Falling prices of resale HDB flats has fallen flat on PAP’s face and the government has no solution.
Through a combination of abusing CPF to support property prices, boosting demand by importing foreigners and lies about asset enhancement, HDB resale prices had headed too far north where it shouldn’t. Hundreds of thousands of HDB lessees are now underfunded in their golden years, betrayed by PAP.
HDB resale prices have been trending downwards since 2013 and regardless of private property prices moving in opposite direction, will continue falling.
PAP is currently trying to resolve 2 self-created issues: CPF and HDB. CPF seems to be its bigger concern because, instead of allowing CPF to fund older resale flats, PAP severely restricted the use of CPF in 2013 for flats with less than 60 years’ remaining lease. This is the sole reason for the collapse in resale prices of flats above 40 years.
Clearly, PAP’s ‘solution’ is to force HDB lessees of older flats to accept much-lower prices after ministers had lied about asset enhancement. 😦
PAP-created housing issues were clearly predictable decades ago as even an idiot would have been aware of the folly of allowing 23% of wages/60% of retirement savings for housing consumption. (at one stage more than 40% of wages)
Effective levers to increase HDB resale prices, eg increasing foreigner population to create fake demand, are no longer available at this stage of the cycle. (In view of guaranteed regular major MRT disruptions, PAP is unlikely to risk a total collapse of our transportation backbone.)
What PAP has been doing is distract HDB lessees from the issue by indirectly acknowledging its error without being held accountable. CNA
There are many factors working against HDB lessees, including PAP which suddenly restricted the use of CPF for older flats.