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Comment by everforward | Hacker News Reader

Sort of. So far as I can tell, you can withdraw to buy housing but I don’t think you can pay rent out of it.

The loans are also 75% max loan-to-value so I think until you can get 25% of the purchase price in your account you have to pay CPF and rent (or live with family).

Also, not an economist, but I suspect the forced savings has a wildly inflationary effect on housing prices. You can’t do much else with the money until you retire, so I would guess the price of housing rises up to match the forced savings rate.

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> the forced savings has a wildly inflationary effect on housing prices

Housing prices are inflationary independent of CPF, because flats in Singapore are powerful investment vehicles. For HDB flats, however, there is means-testing and rebates to the amount of ~50%, sufficient for anyone on the 30th percentile and above to afford.

Since the government controls the supplies of HDBs, it controls the price inflation.

So it would be more accurate to say “housing prices are inflationary because the government wants them to be”.

Yet this introduces a ton of new problems as well. In order to keep them “good investments” it becomes ever increasing prices with ever increasing rebates to help lower income afford them.

But eventually prices will stop going up.

All housing stock is controlled by governments everywhere through zoning.

American cities could solve their housing shortages in short order but it'd piss off too many people who are "invested' in housing so we accept dead bodies in our streets and social instability instead.

> American cities could solve their housing shortages in short order but it'd piss off too many people who are "invested' in housing so we accept dead bodies in our streets and social instability instead.

I agree with you about fixing the housing market, but I think you underestimate the instability caused by changing housing prices rapidly.

If housing prices drop by something like 25%, a lot of people are going to be upside down on their loans (outstanding principal exceeds the value of the asset). The banks now have mortgages that aren’t fully secured anymore, and borrowers are heavily incentivized to allow a foreclosure unless they’ve paid down the principal by a lot.

We’re talking the 08 recession all over again.

Very few locals pay rent here. Most people buy houses. Its kindof forced thanks to the system, but its designed in a way that unless you are a decimillionaire housing is expensive, but attainable. This is done by splitting the housing market into private and public housing. Is this perfect? No.

And yes it does drive inflation of house prices.

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