Artist's impression of flats in Tengah's Plantation Grove (Source: HDB).

Simon Lim says HDB flats are not affordable, considers HDB grants as “dirty words”

Simon Lim, a regular opinion writer on Singapore’s current affairs, took to his Facebook on 11 September (Wednesday) to highlight that Housing and Development Board (HDB) flats are not at all affordable, and the grants that they’re offering to make it easier for people to purchase the flats are considered “dirty words” to him.

Mr Lim started his post by referring to an article by the Straits Times titled “Higher grants, more choices for first- time HDB flat buyers” where it stated that first-time HDB flat buyers will now receive more generous grants and flexibility in deciding the size of their flat and its location. This announcement was made by Minister for National Development Lawrence Wong, who also added that the income ceilings to qualify to purchase a HDB flat for potential buyers has also been increased.

As such, Mr Lim stressed that no matter “how HDB mixes and matches or adjust their grant structures, HDB Grants are still dirty words.”

He explained that HDB is a monopoly that has a social mission to provide affordable flats for the people of Singapore, and they’ve actually done a great job at it in the early years of the country’s independence.

However, over the decades, HDB has become extremely greedy and cunning, said Mr Lim.

“On one hand, PAP ministers, especially former National Development minister Mah Bow Tan kept intoxicating and brainwashing Singaporean that HDB flats are affordable, but I urge readers to think harder and deeper if that is really so,” Mr Lim expressed.

He explained, “If HDB flats are truly affordable, then there is no need for any housing grant whatsoever. I repeat. If HDB flats are truly affordable, then there is no need for HDB to extend generous housing grants to their buyers whatsoever.”

In addition, the opinion writer also added that grants are not free money and “they must be repaid back to HDB with interest years later when the flats are sold”.

“What have happened to many people is that after their flats have been sold and the compounded interest on their grants paid back to HDB, they then realised that they are left in a negative equity position,” said Mr Lim.

To make it worse, Mr Lim also pointed out that the profits that home owners initially saw from their appreciating HDB flat prices is also gone. However, he noted that the CPF housing grants will not be returned back to HDB, but back into the CPF accounts of the respective persons upon selling the flats.

He also urged people to not underestimate “the power of compounding interest and interest on those very generous HDB grants could snowball to very, very large sums years later.”

“If HDB flats are truly affordable, then there is no need to load the buyers with SHG or AHG etc. it maybe too late to wish that greed has not overcome and blinded policy makers at HDB to just build and sell flats the old, good and honest way instead of pricing their flats exorbitantly and use housing grants to massage and mask unaffordability superbly well,” Mr Lim noted.

Upon reading his post, many netizens agreed with what Mr Lim said and penned their thoughts in the comment section of his post. They said that his article is very insightful and that he has “exposed the PAP’s housing & land scams in Singapore”.

A number of online users also agree that the the compound interest in the grants are high and they end up paying up more than the actual price of the flat. Some said that most people are not aware that they have to pay back the grant plus the interest to CPF.

Some said that the Government wants the citizens to be grateful for all the grants that they’re offering, but noted that this is actually a “bullshitting scam”. CK Lau questioned the need to hike up the housing cost so much over the the years. “Had it not been the hike in housing cost by easily 100 to 200k, people would have accumulated their retirement fund right from their own savings with dignity because less are being used in financing the housing loan and there is not a need to beg,” he explained.

However, a few disagreed with Mr Lim and said that the HDB grants are there to help needy first-time buyers. This is because without the grants, they will have to “cough out cash to pay down payments for a house”. In fact, Facebook user Huang M YF said that needy couples get much greater quantum of grants and “if they don’t have money to upgrade their dwelling, they also need not pay back any grants, and the grants become permanent free money to them.”

On the other hand, Richard Wong stated that, “It is irresponsible for us to advise not to take the grant. The grant is already in place more than 10 years ago. I wish at that time I purchased my HDB I had this more grants.”

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