Friday, April 09, 2010

Various categories of public housing

Our HDB flats have become expensive and is now a burden for many young people to start their first home.

To solve this problem, I have suggested that a new category of HDB housing be offered based on cost of the flat. This could bring down the price by 30% to 50%. The resale value of this new category will be based on the cost of a new flat (which will increase with inflation) less depreciation of the flat.

I believe that it is possible to have the various categories of HDB flats to co-exist side by side. Right now, we have HDB and executive apartments. What is wrong with a third category, with different conditions?

Some people may choose to pay more for the "market based" HDB flats. Other people may prefer to pay less for the "cost plus" HDB flats. Give them a choice. From my survey, the demand for "cost plus" flat is likely to be higher than "market based". It does not matter how the final choice will turn out. It is good to offer the choice.

Tan Kin Lian


Anonymous said...

One side effect of this concept could be more pple will buy these cost-plus flats. They will then have more money to invest in private properties, pushing up the private ppties prices further, creating a bigger bubble in the private ppties mkt.

Anonymous said...

1 problem will lead to another. how do we deal with the excess liquidity than?

Anonymous said...

To Anonymous @ 10:31am,

I disagree with you on your point about pushing up the private property prices further.

I think we need to differentiate the purpose of public housing and private housing. Government has no obligation to ensure private property price remain affordable to citizen but it has to make sure that the price of public housing is affordable to the majority of the citizen.


C H Yak said...

To : Anon. 10:31 AM

I think it can work if the "market" is segregated into 2.

Those who buy from HDB based on cost-plus only transact only with HDB and are not allowed to buy private properties.

Those who transact in open market at their own risks are allowed to buy private properties.

The first sale of HDB property should be strictly controlled at cost-plus.

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