Actually, if HDB flat prices fall, private property prices will also fall; starting from the lowest end private properties. The divide will not get bigger as you have suggested.
Its a complex problem to solve.
1. They have to maintain a correlation of prices of HDB flats to private property, because if they dont allow HDB prices to escalate, more people will complain that the prices of HDB are being artificially suppressed, the rich get richer and poor get poorer. As a Singaporean, can u accept such a situation ?
2. They also have to deal with foreigners coming to Singapore and buying HDB @ rock bottom prices. At least now, those who own HDB can sell their flats at high resale px to foreigners and either upgrade to condo or downgrade to smaller flat and get a pile of cash. Again as a Singaporean can u accept if foreigners buy them cheap ?
3. The 3rd problem is the one closest to the young generation .. how in the world am i going to afford to settle down ? Basically this group will not complain if HDB builds fast enough and sell flats cheap to them. Right now, the government has a pricing formula that links new flats to old flats. The price to market policy sacrifices point (3) to point (1) and (2).
In my mind, unless a paradigm shift takes place, the problem will be difficult to solve. Everyone complains but no one has offered a concrete solution to the problem .. perhaps there is no practical solution or is there ? Maybe the solution lies in splitting HDB into 2.
One division operates like now - no change.
Another division builds and sells flats cheap to those who think they dont want to pay such high price - the caveat being u can only sell it back to HDB at predetermined low prices. HDB can then recycle these and sell it to couples in need of low priced flats. Then whether its 2009 or 2020 or 2050 or 2100, there will always be a flat for people who cannot afford or dont want to pay through the roof. But downside is, down complain about location, dont envy people who took the dive to buy a normal flat and had capital gains after a number of years.
then it becomes - choose wisely and whatever the outcome, it is your choice and yours alone.