Is there a way to stop our spiraling HDB prices?


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?

It is now the time to scrutinize and make drastic changes to reflect the original slogan of a home for every citizen. “居者有其屋”政策 English translation here.

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.

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About Gintai_昇泰

I'm a Chinese Singaporean living in the Eastern part of Singapore. I tweet on current affairs & inspirational quotes. I blog on issues or events if they interest me. I write for pleasure. I also write mainly for my family and friends.
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19 Responses to Is there a way to stop our spiraling HDB prices?

  1. agongkia says:

    Malaysia Boleh.Everything good. Good scenery,cheap makan, convenient parking…and gentle………I love Malaysia.Muahh…

  2. Lala says:

    A government who wishes to profit from her citizens would never accept your suggestions.

    The rise in market price – by allowing resale in open market gives then an excuse to raise the selling price and call it a subsidy- yet profiting.

  3. theonion says:


    The poorer locals is further segregated into bumiputra and non-bumiputra.

    If you find it so great, would be happy for you to try the silver hair scheme in Malaysia for foreigners.

    I know many local Singaporeans who enjoy the commute on the second link who also take advantage of the currency difference.

    However, do take note, he enjoys only because he is willing to take the commute and the hassle to enjoy the currency difference. if not he has to stomach higher inflation and price gaps using local income and local Malaysian currencies.

    The only things really cheap there now comparing city to city is cars (local cars) for those near city areas housing, prices have also escalated.

    The poor people homes are likewise are able to resale at higher prices.

    So unless you want to revert back to a planned economy, it will be difficult.

    Anyway, when the next crisis hits, lets see what happens and looking forward to cries of cheap cheap.

  4. Pingback: Daily SG: 16 May 2012 « The Singapore Daily

  5. greedysingaporean says:

    Singaporeans won’t agree to a cap on the resale price. You know why? Coz they are mostly greedy bastards.

  6. greedysingaporean says:

    Only buyers are complaining. I haven’t seen a single seller complain about rising prices. So how?

  7. asgporen says:

    When the next crisis hits, lets see what happens – dread thinking of the consequences of the dead weight of high housing loans, interest repayment and loss of emloyment.

  8. Will says:

    What about having foreigners purchase only new properties and can only sell to locals, like in Australia. That would prevent a speculative element. Too bad, we have a government who cannot adopt good policies from other countries. Think MTR n public transport (HK) and we could have avoided a lot of problems we have now.

  9. GreedySingaporean,
    You got it wrong. If u read carefully, it has got nothing to do with current resale market. There is nothing we can do about the current situation. I’m referring to future sale of HDB flats at subsidized cost to first timer citizens. Those who buy under this scheme cannot trade their flats in the open market to make profits. It’s meant for them and children to live. If they must sell then sell at its original price back to HDB or another in the open market at its original purchase price. Let this run parallel along the current existing system. Public flats are meant for citizens to live. Not to speculate and make profits. If you want to speculate on property, pls do it on private property market not on govt subsidized housing.

  10. Tea-Party Member says:

    If they had done that, everyone will have huge retirement funds,which the government would have to return when they turn 55 and then what would happen to the government investment firms.

  11. Hum Yee says:

    I tell you what. Why don’t you just have a law that stop foreigner from buy HDB completely, period. And please don’t stop there… all foreigner must pay 50% income tax. Song bo? Idiots!

  12. Not only will the government not accept, many HDB owners will also not accept. The “market” for HDB benefits too many folks out there. That’s why you have folks panicking when they are warned that the value of their HDB will drop if certain people are elected into Parliament.

  13. Din says:

    The “geniuses” in govt have no idea how to develop a costing/pricing formula based on your model. Simple as that. Do they impute land costs for HDB homes or not? If it’s to be imputed, there’s no benchmark or market level or anything (just pluck figure from thin air?) If it’s not imputed or included, then “we will be raiding our reserves” when current govt desperately needs to build more reserves!! And also how to answer for all the highly inflated HDB prices all these past decades (S’pore will be in anarchy/turmoil/up in arms, cannot even call in army to restore order as citizen soldiers will be in revolt too)….VERY VERY VERY RISKY! WILL BE OUT OF POWER ALTOGETHER!

