Vers will only continue to raise property prices in S'pore

The recent policy announcements by the Government on increasing the value of old Housing Board flats, while calming the anxieties of some, unfortunately continue to propagate the story of ever-rising home prices in already expensive Singapore (Vers allows for more orderly redevelopment; Aug 20).

Housing is for living and should not be thought of as a long-term investment.

Singapore's unusual real estate price gains of yesteryear were driven by double-digit growth in gross domestic product and relatively low property prices.

This obviously cannot be repeated as Singapore already has some of the world's most highly priced real estate.

If the Government compensates 70-year-old public housing flats at a high price, one can only imagine what the impact will be on the resale market and new Built-to-Order (BTO) flats, and consequently on the cost of living here.

As is already happening, sky-high real estate costs inhibit other forms of productive and innovative economic activity, something Singapore desperately needs to move away from.

Rather than artificially increasing public housing prices at taxpayers' cost, a better long-term strategy might be to focus on making BTO flats more affordable and implementing policies that remove all speculative activity from public housing.

Bobby Jayaraman

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A version of this article appeared in the print edition of The Straits Times on August 25, 2018, with the headline Vers will only continue to raise property prices in S'pore. Subscribe