Everything Also Complain

From ‘Khaw eases fears over $1m flat price’, 9 Sept 2012, article by Rachel Chang, Sunday Times.

News of a Housing Board flat being sold for a record $1 million may be swirling, but National Development Minister Khaw Boon Wan urged Singaporeans not to be “traumatised”. There will always be “units with fantastic views that fetch fantastic prices“, he said of the sale of the executive maisonette in Queenstown, which is still in the works. The price includes a cash over valuation (COV) of $195,000.

“More important is the larger picture,” Mr Khaw said at a dialogue with Sembawang grassroots leaders. “Are prices affordable generally for most units? I think we have largely achieved that in the last few months with the pricing of the new Build-to-Order flats.”

At the same time, he noted that the record resale price was indicative of the fact that “in public housing, we can get very good living conditions“. For example, when the Pinnacle@Duxton flats come onto the resale market in a few years, “there will be many millionaires there”, he noted.

In 2010, a couple of property experts made the following prediction about HDB pricing, when quizzed about the chances of it exceeding the million dollar mark.

(Eric Cheng, ECG Property): ‘Generally, most HDB flats will not go beyond $750,000. I doubt any flats will cross the $1 million mark, at least not for the next two to three years…For $1 million, one can buy a condo unit, or even a small landed property in the Sin Ming area. The valuation for a top-end HDB flat is around $700,000, and who can cough up the $200,000 (COV)?’

(Albert Li, C&H Realty): ‘I think the $1 million mark will take a while to reach. HDB prices may rise, but not so fast.

The above was in response to a Bishan maisonette with roof terrace being sold for a ‘staggering’ $950,ooo to a Singaporean businessman. In the space of 2 years, that record looks set to be broken, the culmination of a series of record sales of public housing that the latest $1 million price tag wouldn’t strike anyone as ‘traumatising’ anymore. Khaw, of course, has a flair for justifying ridiculously priced items, whether it’s Brompton bicycles or designer chairs. Someone could mark up bottled water to $10 and he could explain it away using such high-horse Khaw-conomics. Here, the ‘fantastic’ view, and the breeding of HDB millionaires are in his opinion ‘value for money’ reasons. No wonder Prince William and Kate are paying Queenstown a visit. Residents there can relate to royalty like no other heartlander can. After all, some of them live in ‘very good living conditions’. Fit for a queen, I might add.

Here’s a quick look at astounding 5-room HDB sales over the past few years to explain why our jaws aren’t dropping anymore. If there’s anything that needs to be tranquilised it’s this spell of spiralling prices.

5 room/executive flats

June 2007 – Jalan Membina,  5 room, $675,000, buyer unknown.

June 2007 – Kim Tian Place, 29th floor, $720,000, buyer unknown.

Nov 2007 – Marine Parade, sea view, 18th floor, $730,000, buyer unknown.

Jan 2008 – Queenstown, Mei Ling street, 21st floor, $890, 000, buyer unknown.

April 2010: Bishan maisonette, 24th floor, $900,000, to an Indian Singaporean couple.

Sept 2012: Queenstown, Mei Ling Street, a possible $1 million, buyer unknown.

So in the space of 5 years, top-dollar flats have increased in value by almost half a million dollars. But it’s not just these penthouse wannabes that are getting pricier, they are epicentres sending ripples of escalating prices throughout the neighbourhood. The median resale price of Queenstown flats is currently half a million dollars, something beyond most first-time buyers. Khaw is busy ignoring the ‘halo’ effect of ridiculously expensive housing, while acting like he has one hovering above his head.

Even 4 room flats are catching the fever:

4 room flats:

Nov 2009 – Queenstown, Strathmore Ave, 4 room, 40th floor, sold for $653,000, to an Indonesian PR and Singaporean woman.

March 2010: Bras Basah 4 room flat, 25th floor, in Bain Street sold for $650,000 to a Taiwanese PR couple.

But wait, there’s more. In 2010, a TWO ROOM flat in Chinatown was sold for $245,000, which cost more than a Punggol 4 room flat at the time. We wouldn’t bat an eyelid anymore if the same 2-room can hit the half million mark by the end of this decade. The exceptionally lucky few would benefit from such skyrocketing prices, while the rest of us still staying in Khaw’s majority of ‘affordable’ housing away from these hot districts watch our dreams of upgrading slowly fade away while prices swing wildly beyond our reach and PR tycoons snap up these spots like nobody’s business.

No I’m not traumatised at all, but perhaps the next generation of Singaporeans would, when they realise that while their peers have become instant millionaires overnight from selling the million-dollar flat they inherited from their parents to snap up  condos or landed property, they’re struggling to cope with the mortgage for their 2-room broom closet, which could very well cost as much as a 4-room in Ang Mo Kio today. It would also be a terrible time to get married and settle down, and if the government is serious about promoting family and babies, they should staunch this bloodletting right away, before this becomes not so much property boom as a national DOOM. Maybe a ‘national conversation’ is not as important as PAP’s ministries actually talking to each other for change. Yes, MND (Khaw) and MSF (Chan Chun Sing), I’m referring to you guys. Go cycling together and make friends or something.

Filed under: 2010, 2012, HDB, Money, Politicians Tagged: | HDB, Khaw Boon Wan, Money, Politicians