The income ceiling to buy 2 rm flats has been raised from $2000 to $5000 for the affordable HDB flats in mature estates. But the ceiling of $2000 will stay for new estates to keep them affordable for the lower incomes.
This policy change is funny in many ways. If people can afford to buy a flat with only $1000 pm income, the raising to $5000 seems to be unnecessary. And if it needs a $5000 income to be able to afford a 2 rm flat, should not the other categories of ceiling be raised proportionately to make them affordable as well?
The official reasoning is that raising the ceiling would provide those earning $5000 another option to buy down instead of being forced to buy more expensive but still affordable flats. This is a dramatic change in policy direction from the HDB. In the past or current, the policy is to make sure that the buyer will expend whatever he has in his savings or his income to buy the most expensive flats available. If he earns a bit more, force him to buy from the sharks in the private sector. And this policy has singlehandedly led to the present situation whereby many did not have much left in their savings for retirement, and a 30 year mortgage repayment that eats up their disposable income. Oops, think I make a mistake here. Someone was reported in the main media that many Singaporeans have enough savings in the CPF for retirement. Believe me, it is true.
The old thinking of doing things right may not be right in this particular case. The little change in direction may help a little in allowing people to buy what they really can afford and still with some savings and a little more disposable income to go with. To focus on doing things right, HDB may want to seriously look at the old policy of forcing people to buy more expensive but still affordable flats and extend this policy change to all the other categories of affordable HDB flats. The right way to go is to remove the ceilings and build more flats to meet the demands. Don’t interfere with the people’s income and how they should spend their money. Many would want to buy smaller and really affordable flats and save at the same time for their retirement and a little luxury with the extra cash available.
The flawed policy of not building to frustrate the people by creating a false demand is obnoxious and definitely not right. Would HDB do the right thing and do it right by going all the way instead of just stopping at 2?
And believe me, some daft Sinkies will still argue that by not putting a ceiling on the income, there will be so big a demand for smaller flats that the lower income will be deprived of their chances of buying one. And some great talents will superimpose this view, when the simple thing to do is to build what the people want. If the demand is for cheaper 3 rm or 4 rm flats, then build it for the people.
Why insist on people spending all their money to buy more expensive affordable flats, or why not follow the private developers and build 650 sq ft flat to sell at $1m? Then keep harping that the quality of life will not be affected. Can do or no can do?