Would they prefer a fixed-price system, whereby home-owners, when they want to sell their Housing and Development Board (HDB) flat, must return it to the authorities for the price they paid for it?
In this scenario, no one is allowed to profit from the sale of the flat. As a result, prices are kept low.
"It's almost like renting the flat to somebody," Mr Mah said as he spoke to MediaCorp about housing issues in a year when even he was "caught off guard" by how the HDB resale market trended north in a recession year.
"Nobody, no matter how prescient, no matter how clever, would have been able to predict that this was what was going to happen," he said.
Nonetheless, Mr Mah believes the current system is far superior to one that keeps housing cheap through a non-market-based system.
"Because it gives greater benefits to the home-owner. It gives them a stake in Singapore ... it also allows them to profit from the growth that Singapore enjoys because as we grow, the flat value goes up," he said.
"Once they own the flat, it's an asset. And this asset can be cashed out in old age, be used to finance their retirement. It's a store of value for them."
Mr Mah sees no conflict in the twin objectives of providing affordable housing and creating assets for Singaporeans that will grow over time.
"We have to do both for the simple reason that a flat buyer today will be a flat owner tomorrow ... For that to happen, we must make sure that flats are affordable," he said.
"Otherwise, how can the flat buyer be an owner?"
Prices are still affordable, said Mr Mah, as evidenced by how 80 per cent of Singaporeans who buy new flats can pay for their mortgages using only 21 per cent or less of their income - in other words, using only their CPF contributions.
'At least one BTO launch a month'
Looking to next year, Mr Mah said the opening of the two integrated resorts will lead to higher demand for housing. "But we'll increase the supply as well.
"We hope demand will go up because that means the two IRs are successful, and if the two IRs are successful, tourism numbers will go up and employment will go up and the economy will benefit."
Pundits are predicting that property prices, public housing included, will continue to increase next year.
The beneficiaries of this, and of any property upturn in general, will be those who own more than one property, according to Ngee Ann Polytechnic real estate lecturer Nicholas Mak, as they can "keep one for themselves, sell one off or rent the other one out".
For flat buyers waiting for prices to dip first, Mr Mak added: "No one knows when the next cycle will take place, or where the bottom is, so they have to get on the bandwagon."
According to Mr Mah, people who bought homes because they were "afraid prices are going to go up even further" contributed to rising prices this year, with pent-up demand and the "usual demand" from first-time buyers and permanent residents being the other factors.
Flat buyers, he said, can look forward to at least one Build-To-Order launch a month next year, which translates to some 12,000 new flats on offer.
"They will be in good locations, not necessarily in mature estates, but in newer towns near MRT stations, facilities in exciting neighbourhoods, so don't rush," said Mr Mah.
Source: TODAY, 30 December 2009
