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Minister Desmond Lee faces online criticism for blaming psychological factors for HDB price hikes
National Development Minister Desmond Lee attributed HDB resale price hikes to psychological factors, drawing criticism online. Netizens argued that the government has overlooked structural and economic issues, with some expressing frustration that HDB has strayed from its mission to provide affordable housing and calling for a policy reassessment.
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SINGAPORE: While National Development Minister Desmond Lee blamed psychological factors for the HDB resale price hikes, the online community expressed disagreement, arguing that the government’s failure to address the underlying structural and economic issues driving housing prices makes it appear out of touch with the realities faced by its citizens.
Additionally, some netizens voiced frustration that the HDB has strayed from its original mission of providing affordable public housing, calling for a reassessment of the government’s approach to monitoring the HDB market.
Detailing the government’s latest announcement of new property cooling measures on Tuesday (20 August), Mr Lee explained that tightening the loan-to-value (LTV) limit for HDB housing loans aims to temper demand at the higher end of the public housing resale market.
Effective from 20 August, the LTV limit has been reduced from 80% to 75%, aligning it with the mortgages offered by financial institutions.
He assured that the adjustment in the LTV limit is not expected to significantly impact the majority of HDB loan applicants, as nearly 90% of home buyers already borrow at LTV ratios of 75% or less.
“That 10 per cent disproportionately buy the larger flat types, which drive up the overall market … They also disproportionately pay much higher prices,” the minister noted.
Regarding the rise in HDB resale prices, Mr Lee attributed it to strong, broad-based demand across all buyer groups, partly driven by robust income growth over the last two years.
He also noted that rising private property prices have led more second-time buyers to the HDB resale market for upgrading. With the same budget, these upgraders can generally acquire a comparable-sized resale flat with better attributes than some condominiums.
Additionally, Mr Lee pointed out that a decrease in the number of flats reaching their Minimum Occupation Period (MOP) this year has contributed to tighter resale supply.
“There is also some Market psychology at work here,” Mr Lee said, referring to recent high-profile transactions and record resale prices that have attracted significant media attention.
However, he defended that in the past one and a half years, flats selling for over a million dollars have comprised about 2% of all resale transactions.
For smaller flats, such as room and four-room units, the most expensive ones are typically located in central HDB estates with strong transport connectivity and comprehensive amenities.
“More than half (of these flats) are located on very high floors about 30 stories and have good views, such transactions may come only 0.5% of all four room or smaller Flats transacted in the last two years .”
Mr Lee acknowledged that sellers, influenced by media coverage of record prices, have raised their price expectations, while buyers have become anxious to secure flats before prices increase further.
“if we are not careful, such market dynamics can cause the resale market to run out of line with economic fundamentals and cause a bubble.”
Call for Govt action on structural and economic factors driving housing price increases
Comments on The Straits Times Facebook post reveal that many netizens find Mr Lee’s attribution of the HDB resale price hike to psychological factors unconvincing.
Notably, Marcus Neo, a boxing coach, pointed out that while psychological factors can influence market behaviour, focusing solely on them without addressing the underlying structural and economic issues driving rising housing prices can make the government appear disconnected from the realities faced by its citizens.
“This perspective resonates particularly in societies with a growing perception of inequality and where the cost of living is a significant concern.”
While a netizen attributed the lack of housing funds to financial mismanagement by some Singaporeans and defended the government’s current policies, Marcus Neo countered by highlighting that this perspective overlooks the realities of income inequality and high living costs.
The netizen suggested that Singaporeans travel to Johor Bahru (JB) for shopping and argued that opportunities are plentiful, seemingly dismissing the significant cost of living concerns faced by locals.
Neo noted that while some individuals might afford holidays, many others, particularly lower-income groups, face significant economic strain, including untreated health issues and limited access to essential services.
