The garmen's and ST view on rising HDB
prices
http://business.asiaone.com/Business/My%2BMoney/Property/Story/A1Story20090923-169356.html
Watching HDB price behaviour,
sensibly
THERE is a rising pitch of anxiety evident in queries and
feedback about HDB housing in recent months. These have centred on
affordability mainly, no surprise considering that the sudden spurt
in private property prices since July has boosted HDB values, which
already were holding better during the recession. Hence, complaints
about cash over valuation. Why don't buyers exercise their
democratic right to not pay a premium by looking in towns less
'prime'? Home buyers have also touched on policy issues like
household income ceiling and the operation of ethnic quotas.
National Development Minister Mah Bow Tan addressed most
outstanding grouses in a well-timed statement in Parliament last
week, but such is the variety of need and the habits of personal
preference that assurances would still leave some home-seekers
unconvinced.
Affordability is a bugbear, which in turn influences notions of
supply relative to demand. Median income and the ratio of household
income used for loan service (up to 30 per cent, as a general rule)
cited by the minister are indicative of most people's ability to
pay, but these are rough guides. In every flat type of up to five
rooms and the corresponding price ranges, households which fall
below the median income line could progressively be less able to
own their homes. That's a lot of families. Financing difficulty can
also arise when a family chooses a bigger flat than it can pay for,
or needs. There are far too many of these big-is-better purchasers.
But this is also where the comprehensiveness of HDB's
income-differentiated schemes and the different types of supporting
grants available reinforce affordability.
There is little doubt that state housing is affordable, whether
new or resale, if one considers carefully precise matching need.
The HDB has every conceivable flat type and location to suit every
budget. Home seekers create problems for themselves when,
as seen, they buy bigger places than they can comfortably finance.
They could also be unyielding about wanting to
live in 'mature' towns or to be near their parents, for the
(selfish?) child-minding convenience. It is an odd mentality that
regards only as 'ulu' the new towns which otherwise score heavily
in more spacious estate layout and the much nicer, contemporary
design of flats. And what of 'distance'? Farthest points on this
island are reachable inside an hour by public transport, faster by
car. Mr Mah urged buyers to be sensible about making
'trade-offs' between location and price. This newspaper would go further: If they
choose to be obstinate about quirks, they should not be hectoring
the HDB for impossible concession
