SINGAPORE — In Parliament on Monday (Feb 6), as motions were discussed regarding public housing, Workers’ Party MP Jamus Lim argued that house prices in Singapore have become too high. “Newspaper reports that point to record highs in property prices and rents in many districts reinforce this notion that housing is unaffordable,” he added.
He noted that the “eye-watering” 30 per cent rise in private rental rates in 2022 should alarm Singaporeans, even though the majority are not renters, because higher rental rates “eventually make their way into higher house prices, and vice versa. And given our recent brush with high inflation, it should be unsurprising that house prices have likewise breached new highs,” the MP said in his speech.
The Sengkang GRC Member of Parliament noted that even some elderly residents he has spoken to who own their homes are worrying over how expensive it has gotten to buy a flat in Singapore and are particularly concerned with whether their children and grandchildren will be able to continue to afford a roof over their heads.
Assoc Prof Lim also said that most HDB homeowners utilize their Central Provident Fund (CPF) savings in financing their mortgage and noted that higher and higher home prices mean that the Government give greater grants to help people to afford to buy a flat, which raises prices even further, in a never-ending, self-reinforcing cycle.
“If one is able to offload one’s flat before its price collapses – as it must, eventually – then we can retire comfortably. But then, the one holding the bag is a fellow Singaporean, someone who bought your resale because they needed the space for a growing family and couldn’t afford to wait for a BTO.”
He argued for a bigger range of housing choices for Singaporeans, whom he pointed out are in various stages of their lives and careers.
He added there is a need for a “reboot” of house prices but acknowledged that this process could disrupt both the public and private housing markets.
“What is needed is a gentle path to this new normal so that economic growth and, especially, incomes eventually catch up and make higher prices justifiable.”
Assoc Prof Lim ended his speech on a personal note, saying that he had been a renter for at least ten years.
“I did not feel less connected to the communities where I lived, nor did I feel less pride in customizing the interior of my home to reflect who I was. I saw it, rightly, as a stage in life, and once I was ready for ownership, I made the transition. I do not see why we should not offer this opportunity to all Singaporeans, especially those who are not in the lowest percentiles of income, but who nevertheless cannot afford rentals in an open market that, as I’ve shared, has also become unmoored from affordability.”
The MP’s speech may be viewed in full here. /TISG
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