Monday, July 04, 2016

Opt for smaller flats, like Hong Kong

Dear Mr. Tan
You have mentioned a few times in your blog about the wastefulness that is found in Singapore. I like to add my views.

Both Hong Kong and Singapore have the highest property prices in the world. In Hong Kong, the people live in small apartments. But in Singapore, they want to live in big apartments. Can the Singaporeans really afford to pay the high prices for big apartments? Should they be like Hong Kong people who accept smaller spaces?

Singaporeans were used to cheap HDB flats. That make them want to own bigger flats.

Although the prices are now so much more expensive, they think that property is a good investment. They do not mind paying the high price, because they can get back their investment and a profit when they sell the flats in the future.

The equation will change when the property prices stop rising. The owners will then realize that property is not an investment, but it is a cost of living. Should they continue to pay the high mortgages as a cost of living?

The day of reckoning will come. Our property prices have reached its peak. It cannot go up further. At best, it can remain stable. In the worst case, it could collapse.

When Singaporeans realize that the high property prices is a cost of living, they will look at their financial commitments differently. They will then opt for smaller flats. This is the case in Hong Kong.

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