March 3, 2010
PAP MP Inderjit Singh is fast becoming the new Dr Tan Cheng Bock
of the PAP backbenchers with his frank, critical and bold questions
to hold the PAP ministers accountable for their actions though it
may not amount to much at the end of the day.
During the parliamentary session yesterday, Mr Inderjit Singh
embarrassed his fellow PAP MPs by castigating the government for
its ill-conceived liberal immigration policies which led directly
to sky-rocketing HDB flat prices:
“By bringing in too many people too quickly…the cost of
living has gone up rapidly. The clearest manifestation of this is
the cost of HDB flats,” he said, mincing no words.
He added that though PRs cannot buy new flats, demand by them in
the resale market can push up prices and the price of new HDB flats
is pegged to that of the resale market. Furthermore, the PRs who
rent HDB flats also contribute to rising prices.
National Development Minister Mah Bow Tan had only this to say:
PRs who make up “only” one in five resale flat buyers, have minimal
impact on resale prices.
20 per cent is a significant minority and is more than
sufficient to distort the market. According to some real estate
agencies like ERA, the figure is actually higher at 40 per
cent.
The prices of HDB flats have almost doubled in the last few
years, with that of resale flats hitting a record high in June 2009
when the economy was mired in recession and Minisster Mah must
accept full responsibility for it.
The abnormal situation is caused largely by the lack of
foresight of HDB to plan well ahead to build more flats to meet the
expected increase in demand for housing fueled by uncontrolled
immigration.
Recent launches of BTO flats are more than 5 to 10 times
subscribed even in less popular areas like Choa Chua Kang, an
indication of how serious the housing shortage has become.
Only slightly more than 11,000 new flats were built between
the years 2006 – 2008 when there were over 90,000 PRs and 20,000
new citizens alone in 2008:
[Source: HDB Financial Report 2008/2009]
Below is a graph illustrating how the rise in the prices of
resale flats coincides with the rise in the number of foreigners in
Singapore between the years 2000 and 2008, courtesy of Kojakbt, the
moderator of 3in1kopitiam:
Due to the ruling party’s liberal immigration policy, foreigners
now made up 36 per cent of Singapore’s population, up from 14 per
cent in 1990.
The prices of HDB flats are kept artificially high by building
less flats than needed to meet the demand and increasing the
population via immigration.
Unlike in other countries, PRs are allowed to purchase public
housing in Singapore from the open market with few restrictions.
Some PRs have “spoilt” the market by over-paying for the flats. An
Indonesian PR was reported in the media to pay $653,000 for a
4-room resale flat in Queenstown when he could well afford a
condominium.
Mr Mah said recently the Government was looking into measures
for the HDB market and that announcements would be made in
Parliament some time this week or the next.
Singaporeans can only pray hard that he will not be “caught
offguard” again.