A struggle to find the ‘sweet spot’, says Mah

Dear Mr Mah,

I refer to the 4 Mar 2011 Straits Times report – A struggle to find the ‘sweet spot’, says Mah.

You said it is not without good reason that you struggle to find the sweet spot for housing supply. Your good reason is the housing volatility in 1997 which led to oversupply, high cost of holding empty flats, ghost town safety issues and negative equity for those who bought at a high price.

If your good reason is the oversupply that has happened in the past, does it mean that you don’t have what it takes to see beyond the past? If that is the case, then you do not befit the so-called forward looking leaders that MM Lee always brag about nor deserve your million dollar salary.

Furthermore, there are lessons in 1997 which you didn’t learn properly. 1997 wasn’t simply low prices and oversupply. It is a sharp spike followed by a sharp fall in prices. The negative equity for those who bought at high prices in 1997 is precisely due to the mistake of letting prices climb so high in the first place. In other words, to prevent prices from falling suddenly and causing some flats to go into negative equity, you must first prevent prices from rising suddenly. The exact same thing happened this time. Prices shot up very rapidly. You didn’t do anything about it other than justify that prices are right and affordable. You didn’t do anything despite repeated warnings from the people. So contrary to your claim that you were only applying the lessons of 1997, the sad truth is that you never learnt from 1997.

What high cost is there in holding empty flats? Show us the costs please. How do they compare with the extra $150,000 each new buyer has to pay now? Show us the crime statistics of those so-called ghost towns. Are they significantly higher than the rest of the country?

The fact that there are always flats left unsold every year in the past decade shows that something needs to be done that continues to be left undone. If second floor units continue to be unpopular, how about making them two-bed room or one-bed room units to make them more affordable? How about making second floor units available to singles? How about converting second floor units to shops? Please, you are paid millions to solve problems, not give us problems.


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