Forum: Singapore’s public housing market needs a reality check
Four years ago, I wrote about public housing affordability as a first-time buyer (
A battle between prudence and emotion in buying HDB home, Dec 28, 2021).
Now, at the precipice of my flat’s Minimum Occupation Period (MOP), I am bewildered. A property portal estimates I could make $200,000 in capital gains. Even older flats have appreciated beyond inflation, despite imminent lease decay. A deluge of fliers from property agents urging home owners to upgrade may explain why.
The Government’s efforts to boost housing supply and temper prices are commendable. But beyond supply and demand, exuberant price expectations fuelled by property agents are distorting the market.
In the 1980s, my in-laws purchased a flat in Tampines for $100,000. Over time, they upgraded to private property, with most of their home ownership journey funded by capital appreciation. Today, they live mortgage-free in a condominium in East Coast _ a testament to the outsize capital gains once possible in the housing market.
But Singapore has already transited to a First World nation, and we are unlikely to see an encore performance of the economic conditions that allowed for such windfalls. Yet, property agents continue to pander to our intrinsic desire to profit from public housing.
This is partly systemic. Property agents benefit from higher prices and more transactions. Their incentives are misaligned with sustainable home ownership, yet guard rails remain weak.
Agents now go door-to-door in Build-To-Order (BTO) estates reaching MOP, pitching dreams of windfall profit. They feed the belief that housing prices can only go up, dismissive of ageing demographics, falling birth rates and economic uncertainty. They argue that limited land supply and the Government’s cooling measures guarantee resilience. They peddle a narrative that property is a haven, a wealth generator and a status symbol.
This culture worries me. I have seen peers overextend themselves chasing property dreams. One pooled family savings just to show proof of funds for a larger loan. His mortgage now consumes 60 per cent of household income. Irrational exuberance has trumped financial prudence.
We should stop sensationalising million-dollar HDB transactions and crack down on irresponsible advertising by agents who promise cash-over-valuation deals or encourage buyers to over-leverage. Such measures, alongside the new HDB Resale Flat Listing service, can promote greater transparency, lower middleman costs, and empower Singaporeans to make financially sound housing decisions.
While we cannot undo the commodification of public housing, we can curtail those who stoke unsustainable expectations. We should not wait for the next boom-bust cycle for housing prices to normalise. A soft landing requires decisive action now – before optimism turns into a crisis.
Elgenia Wong Tien Min
