The Panthenon Investment Group

There is so much noise, misinformation and disinformation during this upcoming election by the opposition parties, especially PSP………. their solution will leave Singaporeans old and poor later on!

I can speak directly about HDB as I am a beneficiary of the entire system.  Since the change from SIT to HDB, our government has continuously improved the policies revolving around HDB through the decades.  Please bear in mind that as a Singaporean, we have been given the privilege and I dare say the right bestowed by HDB to be able to buy direct from HDB, that is, buy BTO twice in our lifetime.

78% of our population lives in and owns HDB, so our government is clearly very focused on the asset wealth of Singaporeans.  I will also address the 99 years leasehold status of HDB, which by the name is no different from a 99 years leasehold condominium or 99 years leasehold landed property, however, HDB has a major safety net built in.

Singapore is a matured and developed country, so if you compare our public housing to any other similar matured and developed country, HDB public housing has been a miracle for Singaporeans.

Let’s address two misinformation from the opposition parties (especially PSP); firstly, BTO prices are out of reach for Singaporeans and no longer affordable and secondly, the secondary market for HDB flats at over a million dollars is beyond the reach of Singaporeans.

About 83% of Singaporeans are employees working in the workforce, which means all of them report income and pay taxes.  Think for a moment, our government has all the data of the working population and is in the best position to formulate pricing model for HDB that is equitable and reflects the rising incomes of Singaporeans.

Most fresh graduates today have a starting salary of S$3,500/- per month and within the next 3 years to 5 years, will see their incomes rise to the range of S$5,000/- to S$8,000/- per month.  Remember, our government has all the data, so it is reasonable to conclude that our government would be in the best position to formulate the pricing model of HDB flats relative to the salaries of Singaporeans at an affordable and equitable level.  Why do you think the combined income ceiling limit to buy BTO has been raised numerous times starting from S$8,000 to S$10,000 to the current S$14,000, it is because Singaporeans are now earning more, and our government does not wish to cut them out of buying a BTO if they so wish to.  In fact, there is talk that their combined income ceiling could be raised to S$16,000 per month.

An interesting phenomenon that has happened since the 70s till now, I don’t know whether it is by design or by circumstances however, we must be thankful to HDB and our government.  What is it?  Notice that since the 70s till now, any Singaporean who bought a BTO, after the MOP (minimum occupation period), most who sell their HDB in the secondary market 5 years to 10 years later will enjoy capital appreciation anywhere from 50% to 100%.

What does that mean to Singaporeans, all their hard work has paid off in seeing their HDB homes appreciate in value.  In fact, quite a number of Singaporeans, if they have done well in their corporate careers, will take the opportunity to capitalize on the capital appreciation and upgrade into a condominium or landed property.  This has been happening for the past 3 decades it not more.  Best, it is still true today!  So, in fact, the government has a HDB policy that helps all young Singaporeans upgrade if they wish to, which government will do that for you?

Eventually, when we start to grey, we can monetize our private property and then apply the BTO a second time to right size in our old age.  We will then have our own savings, CPF savings and capital appreciation from the private property to see us through our old age without being a burden to our children, our government, our society and our country………..how wonderful!!!

HDB prices for 4 room flats range from S$350,000 to S$800,000 from outlying areas to prime areas, no different from condominiums and landed properties comparing prices from outlying areas to prime areas.  There must be differentiation in pricing and values to reflect the better and prime locations.  HDB ensures that there is a variety of choices for young Singaporeans depending on their income levels.  Of course, one cannot be unrealistic and say, I am a low wage earner, but I want to buy into a prime BTO and HDB is making it unaffordable for me to do so.  Why not use the same analogy and say, I am an average execute earning average middle income salary, but I want to buy a good class bungalow, and our government must make it affordable for me to do so.  Where is the logic in all that???  However, the opposition is saying that, that BTO prices should be low and the same whichever location in Singapore……. totally senseless!

The HDB resale market needs to be healthy for capital appreciation to be able to continue, I like the fact that HDB and the government enacted a curfew policy preventing private property owners from buying into the resale market immediately after they have sold off their property.  The 18-month curfew has contributed to a cooling effect and has stabilized the HDB resale market.

Also, let’s remember that the HDB resale market is supported by majority Singaporeans who are upgrading, therefore it shows that income levels are rising through time, and Singaporeans can bid for higher HDB resale prices.  Is that bad, of course not, it is healthy, and it is a reflection of a healthy and strong economy that allows Singaporeans to have higher incomes.

PSP proposed excluding land cost into the prices of BTO only to be added in, if the HDB owners wish to sell later.  This will destroy the HDB resale market, destroy Singaporeans potential nest egg and eliminate capital appreciation.  Simple, add the prevailing land cost then, add the accrued interest on CPF based on the principal CPF used in the purchase and in the mortgage of the HDB flat………and hold and behold, we are in negative equity!!!  At that time, elderly Singaporeans will be screaming bloody murder as they will not have any nest egg left!

Let’s talk about 99 years leasehold status.  Besides, HDB, there are also condominiums and landed properties that are 99 years leasehold, the difference is that with HDB and our government, there is a renewal policy, there isn’t in the private leasehold property market.  If you own a 99 year leasehold private condominium, at the end of the 99 years, the land is returned to the landlord/property developer.  The landlord/developer owes you no obligation to make you whole.  In the case of HDB, our government has put in place a renewal policy to offer old HDB flat owners to buy new HDB flats at a discount and sell the old flat back to the government.  Which government of a matured and developed country anywhere else in the world would offer this policy???

I wish the opposition parties will come up with more credible ideas, suggestions and policies rather than proposing ideas that will destroy the capital appreciation in the HDB resale marketplace, ideas that will deplete our reserves simply because we have reserves.

Our government is helping the bottom 20% in society, however, the bottom 20% also need to help themselves.  Education and skills are your power, for Singaporeans who are unskilled, please go get skilled, for Singaporeans who want a paper qualification, please go get it.  No one is stopping you, except yourselves.  Get it and claim a better quality of life for yourself and your family.  Let’s not forget, Singapore is a matured and developed country, therefore, there is no place for the unskilled and lowly educated, just like it is the same in any matured and developed country in the world.

For the rest of us who form the thick middle class, let’s continue to fight the good fight to claim what is ours with hard work, work smart, be productive and contribute to Singapore.