“The argument that opportunities abound ignores systemic barriers, including gaps in education and skills development, which limit social mobility. ”
Additionally, he noted that cross-border shopping reflects the high cost of living in Singapore rather than affluence.
Concerns arise that million-dollar HDB flats could become the norm
While Minister Lee assured that million-dollar HDB flat only comprised small portion in the market, some raised worries over if the current rate of price increases for both new and old HDB flats continues, million-dollar flats could soon become the norm.
A netizen argued that the overall increase in market prices has driven up resale prices further, and pointed out that the rate of increase in resale prices closely mirrors the increase in new flat prices, which are regulated by the government.
HDB urged to refocus on affordable housing
There are also netizens expressed frustration that HDB has strayed from its original mission of providing affordable public housing for Singaporeans.
Some suggested that HDB flats should not be part of the resale market but instead be bought back by the government to maintain affordability.
They believe that the current approach, including offering grants, fails to address the core issue of high resale prices and that the government should focus on reclaiming and reselling older HDB flats to provide more affordable housing options.
Netizens warn of socioeconomic imbalances in prime areas
A netizen suggested to government to reconsider building high-end flats in prime locations, suggesting instead to sell these areas to private developers and use the funds to subsidize more affordable flats in less central locations.
By shifting the focus from building high-end flats in prime areas to developing flats in Outside Central Region (OCR) areas, the netizen believed the government could allocate more resources to subsidize these more affordable flats.
The netizen is concerned that if only younger and wealthier residents occupy these prime areas, it could lead to socioeconomic imbalances. They advocate for policies that ensure a more diverse population in desirable locations.
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Malulah, Profits Above People🖕🏻Malulah!
I think the profile of the owners of the float whose price is above $1 million to b informed to the public
I believed that the price of the HDb flats did not decrease significantly since the implementation of the cooling measures n this show the result of the ineffectiveness of the cooling measures
What does a lawyer trained in “Law” know about “Psychology”? The current Prime Minister majored in economics but is clueless on market fundamentals. Now a lawyer is trying to teach us about “Psychology.” Just what exactly is going on in the millionaire minister club? “if we are not careful, such market dynamics can cause the resale market to run out of line with economic fundamentals and cause a bubble.” Yes, which is exactly what the current situation is right now. A property bubble. It seems that the ruling government is still stuck 10 years in the past. That would explain… Read more »
Can we have the statistics of how many PRs own HDB and what is their combined income?
Government is the Property Developer, they want the prices to go up. HDB housing prices will keep going up no matter what. But there is always cheaper options of Tengah, Sembawang or even the still non mature estate of Jurong West, difficult to argue with the government on affordable housing. By the way, the government needs this income, and it’s very very good income.
Desmond can choose to intervene or let the issue about these higher end hdb price keep going higher and higher. But he chose to intervene. Why he could do so, becos over a certain period of time, he have the data, the actual data which let him makes the correct decision. This is why Singapore property market is thriving and investor have confidence to put money here for it ,including those who wash money of course. The low ses locals here do not know how lucky they are but instead put blame and complain on Desmond. Maybe these same complaining… Read more »
S1
They cannot change course.
The solution is much too dangerous… the banks will lose money
The value of the Reserves will be badly affected if not kaput.
No more cards to play
The dice already loaded
That being the case, opposition also cannot change the course.
People might as well take advantage and make money from it.
Its musical chairs… dont be the last one.
Desmond treat Singaporeans as basement dwellers mentality types when IT IS Sheegaporeans who mark X for PAP to be where they are today AND this PAP Administration CLEARLY mock Singapreans.
EXCEPT FOR VOTES for their GE, SGpns do NOT have stakes in SG the way PAP Administration shaft them aside.
