Mah Bow Tan on housing

he highest price for a five-room flat in April’s BTO launches was S$484,000. Will the price of BTO flats reach half a million dollars and more in future?

Mah Bow Tan: Depends on the location. If you’re building one in Queenstown and in the central area, where land is more expensive, because HDB has to buy the land, it’s possible. I think Singaporeans would appreciate that it’s not just absolute cost alone but value for money … If the value of a comparable private flat is higher, then it may happen. But that’s not cause for concern unless it isn’t affordable … If you look at the sums … somebody earning S$8,000 to S$9,000 will be able to afford that.

You had said a couple can use little cash for their home. Some people said their CPF savings would be wiped out to pay the mortgage.

Mah Bow Tan: So you convert the money in the Central Provident Fund to equity in the house, which is going to be higher than the equity in the CPF … if the economy continues to do well, which is the basic underlying assumption. If it doesn’t happen, all bets are off, even your CPF money. So we must assume there must always continue to be good governance … So the answer to the question (that) I pay for my house for 30 years, I get nothing, is wrong, right? I have a house which has a value. I can unlock that value in so many ways.

Source : Today – 5 May 2011