A few years ago, when I learnt that HDB linked the prices of new flats to prices of resale flats. I complained that it is not the right way to price the flats.
Why? The reasons:
1) We knew that market always have bubbles. By linking the prices together, during a property price bubble, HDB new flats prices will follow the prices of resale flats and be inflated. HDB will earn fat profits. During a downturn, the prices of resale flat will be depressed and new flats prices will be sold maybe below cost.
2) HDB mission is to provide affordable flats to families, and linking the prices together contradicts this mission.
3) A resale flat in a mature estate like Ang Mo Kio can never be compared to a new flat in Seng Kang because of the difference in availability of amenities like schools, child care facilities, buses, roads, MRT, market, shops etc. As such new flats must be sold at a price much lower than resale flat and not linked to resale flat.
A better way is to price the new flat slightly higher than the cost of building the flat. This ensures HDB make small and stable profit rather than earn big profit in boom years and suffer losses in downturns. Finally, the new minister has listened to my complaint and has delinked the prices of new flats to resale flats.
Now, I have another complaint. The cleanliness of the public toilet in coffeeshop, market, CC, is in third world standard and not first world. Can we do something about it?
