Less profits, less subsidies: PAP MPs spill hard truths about cheaper HDB flats


Reviewing public housing policies from time to time is beneficial and required.

However, to say that a review is needed to deliver affordable housing because the Government is not doing its job is an allegation that needs addressing.

Yesterday (6 February 2023) in Parliament, several of our PAP MPs shared their views on how Singapore’s housing policies have remained affordable and accessible for Singaporeans.

They also shared their thoughts on the proposals made by the Progress Singapore Party (PSP), pointing out the trade-offs that Singaporeans have to incur if they were implemented.

Sitoh Yih Pin: Be careful what you wish for!

The proposals by the PSP to reduce BTO prices would lead to a fall in prices of resale flats, said Potong Pasir SMC MP Sitoh Yih Pin.

And is that something Singaporeans want?

To further illustrate his point, Mr Sitoh touched on the property market in Japan after the Tokyo stock market collapse.

“Property prices fell off the cliff and never recovered.”

Therefore, if Singapore were to adopt the housing solutions proposed by the PSP to reset the public housing system, property prices would come crumbling down, explained MP Sitoh.

Such a scenario would be catastrophic as millions of Singaporeans would see the value of their assets evaporate overnight.

Imagine buying a flat at S$500,000, only for it to be worth a quarter of the price you paid because of an irresponsible policy. Would that not generate a whole new set of problems and social issues?

Concluding his speech, MP Sitoh reaffirmed that the housing system in Singapore is definitely not broken.

“I think our housing system has delivered many benefits to Singaporeans. And we’ll continue to do so.”

Murali Pillai: We do not forsake the future for the present

Since the 1960s, the PAP Government has assiduously invested in public housing programmes, building affordable and high-quality public housing estates, shared Bukit Batok SMC MP Murali Pillai,

“At the same time, the investments and policies are carefully calibrated to ensure that the interests of the future generation of Singaporeans are protected too.”

An example of this is the Selective En-bloc Redevelopment Scheme (SERS) and Voluntary Early Redevelopment Scheme (VERS) schemes, part of the Government’s efforts to renew older housing estates and tackle the lease decay problem.

In his speech, MP Murali rebuked the assumption made by NCMP Leong Mun Wai that Singaporeans are expecting VERS to be like “SERS for all” and expecting a financial windfall.

“For those who have purchased resale flats, they will know the remaining length of the leaseholds beforehand.”

Against this context, it seems unreasonable for a person who purchased a resale flat knowing full well when the leasehold expires, to expect a compensation that is substantially more than the value of the tail-end of the leasehold should they be eligible for VERS, added MP Murali.

“What he (Mr Leong) is in fact asking Singaporeans to do is to dream an impossible dream, and to ask the Government to make it come true,” concluded MP Murali.

Choosing hard truths over soft lies

Ultimately, Mr Murali said that regardless of partisan politics, he would choose hard truths over soft lies.

That is because the motion brought forth by the PSP is naive. It is aspiration without costs, and speaks as if everyone is entitled, said MP Murali.

More importantly, the housing policy in Singapore is synonymous with nation-building. It is an area that requires careful long-term planning and a Government that is willing to make difficult choices rather than yield to populist demands.

The PSP might have grand plans to lower housing prices by ignoring land costs. However, their policy shows little foresight for the future of our children and grandchildren.

As MP Murali said:

“We must resist the political temptation to pander to the voters of today who decide based on the tangible benefits which they can see and experience rather than any notions of fairness for people to people to whom they owe nothing – the citizens of tomorrow.”

Besides, he added, there is no point in making vainglorious promises without a way to deliver.

Cheryl Chan: Doing a few bold things

While the opposition isn’t frank with the trade-offs of attractive housing alternatives, it’s not stopping East Coast GRC MP Cheryl Chan from delivering some hard truths of her own.

MP Chan — also the Government Parliamentary Committees chairperson for National Development — said in her speech today (Feb 6, 2023): “If we want the Government to intervene and make resale flats more affordable for the younger generation, this simply means we may have to do a few bold things.”

Settling for less profits, living in the same property for much longer

For such a complex topic like housing, MP Chan believes that no single approach will be effective on its own.

“Any artificial intervention on the price of today’s HDB flats based on a free-market model will have significant repercussions on our social fabric and the wealth of different generations,” she said.

And thus the “few bold things” that we need to accept if we want affordable resale flats.

First bold thing: Accept that we will have less profits when we sell our flats.

Ms Chan highlighted earlier in her speech that many of her Fengshan residents are still first-generation owners and paid S$50,000 for their new flats in the 80s. Now, these flats would sell for a decent price of S$400,000 to S$500,000.

If we want the Government to intervene and make resale flats more affordable (for instance, by capping the price of resale flats), we then have to convince our parents and ourselves to settle for less profits whenever we sell our subsidised flats, said Ms Chan.

Second bold thing: Be willing to live in the same property for a much longer time and not inflate the demand on a cyclical basis.

Third bold thing: Accept a new definition of living proximity to our parents or extended family in estates that are non-mature and at distances beyond 15km from one another.

Fourth bold thing: Don’t constantly ask for more subsidies in different forms.

Focus on the fundamental

MP Chan certainly caught our attention with her “bold things”, but the reason for her hard truths was to point the House and the public towards the fundamental reason for why public housing was established since independence: to provide accessible and affordable public housing for every citizen.

Indeed, Singapore is one of the few places in the world where more than 70 per cent of the population live in public housing and 90 per cent of citizens own their homes.

“This Government and our forefathers have tried to ensure this basic objective is met and I wish this continue to be so, particularly for our low income individuals and families and those who are actually vulnerable in society.”

“This is one of our key challenges as a country and a people – how best to balance the demand for affordable and accessible housing by Singaporeans against other competing needs for land use as Singapore continues to modernise,” she concluded.

Images via: PAP, MCI/YouTube