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Tuesday, July 5, 2011

Affordable HDB flats

Many people have written about the high cost of HDB flats under the DBSS, BTO and EC schemes. The problem has become so large that even the Minister, Khaw Boon Wan, is having sleepless nights. The main culprit, in my view, is the use of tendering for the price of land.

To make HDB flats affordable, we have to get away from using tender to fix the market price of land. It is better to adopt a different measurement, such as the valuation that is used to determine property tax. It is market linked, but does not push the prices to the extreme. If we price land using a more conservative approach, and allow a big supply of land to be made available on tap, it will moderate the increase in prices.

I will write more about this matter, and cover a few related issues, within the next few days.


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