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25-04-2011, 07:59 AM
I see the word "affordable" being abused again. Little or no cash down is an illusion because young couples are indebted probably 25-30 years of their lives.
And, HDB actually does "rent" the apartments to Singaporeans! It's on a 99-year lease and you never actually "own" the flat even after paying off the mortgage (which is getting harder and harder these days). Can he please come up with a much better argument?
Apr 25, 2011
GE 2011
New flats affordable for most buyers, says Mah
By Fiona Chan, ASSISTANT MONEY EDITOR & Robin Chan
MOST buyers of new flats need to fork out little or no cash to pay for their homes.
This is the result of the Government's efforts to keep housing affordable for young couples, National Development Minister Mah Bow Tan said yesterday.
In his latest rebuttal to the Workers' Party's (WP) proposals on lowering new flat prices, Mr Mah argued that the Government has kept housing costs within the means of most first-time buyers.
Eight in 10 couples who bought new flats last year used only a quarter or less of their salaries to service their home loans, which means their Central Provident Fund (CPF) contributions can cover almost all their monthly mortgage payments, Mr Mah said.
Speaking at a press conference at Tampines East Community Club, he illustrated how a young couple can buy a new flat with almost no cash required.
A couple below the age of 30 needs to pay only a 5 per cent down payment for a new flat. This can come out of their CPF savings.
So a couple earning a combined $4,000 a month can work for half a year and buy a new four-room HDB flat with no cash upfront, said Mr Mah.
If they are eligible for housing grants, they can also use those for the deposit.
As for the monthly mortgage payments, these would require less than $50 in cash, he added.
'With all this in place, you would get a flat with zero deposit. Now how many housing ministers in the world can say what I've just said?'
On top of that, a new HDB flat is not 'any ordinary, low-quality flat', but 'a good-quality flat, a flat in a good environment', added Mr Mah.
'Can the WP point out any other major city in the world where home ownership is so readily within reach for the majority of its young people?'
Mr Mah, representing the People's Action Party, has crossed swords with the WP at least three times since the latter unveiled its manifesto on April 9.
Among other things, the WP called for new flat prices to be lowered by reducing the price of land and rethinking the asset enhancement policies of the last 20 years.
But owning a home and seeing it grow in value as an asset is a key pillar of the public housing system, Mr Mah countered yesterday.
'My answer to them is, if homes are not an asset, why don't we just rent homes to people?' he said. 'If that's the proposal, then say so.'
Mr Mah also dismissed another suggestion, surfaced by the National Solidarity Party, that permanent residents (PRs) should have a longer minimum occupation period for HDB flats than the five-year norm for Singaporeans.
'The deck is pretty much stacked in favour of Singaporeans when it comes to buying flats,' he said.
PRs are not eligible for HDB grants or loans, cannot buy new flats direct from the HDB, and make up only a small proportion of resale flat buyers, he said.
'I think targeting the PRs isn't going to make that much difference as far as making flats affordable to first-timers,' Mr Mah added.
He also reiterated that the WP's plans to reduce the prices of new flats are 'ill-conceived and even dangerous', and run the risk of crashing the property market.
Mr Mah disagreed with WP chief Low Thia Khiang's assessment that lower new flat prices would have little impact on resale flat values. Mr Low had made this argument last week, saying that because new flats are relatively few in number and cannot be resold immediately, they will not affect the broader resale market.
But the different market segments are interlinked, Mr Mah argued, and any action in one segment will have implications for the other. This is especially so as half of the current buyers of resale flats qualify to buy new flats, he said.
In addition, Mr Mah called Mr Low 'mischievous' for alleging last week that the Government itself has been raiding the reserves by, for instance, giving out money under the Grow and Share package during this year's Budget.
'The 2011 Budget, including the Grow and Share package, was completely funded from current reserves,' Mr Mah said.
He added that the Government has never drawn on past reserves for its budget spending, except in the 2009 economic downturn, when it withdrew $4 billion to save jobs and revive the economy. The Government repaid the funds this year.
Still, despite the back-and-forth with the WP over the affordability of new HDB flats, Mr Mah believes housing will not be a make-or-break issue in the May 7 General Election.
