No money no house

In these Elections, the PAP has warned (actually, I was thinking of using the word 'threatened') that the value of Singaporean's properties, which mostly refers to their houses, will likely fall if the Opposition Parties were to win in their constituencies. The latest came from none other than SM Lee Kuan Yew, with (surprise?) Mr Mah Bow Tan, the Housing Minister (formally the Minister of National Development), sitting beside him. Earlier on, Mr Mah had criticised the Workers' Party for proposing that public housing prices not be pegged to the resale market prices, but instead to the median income of Singaporeans. He warned that doing so will cause property prices to fall and thereby possibly wipe out a substantial value of every Singaporean's house. Well, I won't go into the arguments which have swung back and forth and will probably still be debated long after the Elections.

My point is so what if the valuations dropped? The increased values of our houses are first of all, unrealized gains. What good is it to be told that my house is worth $900K when the house that I need to replace it with, should I want to cash out, will probably cost me $900K, if not more? So what real gains are there, really? How much more wealthy have we become with all the touted asset enhancements brought to the people by the PAP government?  Now I would admit that this is true for the older generation, those that bought their HDB apartments relatively cheap, direct from the government. They probably paid $120K to $180K, or thereabouts, for a 4 or 5 room apartment back in the 1980s and early 1990s, but have since then made a real pile of money as the values of their properties have increased 3 or 4-fold. Well, the younger Singaporeans among us have found that this is no longer true. They have to pay through their noses nowadays for their first HDB apartment, and more if they have to settle for a resale one. And part of the reason is that the government had decided to price public housing according to market rates. So the Workers' Party does have a point. The disappointment is that the PAP cannot see the point, or at least is pretending not to. A climb-down now during these Elections will cause a lost of face, if not votes.

I admit that I am one of those who benefited from the relatively cheap housing in the early 1990s, and I voted for them in every election. But you know, I don't gain any more benefit from the rising value of my house today. On the other hand, the increased (and increasing) valuation of my property only attracts higher property tax. The real beneficiary of asset enhancements is the government. So, tell me, Mr Mah, how has PAP's recent housing policies really benefited me and the many property-owning Singaporeans?

See also Mr Wang Says So