By Eugene Yeo and Jeremy Koh
Minister for National Development Mr Mah Bow Tan recently confirmed the deep-seated fear of many Singaporeans - that the prices of resale HDB flats have hit a record high and will continue to rise in the near future despite the economic uncertainties ahead.
Mr Mah did not reveal any intention on the part of the government to cool the property market and bring down the prices with a rather unconvincing blanket reassurance that HDB flats will remain "affordable".
It is actually very easy for the government to reduce the prices. By simply building more new flats in a year, scrapping the astronomically high COVs and limit the number of PRs buying flats in a year, the prices of HDB flats will be brought down immediately to a more affordable and sustainable level.
While a fall in prices will benefit most Singaporeans, it will not serve the political and economic interest of the government which explains their reluctance to take adequate measures swiftly to pre-empt a property bubble from forming.
Risk of political instability if prices crash
In a reply to question from a MP who asked if a cap should be imposed on rising HDB resale prices during a Parliamentary session in July, Senior Minister of State for National Development Grace Fu noted that HDB flats remained affordable to Singaporeans.
She said:
“‘HDB flat prices should be a reflection of Singaporean’s wealth and it is “not a bad idea” for prices to increase steadily, especially for those holding onto negative assets bought in the previous market peak in the mid 1990s.’”
The misconception that rising values of HDB flats will create wealth for Singaporeans has been perpetuated for the last ten years during the Goh Chok Tong era.
The PAP has never failed to remind Singaporeans that it has brought about high home ownership and a rise in asset value under its rule which it sp cleverly used to boast about its debatable "track record" in office.
During a speech given to Kim Keat residents in 1995, then Prime Minister Goh Chok Tong said:
“By how much have we increased the value of your assets? At the start of the upgrading, 3-room flats in the precinct commanded less than $80,000 in the open market. Today, I am told, housing agents are offering as much as $160,000. Your assets have doubled in the last three years. All of you made the right decision, by supporting the upgrading programme and voting strongly for it.”
[Source: http://stars.nhb.gov.sg/stars/tmp/gct19950115.pdf]
Many Singaporeans believed the government and accepted the relentless rise in HDB flat prices without realizing that unless they emigrate or downgrade to a smaller flat, they can never unlock and capitalize on the value of their flats in such an inflationary market.
If the government allows the prices of HDB flats to fall now, even by as little as 5 per cent, Singaporeans who bought the flats in the last 2 years at exorbitant prices will be burdened with negative value assets.
Being an exceptionally materialistic society by nature, Singporeans will surely pin the blame for their loss on the government for introducing measures to cool the market thereby leading to the drop in prices.
With a general election lurking around the corner, the PAP cannot afford to lose crucial votes at this important stage by allowing the prices of HDB flats to drop thereby causing disgruntlement and unrest on the ground which can culminate against a backlash from the voters.
Singaporeans must be continually led to believe that the values of their HDB flats are rising and will bring them great wealth in the future due to the foresight and capability of the PAP government.
Use of upgrading as a "stick" to win votes
As Mr Goh Chok Tong had said in his speech at Kim Keat 14 years ago, asset value is intricably linked to estate upgrading - upgrading of estates will lead to a rise in the value of resale HDB flats.
Estate upgrading is a perennial issue in every general election since the 1990s, conveniently used to threaten the electorate to vote for the PAP.
During the 1997 general elections, Cheng San residents were offered a bag of goodies such as upgrading of flats and amenities by Prime Minister Goh Chok Tong if the PAP team won the election which they eventually did.
The same carrot was dangled in front of Potong Pasir and Hougang residents in the 2006 elections. Unfortunately, they did not bite and both aging estates were denied upgrading by the government though the residents living there pay taxes like Singaporeans living elsewhere.
This unique brand of "pork-barrel" politics introduced by the PAP to ensure its political hegemony is possible only if the prices of resale flats are attractive. It will lose its effectiveness if residents are unable to make a hefty profit from the sale of their flats.
Though the quality of an estate's amenities like BBQ pits, parks, swimming pools and street soccer courts appear to have minimal bearing on the prices of resale flats (the prices of resale flats in Hougang and Potong Pasir are comparable to those in nearby HDB estates), upgrading nevertheless give the PAP a useful psychological tool to threaten and coerce the electorate to vote for them.
With almost their entire life-savings ploughed into their HDB flats, the last thing that Singaporeans want to see is that its value plummet as a result of their estate being denied upgrading by the government due to its political affliations which explains the strange phenomenon that though Singaporeans generally want to see more opposition voices in Parliament, they will prefer them to come from other constituencies rather than theirs.
