I read with interest over the recent comments made by our dear MM Lee KY on the impending elections and prices of HDB.

I extract out some part of the text here.

THE current contentious issue on the affordability of public housing was given another airing by Minister Mentor Lee Kuan Yew who cautioned Singaporeans not to cast a protest vote against the ruling party over this.

As Singaporeans lament rising flat prices, he said they ought to understand that the Government sells them at a subsidised price, below market rate, so that they can own an asset that will appreciate in value over the years.

It adds to their wealth and this is an asset-enhancing policy Mr Lee believes citizens should not find fault with.

If they do, they must be ‘daft’, he said, at a dialogue during a housing conference as part of a series of events to mark the Housing and Development Board’s 50th anniversary.

And if National Development Minister Mah Bow Tan is unable to defend this policy, ‘he deserves to lose’ at the next general election, he quipped, to laughter from the participants, including a chuckling Mr Mah.

But if Mr Mah loses to the opposition, he warned that Singaporeans better sell their flats fast as they would no longer be of any value.

Firstly, i still cannot understand why PAP insists that the flats are sold at a subsidised rate. The meaning of “subsidised" is already more or less twisted in my opinion, since the amount of subsidy one can get depends on how much the prices of a resale flat is. Its all a simple equation.

Price of a new HDB flat = Price of resale flat in current market – “subsidy"

Since the price of resale flat keep rising due to a couple of reasons (more of this later), and the amount of subsidy is a figure no one actually knows, one’s best guess is that prices of new HDB flat will only rise in tandem. Any lesser mortals can understand this simple logic, really.

And how does a “property" like HDB flat be considered an asset to a ordinary lesser heartland mortal like you and me? MM Lee claimed that HDB flat will only appreciate in value over time, but failed once again to see another simple logic.

I buy a new HDB at price $XXX,XXX.

Lets just say that over the next 10 years, the price of the flat has grown to $XXX,XXX + $YYY,YYY.

So if i decide to sell and make a profit from it, the amount of profit i will get back is $YYY,YYY minus the interest and whatever processing fees and crap that i need to pay.

And i look for a new house.

Wait, buying a house in the market then will mean that everything will have grown roughly $YYY,YYY, which would effectively cancels out the “profits" that i have gained. Whats worse, i get myself into another decades of debt plus more interest to be paid.

As a ordinary lesser heartland mortal, i do not have the luxury of having another place to stay while i wait for the market to fall, meaning i sell on a high and need to buy on a high. So how does “owning" a flat really puts me in a profitable position? And i am not even owning, its a 99 year lease, so we all are just “RENTING" a flat from the gahmen, on a false front that we actually own it.

And why does the prices of resale flats keep rising?

Because there is a shortage of supply. Why?

Because HDB decides to stop building new houses. Why?

Because with the shortage in new flats, couples need to buy from resale market, thus pushing the prices up and the prices of new flats can follow suit.

And thus, while claiming that HDB is not going to control the market, it does have another way of manipulating it.

All this while, on seeing the rise in the market prices, HDB decides to do their part by releasing Build-To-Order (BTOs) projects nearly on a monthly basis. National Development Minister Mah BT claimed that these new flats will cater to the demands of singaporeans, and once again failed to see the 4~5 years wait a young couple has to take before moving in. My mum used to say, don’t wait to dig a hole until you need to shit. A solution that takes 4 years to manifest is not really a solution at all. For someone who take a million dollar salary, his response is disappointingly slow.

MM Lee seems to take the upcoming elections pretty seriously. He should, afterall, PAP won by a “mandate" of 66.6% the previous round. The goodies handed out before then didn’t work well apparently. So when the carrot failed, the stick has to come. MM Lee is openly threatening you and me, the lesser mortals not to be idiots, cast a vote to protest against all the shit we are seeing, or face the consequences.

For now, what we can see/feel, are the consequences when we voted for PAP the last time round.