Temasek Review
In spite of the prevailing public sentiments, National
Development Minister Mah Bow Tan repeated his stance yesterday at
Parliament that HDB flats are still “affordable” to
Singaporeans.
Mr Mah used a formula called the debt service ratio (DSR) which
compares the monthly mortgage installment to the monthly household
income to substantiate his claims.
The DSR ranges between 17 to 25 percent for new flats and around
30 percent for mature flats in central locations.
“These figures are within the international benchmark for
housing affordability, which ranges from 30 per cent to 35 per
cent,” Mr Mah was quoted as saying in the Straits Times
today.
Mr Mah also admitted that “it is possible that prices of resale
flats have risen faster than incomes when indexed against different
years.” in response to a question by PAP MP Lim Biow Chuan.
In an extensive interview with the Straits Times a few weeks
ago, Mr Mah used two sets of figures from the years 1999 and 2009
to show that the relative pace of income has “out-paced” that of
HDB flat prices.
The statistics were disputed by Reform Party member Hazel Poa
who wrote on her blog that the results would be different if the
base year is different, causing much embarrassment to Mr Mah.
The increasingly unpopular Mr Mah has come under fire of late
from Singaporeans for his failure to control runaway HDB flat
prices which have hit a record high in the last few months, caused
partially by rising demand fueled by mass immigration.
Though PRs form some twenty percent of the buyers in the resale
market, Mr Mah insisted that they have “negligible” impact on the
prices.
He also lashed out at first time home buyers for being “fussy”
and having “unrealistic” expectations.
Mr Mah earns around $2 million dollars a year, or more than 4
times the annual salary of U.S. President Barack Obama.
PAP strongman Lee Kuan Yew castigated Singaporeans for being
“daft” should they cast a protest vote against Mr Mah in the next
general election over sky-rocketing HDB flat prices.
