There is a thread discussing on the medical cost, and how did our medical system fair when compared to those of the developed nation.
This topic somehow directs my thought to our public housing scheme.
HDB used to sell a four room flat for $25,000 in the 80’s, today a similar flat cost about $200,000 on average. Did our real wages catch up with the housing cost? I suppose technology advancement has help to cushion some of rising construction cost. In the 80’s, architects need 9 months or more to produce the blueprint, today we can do it in less than a month with the help of designing software like Autocad.
Is this the true price for a HDB flat and is it sustainable?
I see it as a classic case of market failure, where the builder monopolized the market and determine the selling price. There are quite a lot of empty units around and HDB is engaging private agents to help market these flats. There is supply but no demand and the price is still very high. This is a sign of an inefficient market. I have heard a lot of people are using half of their life time paying off the HDB loans. They have no saving when they retire, except for the miserable sum in the CPF SA.
The men in white tell us that garment subsidize the first time buyer $40,000.
I am wondering, what is actual cost for building one unit? If the building cost is lower than the selling price, how can garment claim that they subsidize its citizen on the HDB flat.
This sticky price will hurt this generation and all the future generations to come. If the garment decided one day to break this vicious cycle of sticky price, what will happen to those who bought during the peak of property (before 1997).
What should the garment do? Which generation should the garment sacrifice?
This is not a simple problem, do you have a solution?