Tuesday, April 27, 2010
Stubborn Mah Bow Tan insists that HDB is still affordable
Subject: Stubborn Mah Bow Tan insists that HDB is still affordable
In spite of the prevailing public sentiments, National Development
Minister Mah Bow Tan repeated his stance yesterday at Parliament that
HDB flats are still “affordable” to Singaporeans.
Mr Mah used a formula called the debt service ratio (DSR) which
compares the monthly mortgage installment to the monthly household
income to substantiate his claims.
The DSR ranges between 17 to 25 percent for new flats and around 30
percent for mature flats in central locations.
“These figures are within the international benchmark for housing
affordability, which ranges from 30 per cent to 35 per cent,” Mr Mah
was quoted as saying in the Straits Times today.
Mr Mah also admitted that “it is possible that prices of resale flats
have risen faster than incomes when indexed against different years.”
in response to a question by PAP MP Lim Biow Chuan.
In an extensive interview with the Straits Times a few weeks ago, Mr
Mah used two sets of figures from the years 1999 and 2009 to show that
the relative pace of income has “out-paced” that of HDB flat prices.
The statistics were disputed by Reform Party member Hazel Poa who
wrote on her blog that the results would be different if the base year
is different, causing much embarrassment to Mr Mah.
The increasingly unpopular Mr Mah has come under fire of late from
Singaporeans for his failure to control runaway HDB flat prices which
have hit a record high in the last few months, caused partially by
rising demand fueled by mass immigration.
Though PRs form some twenty percent of the buyers in the resale
market, Mr Mah insisted that they have “negligible” impact on the
He also lashed out at first time home buyers for being “fussy” and
having “unrealistic” expectations.
Mr Mah earns around $2 million dollars a year, or more than 4 times
the annual salary of U.S. President Barack Obama.
PAP strongman Lee Kuan Yew castigated Singaporeans for being “daft” (stupid)
should they cast a protest vote against Mr Mah in the next general
election over sky-rocketing HDB flat prices.