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Desmond Lee rebuts Leong Mun Wai's claim that graduates are 'worse off' today in housing affordability

 https://www.channelnewsasia.com/singapor...032025_cna

[Bigiron]

Desmond Lee Rebuts Leong Mun Wai's Claim on Housing Affordability for Graduates
 
Title: Desmond Lee rebuts Leong Mun Wai's claim that graduates are 'worse off' today in housing affordability
 
Source: Channel News Asia, https://www.channelnewsasia.com/singapor...032025_cna, Published March 7, 2025
 
Author Information: Not specified
 
Article Summary:
 
Theme: This article focuses on a debate in Singapore's Parliament regarding housing affordability for graduates. Non-Constituency Member of Parliament (NCMP) Leong Mun Wai argues that today's graduates are financially worse off compared to previous generations, while Minister for National Development Desmond Lee refutes this claim.
 
Core Points:
 
- Leong Mun Wai's argument: He claims graduates today face greater housing affordability challenges due to rising housing prices and stagnant starting salaries compared to 1979.
 
- Desmond Lee's counter-argument: He argues that Leong's comparison is flawed because it ignores changes in educational levels, resale market dynamics, and housing quality improvements.
 
- Key points in Lee's rebuttal:
 
- Higher education participation: The percentage of Singaporeans attending universities and polytechnics has significantly increased since 1979, making the comparison with a smaller group of graduates then unfair.
 
- Housing quality and amenities: Flats today offer modern amenities and better transport connectivity, improving residents' standard of living compared to those built in 1979.
 
- Resale market evolution: The mature resale market and improved mortgage financing policies offer homeowners more options and appreciation potential today.
 
- Selective data use: Leong's comparison only considers 1979 data without acknowledging subsequent years and construction cost fluctuations.
 
- HDB pricing strategy: HDB pricing is based on market value, not just construction cost recovery, with discounts and grants for affordability.
 
Phenomenon: The debate highlights the complexities of housing affordability in Singapore and the importance of considering various factors, including socioeconomic changes, housing quality, and market dynamics, when assessing housing affordability.
 
Additional Information:
 
- Leong Mun Wai is an NCMP from the Progress Singapore Party (PSP).
 
- The PSP has proposed an Affordable Housing Scheme (AHS) that defers land costs for BTO purchases.
 
- Desmond Lee mentioned that HDB flats in the '60s and '70s were priced based on construction costs, but this practice changed due to rising costs and a construction boom.

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While Desmond Lee effectively counters Leong Mun Wai's claims, his argument also has some weaknesses:
 
Focus on the "Majority": He emphasizes the increased education participation and argues that Leong's comparison is unfair because it only considers a smaller group of graduates in 1979. While this is true, it might overlook the experiences of those who are still struggling with housing affordability, even with higher education levels.
 
Overlooking "Smaller and More Expensive": He mentions the improved housing quality but doesn't directly address Leong's point about today's graduates needing to purchase smaller flats with higher prices. He could have acknowledged this challenge and provided solutions or mitigating factors.
 
Limited Discussion on Income Inequality: He doesn't explicitly discuss income inequality, which could be a significant factor influencing housing affordability. While he mentions grants and discounts, he could have addressed how these schemes address income disparities and the potential impact on housing affordability for different income groups.
 
Ignoring Housing Supply Issues: He focuses on the improvements in housing quality and the mature resale market but doesn't delve into potential constraints on housing supply, which could drive up prices and make it difficult for graduates to find affordable housing.
 
Oversimplification of HDB Pricing: He states that HDB prices aren't based on cost recovery but market value, implying fairness. However, market value can still be influenced by factors beyond individual housing costs, such as land scarcity and government policies, potentially leading to higher prices.
 
While Desmond Lee's counter-argument is strong, acknowledging these weaknesses and addressing them further would strengthen his position and offer a more balanced and comprehensive analysis of housing affordability in Singapore.

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1. Acknowledge Education Participation but Highlight the Challenge:
 
- "While it's true that more Singaporeans now attend universities and polytechnics, this doesn't mean the affordability issue is resolved. The rising cost of living, including housing, puts pressure on graduates, regardless of their qualifications. The affordability gap has simply shifted to a larger group of graduates."
 
2. Address Housing Quality, but Emphasize the Price Difference:
 
- "While today's flats offer modern amenities, they are also significantly more expensive than the simple flats in 1979. This price increase is substantial, even when accounting for the improved features. The affordability challenge remains, even with improved housing."
 
3. Focus on the "Monetization" Advantage but Highlight the Difficulty in Accessing It:
 
- "The mature resale market is a benefit, but accessing it requires significant upfront capital. Graduates struggling to afford their first home might not have the financial resources to leverage this advantage. The resale market doesn't alleviate the initial affordability hurdle."
 
4. Acknowledge HDB Pricing but Emphasize the Market Value Influence:
 
- "While HDB pricing isn't solely based on cost recovery, market value plays a significant role. This market value is influenced by land prices, government policies, and other factors. The affordability challenges arise from the market forces driving up prices, not just construction costs."
 
5. Address Grants and Discounts but Emphasize the Growing Need for Them:
 
- "The government's grants and discounts are helpful, but they are becoming increasingly necessary to address affordability challenges. This indicates a growing need for government support and reinforces the reality of housing becoming less affordable."

[Alice Alicia]

No.
Desmond didn't address the issue of affordability at all for graduates.