It is a million-dollar question on whether our children can afford to have a roof over their heads in the future.
Party stalwarts of SDP and PSP voiced concerns about the ever-increasing property prices and how basic housing is becoming out of reach for Singaporeans and they spoke about the various solutions proposed by their respective parties at a political forum organised by SDP on Saturday 11th of February 2023.
Participants at the forum also said that they are deeply concerned that the enlarged share of the wallet for housing loan repayments has eroded both their cash and CPF savings, leaving little or nothing for their retirement needs.
The government in turn is increasing the GST to fund the various needs of our seniors. The widening of the funding gap for our retirement needs may mean that the government will have to keep increasing the taxes in one form or another to support future generations.
At the forum on Saturday, Prof Paul Tambyah echoed the sentiments of prominent economists and other opposition members that Singapore can afford to dip into our reserves to support the social and societal expenditures. He said that using the reserves is an alternative to increasing the GST.
However, the PAP has a rather narrow view that spending outside the sphere of what is already defined as “fiscally prudent” by their own definition, is profligate. And PAP takes no prisoners when it comes to debating about using our reserves and the need for protecting it at all costs for future generations. Any proposal to use our reserves is characterised as “raiding of the reserves.”
Is it two bites of the cherry or just one rotten apple?
Just one generation ago, our HDB scheme was a boon for Singaporeans and our forefathers were able to buy and sell their HDB flats for at least twice in their lives which gave them good cash surpluses with each sale.
Presently, it is purported that some home buyers who have bought HDB flats at superhigh prices are in negative equity after paying off interests for their loans and if they have bought resale flats that have shorter leases left on their properties, the repayment rates are much higher, which then erodes their savings even more. There is a growing concern that this bunch of buyers will have close to nothing left in their twilight years.
In another working paper by NUS researchers Professors Sumit Agarwal, Yi Fan, Wenlan Qian and Tien Foo Sing, at the National University of Singapore, posit that there exists a consumption friction between BTO homeowners and non BTO homeowners, where the former spend less on consumption after purchasing a HDB flat.
It may be a case that we are working a lot harder and have a lot less for ourselves after just one generation.
Wendy Low of PSP said, “at this rate the median income household would struggle to service loan repayments. The increase in GST coupled with the inflationary environment would make it even harder for Singaporeans to make ends meet.“
Defying the odds
The property prices have kept up and this is even though there has been manpower flight during the pandemic. Defying the odds, the property market has seen a significant increase in rental rates baffling analysts in Singapore. In comparison, the prices in Johor Bahru have seen a reduction of almost 50% post pandemic.
Some argue that the high property prices are a result of a strong and stable Singapore Dollar which has attracted a lot of foreign home buyers into the private property market here. And pegging the land price to market rates has the effect of the top 10% home buyers setting a new high for Singapore. It is pretty much a case of the rich defining how much the average Singaporeans should pay.
In this whole debate, one thing is for sure, we need to get both sides of the aisle to agree to one thing, that is, BTO flats are fast becoming out of reach for the average Singaporean.