Thursday, April 28, 2011

Mah on need to strike balance in home prices

Business Times: Thu, Apr 28
NATIONAL Development Minister Mah Bow Tan yesterday stressed that he is trying to strike a balance between first-time home buyers' concerns about housing affordability due to the recent rise in prices on the one hand, and ensuring that those who already own homes do not see the value of their homes devalued unnaturally, on the other.

'Balancing these two is a tricky business but it is something we are trying very hard to do,' Mr Mah said yesterday. He also acknowledged that housing is a 'hot-button issue' this election, at a short door-stop interview yesterday morning as he walked into Dunman Secondary School, the nomination centre for Tampines GRC.

Elaborating on this topic at a media briefing after nominations closed - with his five-member People's Action Party (PAP) team pitted against National Solidarity Party (NSP) in Tampines GRC - Mr Mah said: 'I have these two objectives - one to make sure that homes are affordable to first timers, and two at the same time to make sure that people who already own their homes do not see the value of their homes go down unnaturally. If they go up and down with the market, that's fine, but to unnaturally depress the home prices that's not something we want to see.

'Just to concentrate on one thing, affordability alone, without considering the impact on the other objective is not giving the whole picture.

'But we have been doing a lot in terms of affordability and we will continue to do so. We have increased the housing supply and moderated the demand. We are monitoring the situation as carefully as we can, so we cool and we do not crash the market,' Mr Mah said.

Despite the difficult balance between the two objectives, the minister emphasised: 'My assurance to Singaporeans is that we will always have the interests of both groups in mind - first-time buyers of flats and after they have become buyers of flats they join the second group, the owners of flats.'

'NSP is focusing on one group but failed to mention what they would like to do for the second group,' the minister added.

NSP secretary-general Goh Meng Seng, who is leading his party's five-member team for the contest with PAP for Tampines GRC, said in his address to supporters after the nomination results were released: 'Whether the sons and daughters of this land could continue to get a cheap roof over their heads, generations after generations, will depend on your vote.'

Mr Mah, during the press briefing after that event, was exasperated with Mr Goh's recent statement, in response to Mr Mah's examples to demonstrate housing affordability for first-time HDB flat buyers, that 'paying nothing as a deposit for a new flat or covering monthly mortgages with CPF contributions does not mean public housing is affordable'.

Mr Mah said yesterday: 'If being able to use less than a quarter of your income (to service your monthly mortgage instalment) and no cash to finance your flat is not considered affordable, what exactly does Mr Goh define to be 'affordable housing'?'

He urged NSP to come up with its definition of affordability. Otherwise the goalpost keeps shifting in the discussion on affordability. For his part, Mr Mah has defined affordability in terms of the deposit for a first-time HDB flat purchase and the monthly payment for the mortgage.

'I explained earlier that eight out of 10 new flat buyers last year used 25 per cent or less of their salaries to service their monthly mortgage (instalment). And they need not work for more than two or three years in order to build up their CPF for the deposit. And I also explained why this is possible, because of the grants that we give to young couples, especially the middle and lower-income young couples,' Mr Mah said.

Mr Mah also said the Opposition's aversion to the government's concept of HDB flats as both a roof over the head as well as an asset for Singaporeans would be akin to treating HDB flats as an expenditure item or rental housing. 'Without the hope of appreciation (in value), housing is then just an expenditure item, rather than an investment - no different from long-term rental. . . The government's position is very clear: Homes as a roof as well as an asset. . . Which is better for Singaporeans? Let's leave it to Singaporeans to give us their feedback.'

Reports by Winston Chai, Felda Chay, Chen Huifen, Chuang Peck Ming, Victoria Ho, Joyce Hooi, Lynn Kan, Lynette Khoo, Jamie Lee, Lee U-Wen, Michelle Quah, Nisha Ramchandani, Kalpana Rashiwala, Uma Shankari, R Sivanithy, Ven Sreenivasan, Conrad Tan, Michelle Tan, Mindy Tan, Teh Shi Ning, Anna Teo, Emilyn Yap

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