Daily Lessons from Life 09 March 2013 - Plans to bring BTO prices to around 4 years of salary: Khaw

"Plans to bring BTO prices to around 4 years of salary: Khaw - AsiaOne Saturday, Mar 09, 2013

SINGAPORE - A relook at current public housing policies is necessary in the light of significant demographic and economic changes, National Development Minister Khaw Boon Wan said yesterday in Parliament.

He added that the primary mission of HDB to offer an affordable flat for the majority of Singaporeans will remain unchanged.

"We have stopped BTO prices from rising by delinking them from resale prices. We can now pause and see what else we can do to bring BTO prices in non-mature estates to say, around 4 years of salary as it was before the current property cycle started.

We will do so partly through cooling measures to nudge the property market down; partly by seeing if an alternative housing option can be designed," said Mr Khaw."

A BOLD initiative in my mind Minister Khaw.

Lessons for me are:

1. after creating the 'the surest way to get rich is through owning a property, any property' phenomenon, it will be difficult and delicate to 'deflat the inflated beast' while keeping collateral damages to the minimal!;

2. as I have always proclaimed, it is about the balance between: '1st time HBD young Singaporean couples/voters starting a 3-kid family without mortgaging their lives just to pay for the roofs over their heads' vs. 'the old 'appreciating HDB owners/voters who had made tons of money, on papers anyway if they had not sold, on their 1st HDB flat' vs. the recent 'we better buy as the property prices can only go up and we will not be able to afford it if we don't buy now even if we have to mortgage our lives for them' vs. the 'see how smart we are in flipping and making tons of easy money and not have to work like dogs like my parents/less smart people'!

Will there be an elegant solution? I think not. It will be ugly. 1st the 'speculators or new rich via property deals', nobody will shed a tear for them except themselves. So they can GO DOWN. Maybe along with the lenders!! The 'made tons of money on old HDB flats but not sold yet', not an issue if they can live with the 'lower paper gain' or lower realised gain! As for the 'our hands were forced', too bad! Shxt happen! Finally for the genuine young start-up couples with the intention of raising 3-kids, you should be able to do that if the 4-year salary is about S$5k x 2 x 13 mths x 4 yrs = S$520k after working for 5-year. That will give time to date and then get married and ready to have babies with the 1st HBD flat to provide shelter over the family's heads!;

3. as for PRIVATE properties, it should be left to the market devices. HBD flat will NO LONGER be a route to 'upgrade' to private properties. If you want to own one comfortably, make sure you find a job that pay or to start a successful business that pay!

As for the ex-Ministers who are rumoured to own more than 10 high priced properties, maybe they will suffer some paper losses. Do they care? They do though they SHOULD NOT. After all, their 'losses', and just a portion of it only, can help the 70-80% Singaporeans own a public property and look forward to living it! A small price to pay. Yes?