Jamus Lim: HDB prices a ‘recurring pain point’ for many, especially younger Singaporeans

SINGAPORE: A topic that a number of Sengkang residents have brought up with Workers’ Party MP Jamus Lim is the affordability of public housing, he wrote in a Facebook post on Tuesday (May 21).

He characterized the price of HDB flats as a “recurring pain point,” adding that Sengkang has not been spared, with reports that it has joined the list of towns with flats costing over a million dollars.

Assoc Prof Lim acknowledged that these are exceptions but added that “they do more than color perceptions of rising costs of living. They are, rather, symptomatic of deeper concerns Singaporeans have about the affordability of our homes.”

The issue of affordable housing has been debated in Parliament as recently as last year, and the Sengkang MP outlined the difference in the government’s stance versus that of the Workers’ Party.

While the government has said that salaries have gone up at a comparable pace to home prices “once grants for BTOs are taken into account,” the WP claims that public housing is increasingly unaffordable and that younger Singaporeans would find it more difficult to buy homes for themselves.

“What explains this difference? If one looks at the house price-to-household income (HPIR) ratio—a pretty standard metric of affordability—Singapore’s hovers around 4 (it has risen somewhat in recent times, but it’s in the ballpark).

But why we differ in our beliefs about affordability is important to understand,” added the MP, who reaches Economics at ESSEC Business School.

He further noted that should the Demographia Index of Housing Affordability be considered, Singapore’s HPIR ratio would be “severely unaffordable,” and with first-timer housing grants, merely “seriously unaffordable.”

“It’s hard to shake the reality that homes here are unaffordable; putzing around with subsidies only makes things less bad,” he added.

Assoc Prof Lim further pointed out that affording housing in Singapore nearly always means both spouses need to work, which adds to household expenses as it necessitates additional childcare.

“Unlike elsewhere, Singapore has no hinterland to move to, for those who may prefer lower housing costs at the price of greater inconvenience.

Even what some may consider to be ulu neighborhoods now boast HDB resale prices that are eye-wateringly high by global standards for large cities, which basically means little respite for those who have no choice but to live within our nation’s borders,” he wrote.

The MP also pointed out that HDB flats depreciate with time in Singapore and are practically worthless when leases end.

“For these reasons, we think that the HPIR should be closer to 3 (what the index regards as ‘affordable’”), which would go a long way toward easing the burden of starting a home.

This is especially so for many young Singaporeans, who often feel priced out of the market, right at the point of graduation.

This has implications not only for their cost of living, but also gives rise to undesirable consequences, such as postponing the age where they settle down and start a family, or how rooted they feel to their home country.” /TISG

Read also: Jamus Lim Suggests Proactive Building of HDB Flats and Explores Affordable Housing Solutions