THEME: Housing: My Flat, My Home

In the 1970s', a 3-room HDB flat in Singapore costs much less than $20,000 and buyers could pay up their mortgage in 10 years. They could also afford to buy a car. 

Today, depending on location, a 3-room flat costs more than S$ 300,000. That is a whopping 15 times more and buyers are paying off their mortgages over 25-30 years because their incomes have not risen that dramatically. And with COE prices in the tens of thousands of dollars, owning a car may mean struggling to pay for it over 10 years.

There are re-sale HDB flats that have crossed the million dollar mark. Owners of public flats which they bought in the 1970s' may rejoice over the fact that the prices of their flats have appreciated astronomically in value, especially during the era of the state's "asset enhancement" policy in the 1990s. However, if they wish to realise their capital gains by selling their flats, they may have difficulty even buying a smaller flat because the prices of all other flats, big and small, have also appreciated astronomically.

It is a sad state of affairs that the prices of public flats can go beyond the reach of many first-time flat owners. Many of them are young couples waiting to settle down. They have inherited the tradition set by our first generation HDB flat owners of getting a flat first before getting married. Without a flat, their plans to have children are also delayed. And those who bought their highly priced flats are facing a lifetime of mortgage repayments with two sets of income.

The costs of public housing has become a hot button issue for a country that began independence 50 years ago with a sacred mission by the leaders to build as many low-cost housing units as possible. Nowadays, HDB's housing policy seems no longer targeted at providing home ownership to low income families. Although public housing still falls within the purview of HDB, there are specially built flats and executive flats. And private developers are tendering land from HDB to build flats which are priced commercially.

How should we be looking at our public housing problems and what can be done about them? I will discuss this in my next blog.