'There are so many other issues,' he told reporters. 'I think the most important issue really is... who can form the government that can look after Singapore and secure Singapore's future.'
And, HDB actually does "rent" the apartments to Singaporeans! It's on a 99-year lease and you never actually "own" the flat even after paying off the mortgage (which is getting harder and harder these days). Can he please come up with a much better argument?
Apr 25, 2011
GE 2011
New flats affordable for most buyers, says Mah
By Fiona Chan, ASSISTANT MONEY EDITOR & Robin Chan
MOST buyers of new flats need to fork out little or no cash to pay for their homes.
This is the result of the Government's efforts to keep housing affordable for young couples, National Development Minister Mah Bow Tan said yesterday.
In his latest rebuttal to the Workers' Party's (WP) proposals on lowering new flat prices, Mr Mah argued that the Government has kept housing costs within the means of most first-time buyers.
Eight in 10 couples who bought new flats last year used only a quarter or less of their salaries to service their home loans, which means their Central Provident Fund (CPF) contributions can cover almost all their monthly mortgage payments, Mr Mah said.
Speaking at a press conference at Tampines East Community Club, he illustrated how a young couple can buy a new flat with almost no cash required.
A couple below the age of 30 needs to pay only a 5 per cent down payment for a new flat. This can come out of their CPF savings.
So a couple earning a combined $4,000 a month can work for half a year and buy a new four-room HDB flat with no cash upfront, said Mr Mah.
If they are eligible for housing grants, they can also use those for the deposit.
As for the monthly mortgage payments, these would require less than $50 in cash, he added.
'With all this in place, you would get a flat with zero deposit. Now how many housing ministers in the world can say what I've just said?'
On top of that, a new HDB flat is not 'any ordinary, low-quality flat', but 'a good-quality flat, a flat in a good environment', added Mr Mah.
'Can the WP point out any other major city in the world where home ownership is so readily within reach for the majority of its young people?'
Mr Mah, representing the People's Action Party, has crossed swords with the WP at least three times since the latter unveiled its manifesto on April 9.
Among other things, the WP called for new flat prices to be lowered by reducing the price of land and rethinking the asset enhancement policies of the last 20 years.
But owning a home and seeing it grow in value as an asset is a key pillar of the public housing system, Mr Mah countered yesterday.
'My answer to them is, if homes are not an asset, why don't we just rent homes to people?' he said. 'If that's the proposal, then say so.'
Mr Mah also dismissed another suggestion, surfaced by the National Solidarity Party, that permanent residents (PRs) should have a longer minimum occupation period for HDB flats than the five-year norm for Singaporeans.
'The deck is pretty much stacked in favour of Singaporeans when it comes to buying flats,' he said.
PRs are not eligible for HDB grants or loans, cannot buy new flats direct from the HDB, and make up only a small proportion of resale flat buyers, he said.
'I think targeting the PRs isn't going to make that much difference as far as making flats affordable to first-timers,' Mr Mah added.
He also reiterated that the WP's plans to reduce the prices of new flats are 'ill-conceived and even dangerous', and run the risk of crashing the property market.
Mr Mah disagreed with WP chief Low Thia Khiang's assessment that lower new flat prices would have little impact on resale flat values. Mr Low had made this argument last week, saying that because new flats are relatively few in number and cannot be resold immediately, they will not affect the broader resale market.
But the different market segments are interlinked, Mr Mah argued, and any action in one segment will have implications for the other. This is especially so as half of the current buyers of resale flats qualify to buy new flats, he said.
In addition, Mr Mah called Mr Low 'mischievous' for alleging last week that the Government itself has been raiding the reserves by, for instance, giving out money under the Grow and Share package during this year's Budget.
'The 2011 Budget, including the Grow and Share package, was completely funded from current reserves,' Mr Mah said.
He added that the Government has never drawn on past reserves for its budget spending, except in the 2009 economic downturn, when it withdrew $4 billion to save jobs and revive the economy. The Government repaid the funds this year.
Still, despite the back-and-forth with the WP over the affordability of new HDB flats, Mr Mah believes housing will not be a make-or-break issue in the May 7 General Election.
'There are so many other issues,' he told reporters. 'I think the most important issue really is... who can form the government that can look after Singapore and secure Singapore's future.'
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