Singaporeans who bought their flats at high prices will be even more beholdened to the PAP as they cannot afford to risk possible depreciation in their asset values should an opposition win incur the wrath of the PAP which will then proceed to cut fund government funding for their estates.
Even though residents will be unable to unlock the intrinsic value of their flats unless they sell them and "upgrade" to a more expensive flat thereby increasing their debt burden, the misconception continues to be ingrained deeply in their subconscious mind - rising prices of their flats will generate wealth for them.
As opposition parties are denied to the wealth and resources of the government, Singaporeans with no political allegiance will be loathe to vote for them out of pure economic considerations.
Analyses of past elections have shown that the hardcore opposition supporters who will cast their votes for the opposition regardless of upgrading constitutes only 20 to 25% of the electorate.
The middle ground of undecided voters constitutes about 35 to 40%. Though they have no political affliations and may not even like the PAP, estate upgrading the overwhelming factor which caused them to cast their votes for the PAP. Needless to say, this explains why it is an uphill task for the opposition to clinch more than 50% of the votes especially in a GRC.
Upgrading of HDB flats will never be an issue if they are bought at reasonably low prices which are kept in check by the government. Since they are not expected to make a profit anyway, (which should be the case for subsidized public housing) it matters little if there are adequate facilities and amenities in their neighborhood.
To keep the citizenry politically apathetic and inactive
An important, but often neglected reason why HDB prices are kept constantly high is to keep the citizenry subservient, apathetic and disinterested in politics.
The PAP is an authoritarian party which does not tolerate any political dissent or opposition to its rule. Neither does it feel comfortable to be subjected to intense public scrutiny.
When writer Catherine Lim happened to open her mouth a bit more often, she was told off by Prime Minister Goh Chok Tong to "join politics or shut up".
The only way to keep Singaporeans away from politics is to keep them focused on earning money to improve their material well-being to the extent that they have no choice but to do so in order to feed themselves and their families.
The prices of HDB are allowed to rise gradually such that Singaporeans can still afford them, but they will have to slog literally like dogs for the rest of their lives to service the mortage loans.
With the people having to spend the majority of their time earning money to pay for the right to live in over-priced leasehold government-owned flats, they will have no time or interest in politics.
Due to their precarious positions, most Singaporeans will not risk breaking their rice-bowls by joining the opposition since the government is the largest employer in Singapore and even companies in the private sector have considerable dealings with the government.
Politics is an expensive luxury in Singapore. With few savings even for one's retirement, the average Singapore citizen will never dare to contemplate joining politics.
Through the control of HDB prices, the government ensures that the standard of life for the average Singaporean is constantly kept at a level beyond mere subsistence. Singaporeans will be able to afford the basic necessities of life easily. Few ever go hungry or homeless, but they will have no energy or resources left to go against the PAP.
In this way, the PAP makes sure that few Singaporeans will be able to amass sufficient wealth in their lifetimes to mount a challenge against its rule like the example of Thai tycoon Thaksin Shinawatra whose immense wealth enabled him to become the Thai Prime Minister in less than 2 years after he bankrolled the formation of the (now defunct) Thai Rak Thai party entirey from scratch.
The older generations of Singapore tycoons such as UOB's Wee Cho Yaw, Far East's Ng Ting Fong, Creative's Sim Wong Hoo and Ho Bee Group's Chua Tian Poh are either co-opted into the regime or show no political ambitions to be of threat to them. The real danger lies in the young from which one maverick in the mould of Obama can emerge and create "trouble" for them.
Conclusion
In order to understand the political motivations behind the PAP for keeping the prices of HDB high, one must understand its innermost insecurities and fears.
From its control of every institutions of Singapore to its economical clout exerted through gigantic state-linked companies, the PAP-system of governance or Singapore Inc has only one ultimate aim in mind - to ensure, maintain and perpetuate its rule in Singapore.
MM Lee obviously believed that only the PAP is fit to govern Singapore when he said caustically recently that an opposition government will deplete our reserves and make life difficult for the PAP should it return to power again, never mind the fact that the PAP had already lost a huge chunk of our reserves in less than a year.
The PAP cannot afford to take any chances or risks because it has to win every elections at all cost. Even a mere increase in the number of opposition MPs is perceived as a disaster to the current Prime Minister worthy of "fixing" by hook or by crook.
The political cost and loss of leverage in bringing down HDB prices will be too high for the PAP to stomach and therefore we will not expect a drop in prices any time soon at least before the next general election.
Singaporeans are brought up believing that they own their HDB flats and their rising prices will create wealth for them.
