WP’s plan leaves home owners vulnerable

Dear Straits Times,

I refer to the 21 Apr 2011 letter by Mdm Shirley Chng.

On behalf of 85% Singaporeans who own HDB flats, Mdm Chng cautions against pegging new flat prices to median income.

She says it might seriously affect those who are forced to sell their flats for which they paid a lot. She is right; we should consider the plight of any such persons. But Mdm Chng should not forget that if prices hadn’t shot up in the first place, there would have been no cause for worry about it plunging next. In other words, Mdm Chng should show concern when prices first shoot up, not when prices are already so high.

Mdm Chng should also realise that the situation is not unlike that of someone who has paid $50 for a bowl of noodles and she in turn is asking everyone else to also pay $50 for their noodles. Does Mdm Chng not know who gets the last laugh? It is the noodle seller because he ends up making tons of money. In the context of property, the government is the sole supplier of public housing and the near monopoly supplier of land. When property prices go sky high, it is the government that has the last laugh.

Mdm Chng says that the only group we should be concerned with are first time buyers with no existing flats. On that basis, she concludes that lowering HDB prices across the board is unwarranted. Mdm Chng seems to think that first time buyers with no existing flats form only the minority. She is wrong. Sky high property prices will not only affect first time buyers now but will also affect all future first time buyers. That includes all of Mdm Chng’s children, grandchildren, nephews, nieces, grand nephews, grand nieces and so on. What Mdm Chng’s generation enjoys her children and her children’s children will end up paying for.

Mdm Chng urges for the protection of 85% of existing HDB owners as though all 85% can sell their flats now to reap the gains. Where are the 85% going to find another 85% Singaporeans to sell their flats to? At any one time, only a small minority of the 85% can sell their flats to reap profits. Whatever this small minority is is equal to the actual number of buyers. Since at any point in time, the actual number of sellers is equal to the actual number of buyers, there is no basis to favour the former over the latter group.

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One Response to “WP’s plan leaves home owners vulnerable”

  1. ymac Says:

    Syndrome (The Incredibles- Pixar movie) said: When everybody’s a Super, nobody’s Super!

    So when everybody’s HDB flat is devalued, nobody is in devaluation!

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