Find right balance in housing

Clivebenss SG

WHILE the asset-appreciation policy benefits the current generation who own homes by providing them with a valuable asset which can be monetised should a financial need arise and give them a stake in the country and its future, it has its drawbacks ('Perils of asset enhancement for younger Singaporeans' by Mr Tan Jiaqi; Monday)

As Mr Tan noted, such a policy sharpens the divide between those who own a home and those who do not. Future generations of Singaporeans may find it increasingly difficult to afford a home if housing prices continue to escalate as experienced in recent years. This is especially so for those not fortunate enough to inherit a dwelling.

An unintended implication of the Government's explicit commitment to grow the value of homes over time is to push property prices beyond what they should be in the absence of such a commitment.

Indeed, potential home buyers would expect higher property prices in the future and be willing to pay more for their home purchases today.

Also, some who might otherwise delay their purchases to a later, more suitable time, are now induced to make a hurried purchase, in anticipation of higher home prices in the future.

The Government must therefore weigh the benefits of providing current home owners with an asset that is almost guaranteed to rise in value against the cost of diminished affordability for future home buyers.

Finding the right balance is crucial for a healthy and sustainable housing market.

Seah Kah Cheng

Clivebenss SG

THE Government argues that by enhancing the value of HDB homes (read: increasing the prices of homes), it gives a valuable asset to Singaporeans and a stake in the country ('WP's housing proposal irresponsible, says Mah'; April 15).

I find this problematic on several counts. First, for the majority, the home is an indispensable basic necessity, not a disposable asset. When prices of homes increase, the average home owner is not able to gain from it - while he is able to sell at a higher price, it also means he has to buy the new home at a higher price. Only the rich who can afford more than one home stand to gain.

Second, it deepens the divide between the haves and have-nots, for those financially less well off either find homes slipping beyond their reach, or face the heavy burden of financing a huge loan.

Third, the objective of asset enhancement through rising home prices naturally conflicts with the objective of providing affordable housing. It is tough to balance the two and implement effective policies.

Fourth, the argument that asset enhancement ties Singaporeans to the country holds little water. Anecdotal evidence suggests that people who emigrate cite 'unaffordable housing' as a reason among others. Ironically, the rising property prices here means emigrants can use the gains from the property to buy a 'more affordable' home in a foreign country. In fact, a majority of Singaporeans are displeased with rising home prices.

Instead of thinking of increasing prices to enhance the 'asset value' of the home, we should start to recognise that an affordable home is an asset in itself. Keeping home prices low and affordable means Singaporeans, especially young people planning to start families and buy their first home, can rest assured that they will always be able to own a place to call their home.

I think this would provide a more rooted sense of belonging than that of an expensive house. We need to recognise that we are deriving much utility from that house even if its resale price remains stagnant. We need to appreciate that while stagnant prices may mean little capital gain when selling the current house, it also means not having to pay through the nose for the new one.

Let us go back to the primary objective of public housing - to provide affordable housing to the majority of the people. Let us recognise that affordable housing is an asset in itself, both to the individual and the nation.

Lai Nam Khim

Sibinfx SG

the argument that asset enhancement ties Singaporeans to the country holds little water. Anecdotal evidence suggests that people who emigrate cite 'unaffordable housing' as a reason among others. Ironically, the rising property prices here means emigrants can use the gains from the property to buy a 'more affordable' home in a foreign country.