The HDB now sets the price for new flats based on the market for resale flats. But, the market for resale flat is subject to temporary supply and demand factors and speculation. It is also fueled by greed and fear, and iinformation can be manipulated by property agents at the expense of the consumers.
It would be better for HDB to set the benchmark for the pricing of their flats. The prices can be set at a multipole of the annual earnings of the ordinary workers. If earnings increase, the prices can move up. If it falls, the price can stay stagnant until the earnings recover.
HDB should publish the prices of all the available flats in advance, to set the benchmark not only for new flats but also for resale flats. The prices of individual units can vary according to location, floor level, facing and distance to MRT station and amenities, but the average should price reflect the average wage level. If there is strong demand for a specific unit, the unit can be balloted.
This transparency and pricing policy will remove the fear of escalating prices. The stability of the prices, albeit reflecting the average earnings, will remove the speculation of capital owners and property agents. If there is increased demand, HDB can build more flats. In the meantime, those on the waiting list can rent their accommodation or stay with their parents.
It will be a more transparent and fairer market, and will actually reflect the true market forces.
Tan Kin Lian
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