In the past week, two HDB listings made the headlines. A 1,206 square feet 5-room resale flat has just been sold for $928,000 in Sengkang at Blk 216C Compassvale Drive. While another 5-room flat located at 42a Margaret Drive is being listed for $1.5 million.
There is only a limited number of BTOs every cycle. There are many people wanting to buy a flat, and sometimes the waiting time is unreasonable. Imagine if you have child on the way, 5 years waiting time is too long. Hence, there are many people who choose to purchase resale flats instead.
However, resale flats are becoming increasingly unaffordable as well. How can the younger generation who are just starting out in their careers afford a million dollar flat? At what age do you have to start working and start saving in order to be able to afford your own place at a reasonable age?
This issue is worsened because the current system is unable to rule out people who don’t actually need the HDB flat.
There are many Singaporeans who still see the HDB as an investment, and will often sell it after MOP for a profit. Sometimes, they don’t even live in the HDB during the MOP. Maybe their parents are able to afford a big-enough house for their married children to comfortably live in. Maybe their parents already bought a private property for their children to live in while waiting for their HDB and they decided to continue living there.
Whatever the reason, the fact is that they don’t need a HDB flat. By purchasing a HDB flat, they are depriving others who really need it from doing so. Thereafter, this also drives up resale prices. Those who really need a flat and are unable to wait would increase the demand for resale flats.
The HDB BTO formula may have worked in the past because there are less parents in that era who are able to afford a second or third apartment for their children. Parents were less financially savvy. There are a lot less people who buy HDB flats and leave them empty.
The government should really look into this and make sure that HDB fulfills its purpose of making home-ownership possible for more Singaporeans.