Still in denial

Leong Sze Hian has written many pieces regarding HDB flats and policies for TOC, and part two of his report on the People’s Association Youth Movement (PAYM) policy forum @ Jurong GRC, held last Sunday, has some very interesting statistics for us to mull over. Here are some that caught my eye.

• HDB resale prices increased by 40.2 per cent in three years (2007 to 2009)
• 36,609 flats were constructed in 1998. In contrast, 10,082 flats were constructed in 2003. The numbers for the next five years, from 2004 to 2008, were 5,326, 5,673, 2,733, 5,063 and 3,154, respectively
• Even private property owners were buying HDB resale flats, which they could sell after just one year Minimum Occupation Period (MOP)
• Cash-over-valuation (COV) for 3-room flats, at $20,000 to $50,000, is generally higher than that for larger flats

These were all presented by Tommy Tan, managing partner of JATT Realty, not the HDB. All of these factors contribute significantly in driving both new and resale flat prices upwards. The demand for flats have not been met with an increasing supply and private property owners speculating (and being allowed to do so) help keep the flat prices inflated and does not help young people trying to buy a flat. All these, and other factors such as using a different model to price the flats, can be changed and controlled by adjusting policies, which HDB refuse to do because rising flat prices is not considered a policy issue.

Sze Hian also points out the errors of omission contained in the presentation by Tan Chew Ling, acting director of HDB’s estate administration and property development. The statistics she cites appear to be incomplete, and I'm being diplomatic; what it looks like is HDB either don't want to deal with it for fear of being regarded as an underperforming agency, or they don't know how to deal with it.

Sze Hian analysed the presentations very well, so I'll ask you to read the entire article here, as well as part one of his report here.