income,
instead of being left with 70 cents instead of 80 cents ?
But aha ! Remember Mr Goh, that we have three CPF accounts ? one
medisave, one special account, and one ordinary account ? The
special account's interest rate is higher than the interest rate of
the ordinary account. That is meant for old age and retirement
purposes. You can, if you so choose, transfer money to the special
account whenever you want, you can also, if you so choose, leave
whatever money you have in your ordinary account alone, so you can
have a much fatter retirement and not have to "monetize" your flat.
It is not a hard and fast rule that you must pay it out from your
ordinary account Mr Goh. the conditions and rulings are all in the
open domain, feel free.
If you don't like your CPF ordinary account to be touched at all
then of course you can pay it out from current earnings ! If not
the CPF, and not current earnings, where else do you expect the
mortgage payment to come from ? Mortgage payment is not an
exclusively singaporean phenomenon, the only difference is that we
can have the option of not having to pay it from our gross
paychecks.
So what's really the problem here ?