DL, I have already given you the solution. If you do not implement it soonest, you are going to face an angry Public. I repeat my solution. 1. HDB is only for occupation. 2. Implement an income ceiling of $8000/- 3. Get rid of all Real Estate Agents 4. HDB is only for Singaporeans. New citizens can only buy after 10years . 5. PRs cannot own HDB. 6. Grants should only be given for direct purchase from HDB. 7. As long as the income matches the purchase, all Singaporeans can buy HDB. Remove the age criteria. The market will correct… Read more »
The HDB are priced to coincide along the same level as to the present cost of living but only to about 30 to 40% of folks whose wages match that same level. For the rest, their wages have been surpressed by cheap FTs and therefore they find the cost of even HDB, considered as low ses housing daunting. So where is the real problem? The wages of the 60 plus % of folks whose wages cannot match or handle the current cost of living. To make matter worse, many as young as 40 are being replaced by cheaper labor option.… Read more »
I’ll take my chances with the neuroscientists and greedy corporations rather than the mushy, almost Luddite worldview of Mr. Desmond Lee….
S$110,000 for 4-wheel; $1.3M for public housing; $10,000 for a hawker stall and say ‘WORTH IT’! Ya, he is able to conflate the *psychological* and *insanity* horns of this dilemma into a matched pair upon a contrary animal’s head.
Did he study economics or understand businesses?
He might as well blame those rats running and burrowing in various estates for the runaway housing prices.
Or blame my cat for the runaway prices? Sounds better this way
They (the highest paid Title Holders) who control the supplies and demands now simply blaming us for the runaway housing prices.
In the 1980s and 1990s when floodgates were tight, we don’t have such runaway prices. During that time, HDB in fact built excess HDB flats so much so that citizens can simply walk in to choose leftover new flats at low prices.
Now?
The market pricing of HDB resale does not care what is the factor because the bottom line is the price is jacked up and the little measure won’t help much according to some property experts
He said land is reserved for unborn need for housing.
He has NOT informed SG what ARE detail PAP plans, how many units, where, prices.
Where the UNBORN come from? Is he going to FUCK AROUND PAP females to MAKE up for UNBORN numbers.
I dun understand how PM LW, being an economists & Finance Minister, let this pass…even exalting the grants at his NDR speech…
Psychological factors?
This is a typical strawman argument!
This government is always using strawman and red herring arguments to distract from the real problem.
By the way, there are lots of IB trolls using such argument tactic.
Don’t fall for it and don’t be dragged into a long discussion with them.
Maybe psychological dysfunction leaders is the problem in Fantasy Island!!!
Never their own fault when things go south.
Thats right, blame the citizens.
Its always the “free riders” thats misunderstood the policies.
DL trying so hard to backtract on his lopsided HDB grant rulings….
Haiyaaa DL boy boy , go back to school lah…
.study harder ok?
So many “measures”. All ant-bite size. Suggest Desmond Lee go for broke. NO LOANS allowed for anyone willing to pay over $1 million for a HDB pigeon hole. Pay CASH upfront.
Policy Already Streamlined What!!
Like Insurance Policy.
Read The Fine Prints.
People who bought Condos are struggling to keep afloat because of increased interest rates.
They are down-grading or in Khaw Boon WAN’s term right sizing.
Therefore this high HDB resale prices.
However, it will be nice to get a better insight if They are Citizens or PRs.
This Desmond NOT fit to Tell lies.
He knew demand was AI generated. But he can’t mention this bcz SGpns as stake holders in Public Housing will cut off his cock 🐓 and UNVOTE him.
No , No , No
It ever mention majority Shitgaporean support .
It means the 60
This is CLASSIC MASTERCLASS Millionaire Politicians methodology to explain away something which they controlled, they influenced, they dictate, and it become responsibility and properties of market dynamics.
Housing is a National Reaource. A citizens stake.
And yet the PAP Administration has made massive mistakes, NOW they TWIST and TURN, do the 50s ROCK and Roll, next up is the ChaCha.
But also from another angle it’s NOT mistake per se. IT’S WEAPONISATION.
Drum Roll, ready…….. Lights off.