05(07): A House of Cards – Constructing a Stable Future for Singapore’s Youth

Nicholas Loh Avatar

As a youth in Singapore and an aspiring future homeowner, I am pleased to read of the additional property cooling measures announced recently. However, despite these efforts, young Singaporeans continue to grapple with the challenging prospects of homeownership. It is not uncommon to hear people in-person and on online forums lamenting that HDB should take responsibility for buying back all resale flats at reasonable prices, ensuring only minimal profits for sellers to maintain maximal affordability. While profit-making may not align with the spirit of public housing, this quixotic proposal regrettably overlooks both human monetary incentives and fundamental economic and logistical constraints.

Selling HDB flats back to the board after the minimum occupancy period presents financial and logistical challenges. With billions of dollars in annual resale flat transactions, HDB would require substantial liquid assets. Furthermore, HDB would need to expand resources, handle increased transactions, and manage flat maintenance between buyers, leading to higher taxpayer-funded costs.

Possibly a more sustainable approach is implementing a hard cap on Cash Over Valuation (COV) for HDB resale flats. Setting a maximum limit on selling prices, accounting for depreciation, lease duration, and inflation, could create a controlled market. A fixed COV cap, like SGD 75,000 (though the fixed cap is probably best determined by policymakers with access to all relevant data) would prevent unreasonable pricing for potential buyers of HDB resale flats while allowing sellers a modest profit.

Understandably, this proposal may face opposition from existing property owners. As the number of current homeowners exceeds those seeking their first flat, it is natural for voting dynamics to be considered. While the principle of “Do what is right, not what is popular” (anyone else remembers this from the blue SS textbook we had to learn from in secondary school?) has guided Singapore’s governance, navigating the complexities of the property market remains a Sisyphean task. Ultimately, striking a balance between the needs of current and prospective homeowners will be crucial in determining the future of housing policy in Singapore.

In sum, implementing a hard cap on COV may offer a balanced approach, addressing the concerns of young Singaporeans without placing undue strain on resources. I implore policymakers to consider this alternative and not neglect the dreams and aspirations of our nation’s youth.

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