  14. Toothfully,
    The status quo of the current situation will remain. The buying and selling of flats will contd. I’m referring to low income citizens who are first time buyers. Say if HDB sell a 4 room flat at $200K to a young local couple with low income in one of the ulu place, they are not allowed to sell it to make profits. They can only sell it back to HDB if they plan to upgrade or shift house. Their children could also take over. It solves the housing problem for low income citizens.
    As for the rest of us including PRs they can still buy in the open market. There is plenty of flats in whatever locations you may choose. This is the principle I am talking about. This is the way to ensure future generations of citizens a roof over their head at this current runaway HDB prices. Soon lots of locals won’t be able to buy a comfortable flat to live.

  15. agongkia says:

    I am sad whenever one talk about HDB flats.This HDB flats have cause many people their savings,their future,even their lives and is very unproductive .
    Citizen work till they die yet still dun realise that its just a less than hundred years old lease.
    Citizen end their life because of being indebted to HDB.
    And flats are there any time for those who wish to end their life.STOP STOP STOP.

    3 and a half hours ago,a lady ,I believe, to be in her 40s ,was found dead on the ground besides a flat in Chai Chee.I am sad NOT BECAUSE she is a lady but because a life is gone.
    Instead of spending time and debate of the value of the flats,I would prefer one to think on how to help to reduce the cases of suicide or falling from flat and treasure every life.
    After being sad till this hour,I am still sad,enough is enough.I suddenly think of a simple solution.

    HDB should stop building the usual type of flats.
    Future flats should be like the pyramid.
    The richest stay at the top floor and higher floor and the not so well to do like me stay at the lowest floor.Those staying at the lowest floor pay only a token sum and those rich familee who stay the highest SHALL pay the highest price.Do away with private housing.

    Rich familee got money no suicide .Poor family pay lower flat price so never think of suicide and even want to jump,oso got no access to higher floor for suicide.
    Help to preserve nature,stop cutting down tress,help to save lives.Stop building flats.
    Please value our life. Please help to save life.May all live happily.

  16. patriot says:

    Agongkia seemed saddened by a suicide case.
    Do bear in mind that Sg is reported to be one
    land with the highest rate in suicide.

    Somehow, me has the unfortunate encounters
    with some Sinkies that the unproductive and
    lesser beans are better off dead. How we have
    such Hitler liked elites in our midst is really scary.
    These sinful minds should be afflicted
    with incurable diseases and see how they want
    to be seen and treated by others.


  17. Saycheese says:

    The miws’ asset enhancement is here to stay. Our swfs need the budget surplus to replenish their coffers. You will work your whole life to pay off the mortgage and when you retire, your hdb flat is worth so much that you can cash in and retire to Batam or JB and free up the space for productive and talented migrants to boost the GDP. You can don’t encash your hdb flat and hope to live on the monthly pittance from your CPF, supplemented with your cardboard collections, if there is no inflation. 60.1% are happy with this arrangement and you will have to learn to love it or get those suckers who pay themselves $$$millions with your money, out.

  18. Malaysia Boleh says:

    Gintai, great feedback from your colleague on how Malaysia handles this. The problem I believe stems from our govt’s mindset of always thinking we are “world class, best in everything we do”. With this mentality, it becomes very difficult for them to even copy good ideas from others, much less from Malaysia. In fact there are other areas where Malaysia is doing better than us eg their EPF is generating 6% interest for members, vs only 2.5% from CPF. There is much we can learn from Malaysia and others 1

  19. Bro, I think the difference is msia has lots of land and they keep poking and giving birth. So they can build cheaper housing as long as it is not in KL central. Their population growth also healthy and steady not like us suddenly import so many causing prices to escalate.

    My relatives in KL drive more than an hour everyday to get to work because houses near CBD is very expensive. Other msian relatives in small towns like yong peng houses is super cheap or super big. Cheers.

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