Wrecking their dreams now will be tantamount to political suicide as the PAP should have known better: never mess around with monies and properties of Singaporeans for in a country bereft of any soul or ideals, crass materialism is the religion of the majority of the population.
Singaporeans can live without democracy, freedom or human rights, but they definitely cannot bear to continue living without the scant (erroneous) consolation that their HDB flats will bring them a fortune in their lifetimes.
EDITORS’ NOTE:
If you like our work and would like to support us, please transfer your donations via paypal to our account ([email protected]). Any amount will be greatly appreciated! Alternatively, you can also help boost our advertising revenue by clicking on the ads displayed. Thank you!
Join our tweet at: http://www.twitter.com/temasekreview
Read More →
Podcasts didn't decide GE2025 I refer to the CNA’s Commentary: Podcasts didn't decide GE2025, but they changed how Singaporeans engage with politics (May 9).
The 2025 General Election has several features/characteristics that deserve our attention, discussion and
reflection:
In today era, technological revolution, innovation and advancement...
This is not a game of cards I can appreciate parties wanting to hold their cards close to their chest, but the smoke and mirrors games on nominations day, the shuffling of the DPM from a seat he had openly been declared to be defending, and other ministers shuffling constituencies leaves one feeling the PAP thinks it is playing a game of cards.
Constituency...
Is a Parliament full of PAP MPs really better for Singaporeans? I refer to The Online Citizen GE2025 news report, “Lee Hsien Yang: Is a Parliament full of PAP MPs really better for Singaporeans?” - (April 14), and “The Straits Times’ report, “GE2025: Singaporeans will go to the polls on May 3, Nomination Day on April 23” (April 15), and The Online Citizen GE2025 report,...
𝐈𝐧𝐜𝐨𝐦𝐩𝐞𝐭𝐞𝐧𝐜𝐞 𝐚𝐧𝐝... Is the PAP of today exceptional, with unmatched competence and delivery? Afterall, that is their justification for the highest salaries in the world. Let’s look at its more recent track record.
Large numbers of NRIC numbers were recently unmasked, leaving Singaporeans exposed to identity theft, fraud, abuse and scams....
GE2025: Red Dot United to contest in Holland-Bukit Timah I refer to the CNA news, “GE2025: Red Dot United to contest in Holland-Bukit Timah GRC but may make way for Singapore Democratic Party” (April 10),
“More opposition 'star catches' are emerging. Is Singapore's political scene maturing?” (April 10) and “PSP says government response to Trump tariffs 'overblown',...
How the end of Ukraine war could be secured, even with waning... I refer to the CNA’s commentaries, “How the end of Ukraine war could be secured, even with waning US support” (Mar 4), “Lessons from the Trump-Zelenskyy meltdown- for friends and foes” (Mar 1) and “Will Trump tariffs push China to change economic tack?” (Mar 3).
Foremost, we need to recognise the reality...
Singapore Army Recruits Deserve a Minimum Wage Singapore Army Recruits Deserve a Minimum Wage: National Service Should Not Come at the Expense of Opportunity Costs
Singapore’s National Service (NS) has long been a cornerstone of the nation’s defense, requiring young men to dedicate two years of their lives to military, civil defense, or police service. While...
Trump-Putin deal on Ukraine will be Europe’s moment of... I refer to the CNA’s Commentaries, “Trump-Putin deal on Ukraine will be Europe’s moment of reckoning” (Feb 20) and “Ukraine can survive with the ‘least worst’ peace” (Feb 22).
Now, In the eyes of European Union, they have lost trust and confidence in the United States, it is solely due to the flip flop...
From Deepseek to Huawei, US tech restrictions on China are... I refer to the CNA’s Commentary, “From Deepseek to Huawei, US tech restrictions on China are backfiring” (Jan 31).
Would it be practical, useful and effective for the United States to continually pursue an aggressive containment strategy to hobble China’s tech push? Undoubtedly, the answer is obviously not.
There...
Putin escalates Ukraine war I refer to The CNA’s Commentary: “Putin escalates Ukraine war by a step, not a leap, with missile experiment” (Nov 23).
Foremost, Zelenskyi’s intention to join Nato has greatly threatened the security and survival of Russia. Hence, Zelenskyy has offended Putin and Putin has no choice but to launch a war with...
Will PM Wong address the astronomical ministerial salaries? I refer to The TR-Emeritus opinion article, “Will PM Wong address the astronomical ministerial salaries” (June 14) by Mr Yoong Siew Wah.
It has always been a controversial topic which concerns about our top political leaders who receive their salaries that are many times higher than those foreign political leaders.
Our...
