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Shanmugam: Singaporeans likely “culprits” for driving up HDB flat prices
January 18, 2010 by admin
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Written by Our Correspondent
Singaporeans are again blamed for the misguided policies of the ruling party which continues to turn a blind eye towards the problems it has created.
Despite the obvious fact that the relentless influx of foreigners over the years has led to a sky-rocketing of HDB flat prices, PAP leaders are adamant that foreigners are not to be blamed.
So who is responsible for supporting the HDB flat prices even in the midst of a recession? As expected, the fault lies with Singaporeans.
According to Law Minister Mr Shanmugam’s “hunch”, Singaporeans are the likely culprits. He did not provide any evidence to substantiate his allegations.
(and we are paying him SGD$2 million dollars a year for his “hunches”, not much better than his mentor – the “forecaster extraordinarie”)
“The first misconception is that somehow there are five million people and that is putting pressure on all of us. It doesn’t. Of the five million, 3.2million are citizens, and roughly 500,000 are permanent residents (PRs). The remaining 1.3million are here on temporary work permits, and they ‘impose no burden’ on the public housing system,” said Mr Shanmugam.
He was speaking during a dialogue session with Yew Tee residents in Hong Kah GRC.
Asked by another Yew Tee resident about the high prices, he shot back:
“‘You say maybe foreigners are paying these high valuations. I think if you check, you’ll find that the majority are Singaporeans. The foreigners who come here and look at HDB flats generally buy the lower value flats.”
Mr Shanmugam’s stance on the matter is similar to his colleague National Development Minister Mah Bow Tan who told parliament lately that “PR households owning HDB flats is a small proportion of all HDB households”.
However, Mr Mohamad Ismail, the CEO of Propnex quoted a figure of 20 per cent when asked by The Straits Times a few weeks ago.
Another real estate agency ERA claimed in a report in July last year that 40 per cent of the buyers of resale flats are PRs while C&H put the figure at 50 per cent.
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. According to Home Affairs Minister Wong Kan Seng, there are over 20,000 new citizens and 90,000 PRs last year.
Besides competing with Singaporeans for HDB flats, PRs sometimes also “spoil” the market by over-paying for them.
An Indonesian PR forked out $653,000 for a four room resale flat in Queenstown in October 2009 when he could well afford a private condominium.
As the prices of new BTO flats are pegged to that of resale flats in the vicinity, this may contribute indirectly to the astronomical prices of the Dawson project launched a few months later where 5-room flats fetches as high as $660,000.
A Financial Consultant interviewed by Lianhe Wanbao advised Singaporeans not to buy these flats unless they earn more than $7,500 monthly.
Mr Shanmugam also repeated Mr Mah’s earlier assertion that HDB flats remain “affordable” to Singaporeans as “eight in 10 Singaporeans pay their HDB monthly mortgages completely with funds from their CPF savings and do not cough up any additional cash.”
Quoting the affordability benchmark of 30 per cent used frequently by HDB to show that HDB flats remain affordable to ordinary Singaporeans, Mr Mah said recently that a family with a monthly income of $3,000 can buy a flat worth up to $250,000 and spend only 30 per cent of their income every month on the mortgage.
“Similarly, a family with a monthly income of $4,000 can afford to buy a new flat worth up to $333,000 without spending more than 30 per cent a month on the mortgage. This means they can comfortably buy any of the flats offered in the latest BTO projects this month,” he added.
Both Mr Shanmugam and Mr Mah’s public statements are quite “divorced of reality”.
Instead of acknowledging the problem and tackling it, they chose to blame Singaporeans for their mistakes in order to defend the foreigners whom they are so infatuated with.
January 18, 2010 by admin
Filed under Headlines
Leave a comment
Written by Our Correspondent
Singaporeans are again blamed for the misguided policies of the ruling party which continues to turn a blind eye towards the problems it has created.
Despite the obvious fact that the relentless influx of foreigners over the years has led to a sky-rocketing of HDB flat prices, PAP leaders are adamant that foreigners are not to be blamed.
So who is responsible for supporting the HDB flat prices even in the midst of a recession? As expected, the fault lies with Singaporeans.
According to Law Minister Mr Shanmugam’s “hunch”, Singaporeans are the likely culprits. He did not provide any evidence to substantiate his allegations.
(and we are paying him SGD$2 million dollars a year for his “hunches”, not much better than his mentor – the “forecaster extraordinarie”)
“The first misconception is that somehow there are five million people and that is putting pressure on all of us. It doesn’t. Of the five million, 3.2million are citizens, and roughly 500,000 are permanent residents (PRs). The remaining 1.3million are here on temporary work permits, and they ‘impose no burden’ on the public housing system,” said Mr Shanmugam.
He was speaking during a dialogue session with Yew Tee residents in Hong Kah GRC.
Asked by another Yew Tee resident about the high prices, he shot back:
“‘You say maybe foreigners are paying these high valuations. I think if you check, you’ll find that the majority are Singaporeans. The foreigners who come here and look at HDB flats generally buy the lower value flats.”
Mr Shanmugam’s stance on the matter is similar to his colleague National Development Minister Mah Bow Tan who told parliament lately that “PR households owning HDB flats is a small proportion of all HDB households”.
However, Mr Mohamad Ismail, the CEO of Propnex quoted a figure of 20 per cent when asked by The Straits Times a few weeks ago.
Another real estate agency ERA claimed in a report in July last year that 40 per cent of the buyers of resale flats are PRs while C&H put the figure at 50 per cent.
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:
Besides competing with Singaporeans for HDB flats, PRs sometimes also “spoil” the market by over-paying for them.
An Indonesian PR forked out $653,000 for a four room resale flat in Queenstown in October 2009 when he could well afford a private condominium.
As the prices of new BTO flats are pegged to that of resale flats in the vicinity, this may contribute indirectly to the astronomical prices of the Dawson project launched a few months later where 5-room flats fetches as high as $660,000.
A Financial Consultant interviewed by Lianhe Wanbao advised Singaporeans not to buy these flats unless they earn more than $7,500 monthly.
Mr Shanmugam also repeated Mr Mah’s earlier assertion that HDB flats remain “affordable” to Singaporeans as “eight in 10 Singaporeans pay their HDB monthly mortgages completely with funds from their CPF savings and do not cough up any additional cash.”
Quoting the affordability benchmark of 30 per cent used frequently by HDB to show that HDB flats remain affordable to ordinary Singaporeans, Mr Mah said recently that a family with a monthly income of $3,000 can buy a flat worth up to $250,000 and spend only 30 per cent of their income every month on the mortgage.
“Similarly, a family with a monthly income of $4,000 can afford to buy a new flat worth up to $333,000 without spending more than 30 per cent a month on the mortgage. This means they can comfortably buy any of the flats offered in the latest BTO projects this month,” he added.
Both Mr Shanmugam and Mr Mah’s public statements are quite “divorced of reality”.
Instead of acknowledging the problem and tackling it, they chose to blame Singaporeans for their mistakes in order to defend the foreigners whom they are so infatuated with.
