Yesterday, during my driving break at Jurong station, I had a very informative chat with Train Officer Reeza. He is attached to Jurong Crew. Train Officer Reeza commutes on his Singapore registered motorcycle daily from Johore Bahru to work here.
Train Officer Reeza is a Singapore permanent resident (PR) working here. He is married and live with his family in Angsana, Johore Bahru. They live in a semi detached, double storey house with 4 bedrooms. It’s easily more than 3,000 sq ft which is more than three times the size of our typical 4 room flat. His house is freehold with a big compound.
Train Officer Reeza told me that he pays only about RM10 for water and RM60 for electricity per month. There is air con in all the bedrooms.
TO Reeza just joined us few years ago. His pay is only about $1,400. PRs, work permit holders or locals enjoy the same pay and benefits here.
Having worked in Singapore for many years before joining us, TO Reeza is aware of our crazy HDB flat prices and its associated rumblings from Singaporeans.
When I asked about housing matters for the low income in Malaysia, TO Reeza gave me an insight overview of the situation.
I note that TO Reeza is a matured and knowledgeable person well versed with current affairs on both sides of the causeway. He commented that it’s really too expensive here. This place is only good for making good money but can’t really live comfortably here in the long run!
Generally, there is a very basic affordable housing policy for the low income in the whole of West Malaysia ranging from ‘low cost’, ‘low medium cost’ and ‘medium cost’ for citizens. For low income i.e. earning below RM1,000 a month, the local citizen is entitled to buy a 2 bedroom freehold terrace house at only RM22,500! In case you wondering, it’s no typo error here.
If your income is higher than RM1,000 a month, then you pay slightly more under the ‘low medium cost’ or ‘medium cost’ schemes. TO Reeza’s income cannot be considered for any of the low cost housing schemes. He had to buy his semi detached house at RM240,000. If you convert it to Sing dollar, it’s only $100,000.
Another interesting feature of West Malaysia housing policy is that most of the low income houses are built by private developers. All private developers given parcels of land to build houses are obliged to set a side 20% to 30% of the land to build low cost houses for the poorer citizens.
Those low cost houses bought by local citizens cannot be sold at higher prices. No matter how long they occupy their houses, if they intend to sell to upgrade or shift elsewhere, they can only sell at its original price of RM22,500. The price will always stay at RM22,500.
It’s naive to expect our tiny Singapore with so much land constrain to enjoy the same luxury of cheap housing. But then I feel that we could really learn something from them.
For example, our HDB flats for first timers should be based on costs and not market prices. The price of the HDB flats just like in Malaysia should be fixed if it’s sold back to the HDB or in the open market. This is a good policy. It ensures that every citizen will have a flat. It discourages speculation and profit making. If HDB flat cannot be traded in the open market, it will not keep rising until it hits the roof.
I’m referring to those low income citizens just looking for a roof with no frills housing. For those existing HDB owners, they could continue as per normal. If you insist that you want a certain location and type of flat, then you could get it in the resale market.
The fact is that prices of HDB flats keep on ever rising. There must come a time it either has to stop or the housing bubble will burst. It just can’t be ever rising every year with no ending.
In fact, if only from Day01, HDB flats are banned from open trading, much of our housing problem could have been solved. Every citizen in this country is entitled to a flat based on his income and affordability. If it’s sold due to upgrading or whatever reasons, the price shall remain the same either by selling back to the HDB or to another buyer in the open market.
Allow only the private condominium flats or houses to be traded in the open market excluding HDB cost subsidised flats. If PRs intend to buy HDB flats, the same principle should apply except that they need to pay higher than citizens. If they could afford and got the cash, they should be getting their flat from the private developers in the free market.
HDB must first change it’s ‘money making’ mindset that flat prices must be based on costs and not based market prices with grants or subsidies thrown in. Give every citizen a no frills basic flat at cost price. This flat shall not be traded at a profit. The original price of the flat still remains even if it’s sold back to HDB or in the open market. This is to ensure that every citizen has a home and a stake in this country. This also encourages more early marriages and procreation which may indirectly solve our falling birth rates.
Just look at Malaysia’s housing policy. They have done it without their housing prices reaching ridiculously crazy height. Why can’t we just follow this principle? We can’t reverse or impose this policy on existing flat owners. But we can implement it on new first time flat buyers.
We need to address this housing bubble before it goes bust resulting in serious dire consequences. As it is HDB resale prices in choice locations may hit a million very soon. Is this what we want for our HDB public flats? Do we want those crazy HDB prices and it’s associated headache?
Solving our ever spiraling prices of public flats is never easy but we need to take unprecedented and hitherto unheard of measures to ensure that every citizen has a roof without paying 30 years to bankrupt his retirement savings. Our housing policy really need a complete overhaul to address and correct its runaway prices.