Rise in public housing prices should never be higher than the long-term inflation rate

I read this article from opinion section in The Straits Times dated 10 December 2016. As a true blue Singaporean, I am surely in the camp that I do not like my property price to run without restraint. Frankly it is no point for me to stay in a HDB flat valued at even one million dollars now when I am not able to monetise on it. What I am after is a place called home when I can be at peace to organise my thoughts, to raise up my family, to develop my career and to innovatively work on my business instead of boggling down with thoughts on how to pay my HDB mortgages month after months for the rest of my life.

Frankly, it is an extremely wrong assumption that we want our HDB flat price to rise all the time. It is certainly a ridiculous assumption and it is likely a grave mistake to work on policies based on those assumptions. Even if I am able to gain on paper say $200k if we sell my flats, I still need another place to stay. Furthermore, I will feel extremely disappointed if my child’s application for a new 4-room HDB flat will cost him $2 million dollars fifteen years down the road. This is certainly what I do not want to see. Fifteen year’s time is not far from now. It is only in 2030. Furthermore, how about the generation after the next? If that were the case, I would rather that my children not stay in Singapore as they are not even able to own a small stake in Singapore call a home. It certainly contradicts the NS policy to protect Singapore as a nation and the family policy to increase our family size to replace our ageing population.

As far as I am concerned, I would only want my HDB flat to be comfortably of the right size within my financial reach. This is to enable me to channel my time and financial resources on more productive and innovative pursuits. By doing so, I need not depend on the government for financial aids even if I were to fail in my business or be made redundant in my career even for several times during my lifetime. It is no point for me to be a millionaire on paper when I have to sweat myself all out to keep up with my bills and mortgages. In fact, owning a home has never been and should never be in anyway a part of my wealth equation. I would rather have a home with a stagnant price but increase my wealth during those years by building up my business and increasing my stock portfolio.

High property prices also kill entrepreneurship. If there is a mortgage to pay, how many people are willing to drop even a decent-paying job just to go into an uncertain world of entrepreneurship? It is not because Singaporeans are not innovative or lack of entrepreneur spirit. Most people are just stuck because there is a big bill to pay for life and we cannot afford to fail and to make the people around us sink with us.

Beyond personal level, stagnant housing prices also remove the element of property speculation. There would not be enough profit margins for speculators to flip properties. Furthermore, there is no incentive for permanent residences (PRs) who have no intention of calling Singapore a home to buy into a Singapore property and then pocketing $200k in a hot market at the expense of a poor Singaporean buyer who has to work day and night to pay off the high mortgages. Furthermore, increasing housing prices make things very costly and make goods become uncompetitive internationally. Is that good for the nation as a whole?

To cut the story short, I need not have to live a Swiss standard or keep up with the Joneses. What I need is a place where I can settle at peace to enable me raise the family, develop my career and build a business. Wealth building is not necessary in a property. It can be in stocks, in business or even in non-financial pursuits.

In summary, I do not want property prices to be ever-increasing. The rise in property price should not go beyond the rate of inflation.

This article represents and carries the personal opinion of the writer. It is not meant move readers in any way. He is not a property expert but has been investing in the stock market for more than 27 years. He focused mainly on stocks and even raised a family relying totally on them. His wife who is not working nor does he trades in property. He only owns his matrimonial executive apartment and has fully paid for it. He is also the author of the book – “Building Wealth Together Through Stocks” which is available in both soft and hardcopy.

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