More than a decade ago, PAP must have already been aware of the excessive use of CPF for housing: CPF usage for 99-year leasehold private property with remaining lease of between 60 and 30 years was drastically reduced.
PAP could, and should, have done the same with public housing. But since more than 80% of Singaporeans live in HDB flats, reducing CPF for HDB flats would be a slap in asset enhancer Goh Chok Tong’s face.
In 2013, PAP finally decided to bite the bullet and applied similar CPF legislation to HDB flats. Expectedly, demand evaporated and prices have collapsed.
The reason: Buyers would have to fork out about $1000 for the monthly mortgage of an old flat. But who has so much cash after 37% of wages has already been set aside in CPF for retirement?
PAP had of course known that this would happen but why did it still introduce the new CPF legislation in 2013?
A possible reason is PAP expects HDB flat buyers to continue being daft and willing to accept more pain for the failed ass-et enhancement policy.
Currently, the price difference between a newer and aged 3-room HDB flat in Ang Mo Kio could be up to more than $200,000.
Peanuts to PAP ministers, the additional $200,000 – if transferred to CPF Life ERS – could have provided a monthly income of about $1500 for life after age 65.
PAP has overestimated itself and thousands of HDB lessees of aged flats seem to have finally awoken to its ass-et enhancement scam.
Now, even idiots are aware that VERS/HIP 2 will not address the issue of lelong prices of aged flats.
PAP has now shot itself in the foot and should prepare to face voter backlash next year.