The Comparison Is Not Fair

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A canadian has written a letter to our local press commending the efforts put in by Singapore govt to make sure our rubbish are cleared everyday at $40 per household per month and upgrading our lifts so that they stop at every level in our HDB flats.

However, does the writer know that our government is not the one clearing our rubbish and upgrading the lifts? These jobs are outsourced to third party contractors at a fee. Lift upgrading is NOT free and each household has to pay $2k-$2.5k to have the lift stop at every level.

It is not fair to compare Singapore with US or Canada because we are staying in HDB flats whereas most US and Canadian citizens are staying in landed properties. Assuming there are 150 households in a HDB flat, this means a monthly rubbish collecting fee of $6k per block and if there are 10 blocks in the same vicinity, this works out to a revenue of $60k per month! And the lift upgrading revenue works out to be $300k-$375k per block! If there is money to be made, definitely there will be companies wanting to clear our rubbish and upgrade our lifts? Those flats that require lift upgrading are generally the older flats built more than 20-30 years ago and the new flats built nowadays all come with lifts stopping at every level. Of course, the lift costs have already been incorporated in the selling price of the new flats and the price that we pay for a HDB flat in Singapore can actually pay for a landed property in the US or Canada. This is how expensive Singapore HDB flats are (if the writer does not know that)!

The rubbish collecting fees in US and Canada are higher per household simply because there’s no economies of scale if rubbish trucks have to travel a distance to collect rubbish from each household. In a HDB flat, rubbish of 150 households are collected at the same place. Furthermore, rubbish is not collected on a daily basis, contrary to what the writer believes.

The writer also claims that if Singapore citizens are unable to pay their HDB home mortgage, they will not be turfed out and left homeless. Well, this depends on whether the home mortgage is from HDB or banks. If it is from the banks, the banks can still re-possess the house and have it auction off to pay off the mortgage. In fact HDB has been reducing it’s home mortgage loan over the years by letting home owners decide who they want to get the mortgage from. It is known that HDB mortgage loan rates is higher and not as attractive as the banks, hence more home owners have opted to finance their home purchase from banks. This means that more home owners now risk having their homes re-possessed if they cannot meet the loan obligations. And note that only a HDB flat (which is in fact public housing) purchase financed by a HDB mortgage loan has a lower risk of re-possession in times when loan obligations are not met. Other non HDB home purchases are 100% financed by banks and hence can be re-possessed by banks if loan obligations are not met, just like anywhere else in the world.

Overall, I don’t think the comparison is fair or valid (the writer is not comparing apple to apple) or the Singapore govt has done a really good job in these areas since we paid for the rubbish collection, lift upgrading/new lifts and higher interest rates on HDB mortgage loan.

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