Many people have written about the high cost of HDB flats under the DBSS, BTO and EC schemes. The problem has become so large that even the Minister, Khaw Boon Wan, is having sleepless nights. The main culprit, in my view, is the use of tendering for the price of land.
To make HDB flats affordable, we have to get away from using tender to fix the market price of land. It is better to adopt a different measurement, such as the valuation that is used to determine property tax. It is market linked, but does not push the prices to the extreme. If we price land using a more conservative approach, and allow a big supply of land to be made available on tap, it will moderate the increase in prices.
I will write more about this matter, and cover a few related issues, within the next few days.
To make HDB flats affordable, we have to get away from using tender to fix the market price of land. It is better to adopt a different measurement, such as the valuation that is used to determine property tax. It is market linked, but does not push the prices to the extreme. If we price land using a more conservative approach, and allow a big supply of land to be made available on tap, it will moderate the increase in prices.
I will write more about this matter, and cover a few related issues, within the next few days.
4 comments:
http://newnation.sg/2011/07/bye-bye-tan-kin-lian/
Can the government afford NOT to allow price of houses to rise, when most pay for their houses with CPF ( retirement ) money?
For people to retain their retirement fund's value, the houses need to appreciate in price by CPF interest rate + inflation rate.
To ensure HDB flats affordable, the prices for new HDB flats should be pegged to the median income. For example, prices for new 3-room flats could be between 5 to 7 years of median income depending on the location of the flats.
The above formula is simple, easy to understand and transparent.
We have always credited the HDB for being so successful in housing the people, an achievement that other foreign countries envy.
But gradually they veer itself from its original noble goal, now making an HDB flat as a commodity asset just like other commodities, and even used as a political tool, leading to the absurdity of runaway
prices.
Guess the COV payable to the HDB house owner is a form of Ang Pow, except the discretion of the amount demanded lies in the hands of the all powerful owner. And it is outside the jurisdication of the stamp duty payable, so the new owner do not have to pay so much duty. But would the COV be subjected to Income tax also? If not, then it must be considered as Capital Gains for the seller.
Also the COV could be subjected to abuse on both sides, the buyer asking the seller to put down a much lower selling price to save stamp duty costs, in exchange for paying a slightly higher COV.
Correct me if I'm wrong, as I've never bought a HDB flat in my life at all. Never hear of COV in the 60s, 70s and 80s. When was it implemented?
Born very curious by nature.
Imagine, I demand a COV also on my private property
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